UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q




[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES


EXCHANGE
ACT OF 1934





For the
quarterly period ended June 30,
2008





or





[  ]
TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES


EXCHANGE
ACT OF 1934





For the
transition period from _______ to _______





Exact
      name of registrant as specified in its charter,Commission
            
            state
      of incorporation, address of principal
            
            I.R.S.
      EmployerFile
      Number
            
            executive
      offices and telephone number
            
            Identification
      Number001-32206
            
            GREAT
      PLAINS ENERGY INCORPORATED
            
            43-1916803(A
      Missouri Corporation)1201
      Walnut StreetKansas
      City, Missouri 64106(816)
      556-2200www.greatplainsenergy.com000-51873
            
            KANSAS
      CITY POWER & LIGHT COMPANY
            
            44-0308720(A
      Missouri Corporation)1201
      Walnut StreetKansas
      City, Missouri 64106(816)
      556-2200www.kcpl.com








Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be filed by Section 13 or 15(d) of the Securities
  ExchangeAct
      of 1934 during the preceding 12 months (or for such shorter period that
      the registrant was required to file such reports), and (2) has
      beensubject
      to such filing requirements for the past 90 days.Great
      Plains Energy Incorporated
            Yes
            X
            No
            _
            
            Kansas
      City Power & Light Company
            Yes
            X
            No
            _Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, a non-accelerated filer, or a smaller
      reportingcompany.  See
      definitions of “large accelerated filer,” “accelerated filer” and “smaller
      reporting company” in Rule 12b-2 of the ExchangeAct.Great
      Plains Energy Incorporated
            Large
      accelerated filer
            X
            Accelerated
      filer
            _Non-accelerated
      filer
            _
            Smaller
      reporting company
            _Kansas
      City Power & Light Company
            Large
      accelerated filer
            _
            Accelerated
      filer
            _Non-accelerated
      filer
            X
            Smaller
      reporting company
            _Indicate
      by check mark whether the registrant is a shell company (as defined in
      Rule 12b-2 of the Exchange Act).Great
      Plains Energy Incorporated
            Yes
            _
            No
            X
            
            Kansas
      City Power & Light Company
            Yes
            _
            No
            XOn
      August 4, 2008, Great Plains Energy Incorporated had 118,763,133 shares of
      common stock outstanding.  On August 4, 2008,Kansas
      City Power & Light Company had one share of common stock outstanding,
      which was held by Great Plains Energy
  Incorporated.







This
combined Quarterly Report on Form 10-Q is being filed by Great Plains Energy
Incorporated (Great Plains Energy) and Kansas City Power & Light Company
(KCP&L).  KCP&L is a wholly owned subsidiary of Great Plains
Energy and represents a significant portion of its assets, liabilities,
revenues, expenses and operations.  Thus, all information contained in
this report relates to, and is filed by, Great Plains
Energy.  Information that is specifically identified in this report as
relating solely to Great Plains Energy, such as its financial statements and all
information relating to Great Plains Energy’s other operations, businesses and
subsidiaries, including Aquila, Inc. (Aquila), which is doing business as
KCP&L Great Missouri Operations Company (KCP&L GMO), does not relate to,
and is not filed by, KCP&L.  KCP&L makes no representation as
to that information.  Neither Great Plains Energy nor KCP&L GMO
have any obligation in respect of KCP&L’s debt securities and holders of
such securities should not consider Great Plains Energy’s or KCP&L GMO’s
financial resources or results of operations in making a decision with respect
to KCP&L’s debt securities.  Similarly, KCP&L has no
obligation in respect of securities of Great Plains Energy or KCP&L
GMO.




This
report should be read in its entirety.  No one section of the report
deals with all aspects of the subject matter.  It should be read in
conjunction with the consolidated financial statements and related notes and
with the management’s discussion and analysis included in the 2007 Form 10-K for
each of Great Plains Energy and KCP&L.




CAUTIONARY
STATEMENTS REGARDING CERTAIN FORWARD-LOOKING INFORMATION


Statements
made in this report that are not based on historical facts are forward-looking,
may involve risks and uncertainties, and are intended to be as of the date when
made.  Forward-looking statements include, but are not limited to, the
outcome of regulatory proceedings, cost estimates of the Comprehensive Energy
Plan and other matters affecting future operations.  In connection
with the safe harbor provisions of the Private Securities Litigation Reform Act
of 1995, the registrants are providing a number of important factors that could
cause actual results to differ materially from the provided forward-looking
information.  These important factors include: future economic
conditions in the regional, national and international markets, including but
not limited to regional and national wholesale electricity markets; market
perception of the energy industry, Great Plains Energy, KCP&L and Aquila,
which is doing business as KCP&L Greater Missouri Operations Company
(KCP&L GMO); changes in business strategy, operations or development plans;
effects of current or proposed state and federal legislative and regulatory
actions or developments, including, but not limited to, deregulation,
re-regulation and restructuring of the electric utility industry; decisions of
regulators regarding rates KCP&L and KCP&L GMO can charge for
electricity; adverse changes in applicable laws, regulations, rules, principles
or practices governing tax, accounting and environmental matters including, but
not limited to, air and water quality; financial market conditions and
performance including, but not limited to, changes in interest rates and credit
spreads and in availability and cost of capital and the effects on pension plan
assets and costs; credit ratings; inflation rates; effectiveness of risk
management policies and procedures and the ability of counterparties to satisfy
their contractual commitments; impact of terrorist acts; increased competition
including, but not limited to, retail choice in the electric utility industry
and the entry of new competitors; ability to carry out marketing and sales
plans; weather conditions including weather-related damage; cost, availability,
quality and deliverability of fuel; ability to achieve generation planning goals
and the occurrence and duration of planned and unplanned generation outages;
delays in the anticipated in-service dates and cost increases of additional
generating capacity and environmental projects; nuclear operations; workforce
risks, including retirement compensation and benefits costs; the ability to
successfully integrate KCP&L and KCP&L GMO operations and the timing and
amount of resulting synergy savings; and other risks and
uncertainties.




This list
of factors is not all-inclusive because it is not possible to predict all
factors.  Part II Item 1A Risk Factors included in this report, which
updates and restates the risk factors included in the 2007 Form 10-K for each of
Great Plains Energy and KCP&L under Part I Item 1A, should be carefully read
for further understanding of potential risks for each of Great Plains Energy and
KCP&L.  Other sections of this report and other periodic reports
filed by each of Great Plains Energy and KCP&L with the Securities and
Exchange Commission (SEC) should also be read for more information regarding
risk factors.  Great Plains Energy and KCP&L undertake no
obligation to publicly update or revise any forward-looking statement, whether
as a result of new information, future events or otherwise.


2


GLOSSARY
OF TERMS




The
following is a glossary of frequently used abbreviations or acronyms that are
found throughout this report.




Abbreviation or Acronym
            
            DefinitionAquila
      or KCP&L GMO
            
            Aquila,
      Inc., a wholly owned subsidiary of Great Plains Energy as of July
      14,
              2008,
      which is doing business as KCP&L Greater Missouri
      Operations
              Company (KCP&L GMO)ARO
            
            Asset
      Retirement ObligationBART
            
            Best
      available retrofit technologyBlack
      Hills
            
            Black
      Hills CorporationCAIR
            
            Clean
      Air Interstate RuleCAMR
            
            Clean
      Air Mercury RuleClean
      Air Act
            
            Clean
      Air Act Amendments of 1990CO2
            
            Carbon
      DioxideCollaboration
      Agreement
            
            Agreement
      among KCP&L, the Sierra Club and the Concerned
              Citizens
      of Platte CountyCompany
            
            Great
      Plains Energy Incorporated and its subsidiariesEBITDA
            
            Earnings
      before interest, income taxes, depreciation and
    amortizationECA
            
            Energy
      Cost AdjustmentEIRR
            
            Environmental
      Improvement Revenue RefundingEPA
            
            Environmental
      Protection AgencyEPS
            
            Earnings
      per common shareERISA
            
            Employee
      Retirement Income Security Act of 1974FASB
            
            Financial
      Accounting Standards BoardFELINE
      PRIDESSM
            
            Flexible
      Equity Linked Preferred Increased Dividend Equity
    Securities,a
      service mark of Merrill Lynch & Co., Inc.FERC
            
            The
      Federal Energy Regulatory CommissionFIN
            
            Financial
      Accounting Standards Board InterpretationFSP
            
            Financial
      Accounting Standards Board Staff PositionFSS
            
            Forward
      Starting SwapsGAAP
            
            Generally
      Accepted Accounting PrinciplesGreat
      Plains Energy
            
            Great
      Plains Energy Incorporated and its subsidiariesHoldings
            
            DTI
      Holdings, Inc.HSS
            
            Home
      Service Solutions Inc., a wholly owned subsidiary of KLT
    Inc.IEC
            
            Innovative
      Energy Consultants Inc., a wholly owned subsidiary
              of
      Great Plains EnergyISO
            
            Independent
      System OperatorKCC
            
            The
      State Corporation Commission of the State of KansasKCP&L
            
            Kansas
      City Power & Light Company, a wholly owned subsidiary
              of
      Great Plains EnergyKDHE
            
            Kansas
      Department of Health and EnvironmentKLT
      Inc.
            
            KLT
      Inc., a wholly owned subsidiary of Great Plains EnergyKLT
      Investments
            
            KLT
      Investments Inc., a wholly owned subsidiary of KLT Inc.KLT
      Telecom
            
            KLT
      Telecom Inc., a wholly owned subsidiary of KLT Inc.KW
            
            KilowattkWh
            
            Kilowatt
      hourMAC
            
            Material
      Adverse ChangeMD&A
            
            Management’s
      Discussion and Analysis of Financial Condition andResults
      of OperationsMDNR
            
            Missouri
      Department of Natural ResourcesMPSC
            
            Public
      Service Commission of the State of
Missouri


3


Abbreviation or
      Acronym
            
            DefinitionMW
            
            MegawattMWh
            
            Megawatt
      hourNOx
            
            Nitrogen
      OxideNPNS
            
            Normal
      Purchases and Normal SalesOCI
            
            Other
      Comprehensive IncomePRB
            
            Powder
      River BasinReceivables
      Company
            
            Kansas
      City Power & Light Receivables Company, a wholly owned
              subsidiary
      of KCP&LRTO
            
            Regional
      Transmission OrganizationSEC
            
            Securities
      and Exchange CommissionServices
            
            Great
      Plains Energy Services IncorporatedSFAS
            
            Statement
      of Financial Accounting StandardsSIP
            
            State
      Implementation PlanSO2
            
            Sulfur
      DioxideSTB
            
            Surface
      Transportation BoardStrategic
      Energy
            
            Strategic
      Energy, L.L.C., which, until its sale on June 2, 2008, was a
              subsidiary
      of KLT Energy ServicesT
      - Lock
            
            Treasury
      LockUnion
      Pacific
            
            Union
      Pacific Railroad CompanyWCNOC
            
            Wolf
      Creek Nuclear Operating CorporationWolf
      Creek
            
            Wolf
      Creek Generating Station


4


PART I - FINANCIAL
INFORMATION


ITEM 1. CONSOLIDATED FINANCIAL
STATEMENTS




GREAT
      PLAINS ENERGYConsolidated
      Balance Sheets(Unaudited)June
      30
            
            December
      312008
            
            2007ASSETS
            (millions,
      except share amounts)Current
      AssetsCash
      and cash equivalents
            $
            33.7
            
            
            $
            24.0Receivables,
      net
            
            186.4
            
            
            
            166.0Fuel
      inventories, at average cost
            
            47.8
            
            
            
            35.9Materials
      and supplies, at average cost
            
            67.6
            
            
            
            64.0Deferred
      refueling outage costs
            
            18.2
            
            
            
            6.5Refundable
      income taxes
            
            45.1
            
            
            
            16.0Deferred
      income taxes
            
            15.5
            
            
            
            3.6Assets
      of discontinued operations
            
            -
            
            
            
            487.1Derivative
      instruments
            
            4.4
            
            
            
            0.7Prepaid
      expenses
            
            13.7
            
            
            
            11.0Total
            
            432.4
            
            
            
            814.8Nonutility
      Property and InvestmentsAffordable
      housing limited partnerships
            
            15.9
            
            
            
            17.3Nuclear
      decommissioning trust fund
            
            104.7
            
            
            
            110.5Other
            
            7.2
            
            
            
            7.5Total
            
            127.8
            
            
            
            135.3Utility
      Plant, at Original CostElectric
            
            5,567.1
            
            
            
            5,450.6Less-accumulated
      depreciation
            
            2,643.7
            
            
            
            2,596.9Net
      utility plant in service
            
            2,923.4
            
            
            
            2,853.7Construction
      work in progress
            
            800.5
            
            
            
            530.2Nuclear
      fuel, net of amortization of $101.8 and $120.2
            
            56.0
            
            
            
            60.6Total
            
            3,779.9
            
            
            
            3,444.5Deferred
      Charges and Other AssetsRegulatory
      assets
            
            373.6
            
            
            
            400.1Derivative
      instruments
            
            0.4
            
            
            
            -Other
            
            54.3
            
            
            
            37.4Total
            
            428.3
            
            
            
            437.5Total
            $
            4,768.4
            
            
            $
            4,832.1The
      accompanying Notes to Consolidated Financial Statements are an integral
      part of these statements.


5


GREAT
      PLAINS ENERGYConsolidated
      Balance Sheets(Unaudited)June
      30
            
            December
      312008
            
            2007LIABILITIES
      AND CAPITALIZATION
            (millions,
      except share amounts)Current
      LiabilitiesNotes
      payable
            $
            -
            
            
            $
            42.0Commercial
      paper
            
            192.9
            
            
            
            365.8Current
      maturities of long-term debt
            
            0.3
            
            
            
            0.3Accounts
      payable
            
            236.1
            
            
            
            241.4Accrued
      taxes
            
            42.3
            
            
            
            19.5Accrued
      interest
            
            27.1
            
            
            
            16.6Accrued
      compensation and benefits
            
            28.0
            
            
            
            22.1Pension
      and post-retirement liability
            
            1.3
            
            
            
            1.3Liabilities
      of discontinued operations
            
            -
            
            
            
            253.4Derivative
      instruments
            
            28.4
            
            
            
            44.4Other
            
            9.5
            
            
            
            10.2Total
            
            565.9
            
            
            
            1,017.0Deferred
      Credits and Other LiabilitiesDeferred
      income taxes
            
            628.3
            
            
            
            608.0Deferred
      investment tax credits
            
            77.8
            
            
            
            27.0Asset
      retirement obligations
            
            112.4
            
            
            
            94.5Pension
      and post-retirement liability
            
            152.9
            
            
            
            157.2Regulatory
      liabilities
            
            120.3
            
            
            
            144.1Other
            
            63.0
            
            
            
            74.5Total
            
            1,154.7
            
            
            
            1,105.3CapitalizationCommon
      shareholders' equityCommon
      stock-150,000,000 shares authorized without par value86,647,220
      and 86,325,136 shares issued, stated value
            
            1,075.7
            
            
            
            1,065.9Retained
      earnings
            
            476.7
            
            
            
            506.9Treasury
      stock-125,884 and 90,929 shares, at cost
            
            (3.7
            )
            
            
            (2.8
            )Accumulated
      other comprehensive loss
            
            (16.3
            )
            
            
            (2.1
            )Total
            
            1,532.4
            
            
            
            1,567.9Cumulative
      preferred stock $100 par value3.80%
      - 100,000 shares issued
            
            10.0
            
            
            
            10.04.50%
      - 100,000 shares issued
            
            10.0
            
            
            
            10.04.20%
      - 70,000 shares issued
            
            7.0
            
            
            
            7.04.35%
      - 120,000 shares issued
            
            12.0
            
            
            
            12.0Total
            
            39.0
            
            
            
            39.0Long-term
      debt (Note 9)
            
            1,476.4
            
            
            
            1,102.9Total
            
            3,047.8
            
            
            
            2,709.8Commitments
      and Contingencies (Note 13)Total
            $
            4,768.4
            
            
            $
            4,832.1The
      accompanying Notes to Consolidated Financial Statements are an integral
      part of these statements.


6


GREAT
      PLAINS ENERGYConsolidated
      Statements of Income(Unaudited)Three
      Months Ended
            Year
      to DateJune
      30
            June
      302008
            
            2007
            2008
            2007Operating
      Revenues
            (millions,
      except per share amounts)Electric
      revenues
            $
            335.0
            
            
            $
            319.1
            
            $
            632.6
            
            $
            574.8Operating
      ExpensesFuel
            
            58.3
            
            
            
            57.9
            
            
            113.0
            
            
            110.6Purchased
      power
            
            38.2
            
            
            
            22.7
            
            
            69.0
            
            
            39.1Operating
      expenses - KCP&L
            
            78.3
            
            
            
            74.1
            
            
            152.3
            
            
            147.7Selling,
      general and administrative - non-regulated
            
            0.1
            
            
            
            4.7
            
            
            9.0
            
            
            7.8Maintenance
            
            28.4
            
            
            
            23.1
            
            
            58.6
            
            
            53.0Depreciation
      and amortization
            
            50.8
            
            
            
            43.8
            
            
            101.0
            
            
            86.8General
      taxes
            
            29.1
            
            
            
            27.7
            
            
            58.8
            
            
            54.8Loss
      on property
            
            0.2
            
            
            
            -
            
            
            0.2
            
            
            -Other
            
            -
            
            
            
            -
            
            
            -
            
            
            0.2Total
            
            283.4
            
            
            
            254.0
            
            
            561.9
            
            
            500.0Operating
      income
            
            51.6
            
            
            
            65.1
            
            
            70.7
            
            
            74.8Non-operating
      income
            
            5.8
            
            
            
            1.2
            
            
            14.9
            
            
            5.1Non-operating
      expenses
            
            (1.4
            )
            
            
            (0.9
            )
            
            (2.5
            )
            
            (3.6
            )Interest
      charges
            
            (10.4
            )
            
            
            (17.5
            )
            
            (52.0
            )
            
            (38.6
            )Income
      from continuing operations before income taxesand
      loss from equity investments
            
            45.6
            
            
            
            47.9
            
            
            31.1
            
            
            37.7Income
      taxes
            
            (32.0
            )
            
            
            (15.2
            )
            
            (22.5
            )
            
            (8.3
            )Loss
      from equity investments, net of income taxes
            
            (0.4
            )
            
            
            (0.3
            )
            
            (0.8
            )
            
            (0.7
            )Income
      from continuing operations
            
            13.2
            
            
            
            32.4
            
            
            7.8
            
            
            28.7Income
      (loss) from discontinued operations, net of income taxes (Note
      11)
            
            (18.2
            )
            
            
            (6.8
            )
            
            34.7
            
            
            20.3Net
      income (loss)
            
            (5.0
            )
            
            
            25.6
            
            
            42.5
            
            
            49.0Preferred
      stock dividend requirements
            
            0.4
            
            
            
            0.5
            
            
            0.8
            
            
            0.9Earnings
      (loss) available for common shareholders
            $
            (5.4
            )
            
            $
            25.1
            
            $
            41.7
            
            $
            48.1Average
      number of common shares outstanding
            
            86.0
            
            
            
            85.6
            
            
            85.9
            
            
            84.2Basic
      and diluted earnings (loss) per common shareContinuing
      operations
            $
            0.15
            
            
            $
            0.37
            
            $
            0.09
            
            $
            0.33Discontinued
      operations
            
            (0.21
            )
            
            
            (0.08
            )
            
            0.40
            
            
            0.24Basic
      and diluted earnings (loss) per common share
            $
            (0.06
            )
            
            $
            0.29
            
            $
            0.49
            
            $
            0.57Cash
      dividends per common share
            $
            0.415
            
            
            $
            0.415
            
            $
            0.83
            
            $
            0.83The
      accompanying Notes to Consolidated Financial Statements are an integral
      part of these statements.


7


GREAT
      PLAINS ENERGYConsolidated
      Statements of Cash Flows(Unaudited)Year
      to Date June 30
            2008
            2007Cash
      Flows from Operating Activities
            (millions)Net
      income
            $
            42.5
            
            $
            49.0Adjustments
      to reconcile income to net cash from operating activities:Depreciation
      and amortization
            
            104.3
            
            
            90.9Amortization
      of:Nuclear
      fuel
            
            5.5
            
            
            8.3Other
            
            5.0
            
            
            4.4Deferred
      income taxes, net
            
            14.6
            
            
            17.7Investment
      tax credit amortization
            
            (0.7
            )
            
            (0.7
            )Loss
      from equity investments, net of income taxes
            
            0.8
            
            
            0.7Fair
      value impacts from energy contracts - Strategic Energy
            
            (189.1
            )
            
            (39.8
            )Fair
      value impacts from interest rate hedging
            
            9.2
            
            
            -Loss
      on sale of Strategic Energy
            
            116.6
            
            
            -Other
      operating activities (Note 3)
            
            (21.5
            )
            
            (73.2
            )Net
      cash from operating activities
            
            87.2
            
            
            57.3Cash
      Flows from Investing ActivitiesUtility
      capital expenditures
            
            (378.8
            )
            
            (194.7
            )Allowance
      for borrowed funds used during construction
            
            (10.1
            )
            
            (6.4
            )Purchases
      of investments and nonutility property
            
            (0.8
            )
            
            (2.1
            )Proceeds
      from sale of Strategic Energy, net of cash sold
            
            216.4
            
            
            -Purchases
      of nuclear decommissioning trust investments
            
            (23.8
            )
            
            (34.0
            )Proceeds
      from nuclear decommissioning trust investments
            
            22.0
            
            
            32.2Other
      investing activities
            
            (8.3
            )
            
            (8.7
            )Net
      cash from investing activities
            
            (183.4
            )
            
            (213.7
            )Cash
      Flows from Financing ActivitiesIssuance
      of common stock
            
            5.3
            
            
            5.4Issuance
      of long-term debt
            
            350.3
            
            
            248.0Issuance
      fees
            
            (4.3
            )
            
            (0.2
            )Repayment
      of long-term debt
            
            -
            
            
            (225.5
            )Net
      change in short-term borrowings
            
            (214.9
            )
            
            197.2Dividends
      paid
            
            (72.5
            )
            
            (72.2
            )Equity
      forward settlement
            
            -
            
            
            (12.3
            )Other
      financing activities
            
            (1.1
            )
            
            (2.1
            )Net
      cash from financing activities
            
            62.8
            
            
            138.3Net
      Change in Cash and Cash Equivalents
            
            (33.4
            )
            
            (18.1
            )Cash and Cash Equivalents at
      Beginning of Year (includes $43.1million
      and $45.8 million of cash included in assets of
    discontinuedoperations
      in 2008 and 2007, respectively)
            
            67.1
            
            
            61.8Cash and Cash Equivalents at
      End of Period (includes $31.1 millionof
      cash included in assets of discontinued operations in
2007)
            $
            33.7
            
            $
            43.7The
      accompanying Notes to Consolidated Financial Statements are an integral
      part of these statements.


8


GREAT
      PLAINS ENERGYConsolidated
      Statements of Common Shareholders' Equity(Unaudited)Year
      to Date June 30
            2008
            
            2007Shares
            Amount
            Shares
            AmountCommon
      Stock
            (millions,
      except share amounts)Beginning
      balance
            86,325,136
            
            $
            1,065.9
            
            80,405,035
            
            $
            896.8Issuance
      of common stock
            265,575
            
            
            5.6
            
            5,395,529
            
            
            169.0Issuance
      of restricted common stock
            56,509
            
            
            1.5
            
            344,527
            
            
            11.0Equity
      compensation expense
            
            
            
            1.8
            
            
            
            
            0.6Equity
      forward settlement
            
            
            
            -
            
            
            
            
            (12.3
            )Unearned
      CompensationIssuance
      of restricted common stock
            
            
            
            (1.5
            )
            
            
            
            (11.0
            )Forfeiture
      of restricted common stock
            
            
            
            (0.1
            )
            
            
            
            -Compensation
      expense recognized
            
            
            
            2.8
            
            
            
            
            2.0Other
            
            
            
            (0.3
            )
            
            
            
            -Ending
      balance
            86,647,220
            
            
            1,075.7
            
            86,145,091
            
            
            1,056.1Retained
      EarningsBeginning
      balance
            
            
            
            506.9
            
            
            
            
            493.4Cumulative
      effect of a change in accounting principle (Note 10)
            
            
            -
            
            
            
            
            (0.9
            )Net
      income
            
            
            
            42.5
            
            
            
            
            49.0Dividends:Common
      stock
            
            
            
            (71.7
            )
            
            
            
            (71.3
            )Preferred
      stock - at required rates
            
            
            
            (0.8
            )
            
            
            
            (0.9
            )Performance
      shares
            
            
            
            (0.2
            )
            
            
            
            (0.3
            )Ending
      balance
            
            
            
            476.7
            
            
            
            
            469.0Treasury
      StockBeginning
      balance
            (90,929
            )
            
            (2.8
            )
            (53,499
            )
            
            (1.6
            )Treasury
      shares acquired
            (34,955
            )
            
            (0.9
            )
            (19,054
            )
            
            (0.6
            )Ending
      balance
            (125,884
            )
            
            (3.7
            )
            (72,553
            )
            
            (2.2
            )Accumulated
      Other Comprehensive Income (Loss)Beginning
      balance
            
            
            
            (2.1
            )
            
            
            
            (46.7
            )Derivative
      hedging activity, net of tax
            
            
            
            (14.4
            )
            
            
            
            51.1Change
      in unrecognized pension expense, net of tax
            
            
            
            0.2
            
            
            
            
            -Ending
      balance
            
            
            
            (16.3
            )
            
            
            
            4.4Total
      Common Shareholders' Equity
            
            
            $
            1,532.4
            
            
            
            $
            1,527.3The
      accompanying Notes to Consolidated Financial Statements are an integral
      part of these statements.


9


GREAT
      PLAINS ENERGYConsolidated
      Statements of Comprehensive Income(Unaudited)Three
      Months Ended
            Year
      to DateJune
      30
            June
      302008
            2007
            2008
            
            2007(millions)Net
      income (loss)
            $
            (5.0
            )
            $
            25.6
            
            $
            42.5
            
            
            $
            49.0Other
      comprehensive incomeGain
      (loss) on derivative hedging instruments
            
            (1.0
            )
            
            (45.6
            )
            
            80.6
            
            
            
            48.5Income
      taxes
            
            0.6
            
            
            18.6
            
            
            (33.4
            )
            
            
            (20.0
            )Net
      gain (loss) on derivative hedging instruments
            
            (0.4
            )
            
            (27.0
            )
            
            47.2
            
            
            
            28.5Reclassification
      to expenses, net of tax (Note 17)
            
            (64.0
            )
            
            9.7
            
            
            (61.6
            )
            
            
            22.6Derivative
      hedging activity, net of tax
            
            (64.4
            )
            
            (17.3
            )
            
            (14.4
            )
            
            
            51.1Defined
      benefit pension plansAmortization
      of net gains included in net periodicbenefit
      costs
            
            0.1
            
            
            0.1
            
            
            0.2
            
            
            
            0.2Prior
      service costs arising during the period
            
            -
            
            
            (0.4
            )
            
            -
            
            
            
            (0.4
            )Less:
      amortization of prior service costs included innet
      periodic benefit costs
            
            -
            
            
            0.1
            
            
            -
            
            
            
            0.1Income
      taxes
            
            -
            
            
            0.1
            
            
            -
            
            
            
            0.1Net
      change in unrecognized pension expense
            
            0.1
            
            
            (0.1
            )
            
            0.2
            
            
            
            -Comprehensive
      income (loss)
            $
            (69.3
            )
            $
            8.2
            
            $
            28.3
            
            
            $
            100.1The
      accompanying Notes to Consolidated Financial Statements are an integral
      part of these statements.


10


KANSAS
      CITY POWER & LIGHT COMPANYConsolidated
      Balance Sheets(Unaudited)June
      30
            
            December
      312008
            
            2007ASSETS
            (millions,
      except share amounts)Current
      AssetsCash
      and cash equivalents
            $
            6.8
            
            
            $
            3.2Receivables,
      net
            
            185.9
            
            
            
            176.4Fuel
      inventories, at average cost
            
            47.8
            
            
            
            35.9Materials
      and supplies, at average cost
            
            67.6
            
            
            
            64.0Deferred
      refueling outage costs
            
            18.2
            
            
            
            6.5Refundable
      income taxes
            
            55.8
            
            
            
            16.6Deferred
      income taxes
            
            14.9
            
            
            
            3.4Prepaid
      expenses
            
            13.4
            
            
            
            10.4Derivative
      instruments
            
            4.4
            
            
            
            0.7Total
            
            414.8
            
            
            
            317.1Nonutility
      Property and InvestmentsNuclear
      decommissioning trust fund
            
            104.7
            
            
            
            110.5Other
            
            4.8
            
            
            
            6.2Total
            
            109.5
            
            
            
            116.7Utility
      Plant, at Original CostElectric
            
            5,567.1
            
            
            
            5,450.6Less-accumulated
      depreciation
            
            2,643.7
            
            
            
            2,596.9Net
      utility plant in service
            
            2,923.4
            
            
            
            2,853.7Construction
      work in progress
            
            800.5
            
            
            
            530.2Nuclear
      fuel, net of amortization of $101.8 and $120.2
            
            56.0
            
            
            
            60.6Total
            
            3,779.9
            
            
            
            3,444.5Deferred
      Charges and Other AssetsRegulatory
      assets
            
            373.6
            
            
            
            400.1Derivative
      instruments
            
            0.4
            
            
            
            -Other
            
            25.3
            
            
            
            13.6Total
            
            399.3
            
            
            
            413.7Total
            $
            4,703.5
            
            
            $
            4,292.0The
      disclosures regarding KCP&L included in the accompanying Notes to
      Consolidated Financial Statementsare
      an integral part of these
statements.


11


KANSAS
      CITY POWER & LIGHT COMPANYConsolidated
      Balance Sheets(Unaudited)June
      30
            
            December
      312008
            
            2007LIABILITIES
      AND CAPITALIZATION
            (millions,
      except share amounts)Current
      LiabilitiesNotes
      payable to Great Plains Energy
            $
            -
            
            
            $
            0.6Commercial
      paper
            
            192.9
            
            
            
            365.8Accounts
      payable
            
            239.6
            
            
            
            243.4Accrued
      taxes
            
            36.4
            
            
            
            19.0Accrued
      interest
            
            19.2
            
            
            
            9.6Accrued
      compensation and benefits
            
            26.2
            
            
            
            21.6Pension
      and post-retirement liability
            
            1.1
            
            
            
            1.1Derivative
      instruments
            
            -
            
            
            
            28.0Other
            
            8.4
            
            
            
            8.7Total
            
            523.8
            
            
            
            697.8Deferred
      Credits and Other LiabilitiesDeferred
      income taxes
            
            663.4
            
            
            
            642.2Deferred
      investment tax credits
            
            77.8
            
            
            
            27.0Asset
      retirement obligations
            
            112.4
            
            
            
            94.5Pension
      and post-retirement liability
            
            144.7
            
            
            
            149.4Regulatory
      liabilities
            
            120.3
            
            
            
            144.1Other
            
            55.9
            
            
            
            54.2Total
            
            1,174.5
            
            
            
            1,111.4CapitalizationCommon
      shareholder's equityCommon
      stock-1,000 shares authorized without par value1
      share issued, stated value
            
            1,315.6
            
            
            
            1,115.6Retained
      earnings
            
            324.9
            
            
            
            371.3Accumulated
      other comprehensive loss
            
            (12.1
            )
            
            
            (7.5
            )Total
            
            1,628.4
            
            
            
            1,479.4Long-term
      debt (Note 9)
            
            1,376.8
            
            
            
            1,003.4Total
            
            3,005.2
            
            
            
            2,482.8Commitments
      and Contingencies (Note 13)Total
            $
            4,703.5
            
            
            $
            4,292.0The
      disclosures regarding KCP&L included in the accompanying Notes to
      Consolidated Financial Statementsare
      an integral part of these
statements.


12


KANSAS CITY POWER & LIGHT
  COMPANYConsolidated
      Statements of Income(Unaudited)Three
      Months Ended
            Year
      to DateJune
      30
            June
      302008
            2007
            2008
            2007Operating
      Revenues
            (millions)Electric
      revenues
            $
            335.0
            
            $
            319.1
            
            $
            632.6
            
            $
            574.8Operating
      ExpensesFuel
            
            58.3
            
            
            57.9
            
            
            113.0
            
            
            110.6Purchased
      power
            
            38.2
            
            
            22.7
            
            
            69.0
            
            
            39.1Operating
      expenses
            
            78.3
            
            
            74.1
            
            
            152.3
            
            
            147.7Maintenance
            
            27.8
            
            
            23.1
            
            
            56.8
            
            
            52.9Depreciation
      and amortization
            
            50.8
            
            
            43.8
            
            
            101.0
            
            
            86.8General
      taxes
            
            28.9
            
            
            27.4
            
            
            58.4
            
            
            54.3Loss
      on property
            
            0.2
            
            
            -
            
            
            0.2
            
            
            -Other
            
            -
            
            
            -
            
            
            -
            
            
            0.2Total
            
            282.5
            
            
            249.0
            
            
            550.7
            
            
            491.6Operating
      income
            
            52.5
            
            
            70.1
            
            
            81.9
            
            
            83.2Non-operating
      income
            
            5.6
            
            
            1.1
            
            
            9.0
            
            
            4.7Non-operating
      expenses
            
            (1.3
            )
            
            (0.9
            )
            
            (2.5
            )
            
            (2.3
            )Interest
      charges
            
            (19.9
            )
            
            (16.7
            )
            
            (36.7
            )
            
            (34.9
            )Income
      before income taxes
            
            36.9
            
            
            53.6
            
            
            51.7
            
            
            50.7Income
      taxes
            
            (29.0
            )
            
            (17.1
            )
            
            (26.8
            )
            
            (12.2
            )Net
      income
            $
            7.9
            
            $
            36.5
            
            $
            24.9
            
            $
            38.5The
      disclosures regarding KCP&L included in the accompanying Notes to
      Consolidated Financial Statements are an integralpart
      of these statements.


13


KANSAS
      CITY POWER & LIGHT COMPANYConsolidated
      Statements of Cash Flows(Unaudited)Year
      to Date June 30
            2008
            
            2007Cash
      Flows from Operating Activities
            (millions)Net
      income
            $
            24.9
            
            $
            38.5Adjustments
      to reconcile income to net cash from operating activities:Depreciation
      and amortization
            
            101.0
            
            
            86.8Amortization
      of:Nuclear
      fuel
            
            5.5
            
            
            8.3Other
            
            4.0
            
            
            2.8Deferred
      income taxes, net
            
            9.6
            
            
            (0.8
            )Investment
      tax credit amortization
            
            (0.7
            )
            
            (0.7
            )Other
      operating activities (Note 3)
            
            (42.7
            )
            
            (40.7
            )Net
      cash from operating activities
            
            101.6
            
            
            94.2Cash
      Flows from Investing ActivitiesUtility
      capital expenditures
            
            (378.8
            )
            
            (194.7
            )Allowance
      for borrowed funds used during construction
            
            (10.1
            )
            
            (6.4
            )Purchases
      of nuclear decommissioning trust investments
            
            (23.8
            )
            
            (34.0
            )Proceeds
      from nuclear decommissioning trust investments
            
            22.0
            
            
            32.2Other
      investing activities
            
            (8.6
            )
            
            (3.9
            )Net
      cash from investing activities
            
            (399.3
            )
            
            (206.8
            )Cash
      Flows from Financing ActivitiesIssuance
      of long-term debt
            
            350.3
            
            
            248.0Repayment
      of long-term debt
            
            -
            
            
            (225.5
            )Net
      change in short-term borrowings
            
            (172.9
            )
            
            161.2Dividends
      paid to Great Plains Energy
            
            (72.0
            )
            
            (69.0
            )Equity
      contribution from Great Plains Energy
            
            200.0
            
            
            -Issuance
      fees
            
            (4.1
            )
            
            (0.1
            )Net
      cash from financing activities
            
            301.3
            
            
            114.6Net
      Change in Cash and Cash Equivalents
            
            3.6
            
            
            2.0Cash
      and Cash Equivalents at Beginning of Year
            
            3.2
            
            
            1.8Cash
      and Cash Equivalents at End of Period
            $
            6.8
            
            $
            3.8The
      disclosures regarding KCP&L included in the accompanying Notes to
      Consolidated FinancialStatements
      are an integral part of these
statements.


14


KANSAS
      CITY POWER & LIGHT COMPANYConsolidated
      Statements of Common Shareholder's Equity(Unaudited)Year
      to Date June 30
            2008
            
            2007Shares
            Amount
            Shares
            AmountCommon
      Stock
            (millions,
      except share amounts)Beginning
      balance
            
            1
            
            $
            1,115.6
            
            
            1
            
            $
            1,021.6Equity
      contribution from Great Plains Energy
            
            
            
            
            200.0
            
            
            
            
            
            -Ending
      balance
            
            1
            
            
            1,315.6
            
            
            1
            
            
            1,021.6Retained
      EarningsBeginning
      balance
            
            
            
            
            371.3
            
            
            
            
            
            354.8Cumulative
      effect of a change in accounting principle (Note 10)
            
            
            -
            
            
            
            
            
            (0.2
            )Net
      income
            
            
            
            
            24.9
            
            
            
            
            
            38.5Transfer
      of HSS to KLT Inc.
            
            
            
            
            0.7
            
            
            
            
            
            -Dividends:Common
      stock held by Great Plains Energy
            
            
            
            
            (72.0
            )
            
            
            
            
            (69.0
            )Ending
      balance
            
            
            
            
            324.9
            
            
            
            
            
            324.1Accumulated
      Other Comprehensive Income (Loss)Beginning
      balance
            
            
            
            
            (7.5
            )
            
            
            
            
            6.7Derivative
      hedging activity, net of tax
            
            
            
            
            (4.6
            )
            
            
            
            
            2.2Ending
      balance
            
            
            
            
            (12.1
            )
            
            
            
            
            8.9Total
      Common Shareholder's Equity
            
            
            
            $
            1,628.4
            
            
            
            
            $
            1,354.6The
      disclosures regarding KCP&L included in the accompanying Notes to
      Consolidated Financial Statements are an integralpart
      of these statements.


15


KANSAS
      CITY POWER & LIGHT COMPANYConsolidated
      Statements of Comprehensive Income(Unaudited)Three
      Months Ended
            Year
      to DateJune
      30
            June
      302008
            2007
            2008
            2007(millions)Net
      income
            $
            7.9
            
            $
            36.5
            
            $
            24.9
            
            $
            38.5Other
      comprehensive income (loss)Gain
      (loss) on derivative hedging instruments
            
            1.7
            
            
            3.2
            
            
            (8.6
            )
            
            3.7Income
      taxes
            
            (0.5
            )
            
            (1.2
            )
            
            3.4
            
            
            (1.4
            )Net
      gain (loss) on derivative hedging instruments
            
            1.2
            
            
            2.0
            
            
            (5.2
            )
            
            2.3Reclassification
      to expenses, net of tax
            
            0.6
            
            
            (0.1
            )
            
            0.6
            
            
            (0.1
            )Derivative
      hedging activity, net of tax
            
            1.8
            
            
            1.9
            
            
            (4.6
            )
            
            2.2Comprehensive
      income
            $
            9.7
            
            $
            38.4
            
            $
            20.3
            
            $
            40.7The
      disclosures regarding KCP&L included in the accompanying Notes to
      Consolidated Financial Statementsare
      an integral part of these
statements.


16


GREAT
PLAINS ENERGY INCORPORATED
 KANSAS
CITY POWER & LIGHT COMPANY
 Notes
to Consolidated Financial Statements
  The notes
to consolidated financial statements that follow are a combined presentation for
Great Plains Energy Incorporated and Kansas City Power & Light Company, both
registrants under this filing.  The terms “Great Plains Energy,”
“Company” and “KCP&L” are used throughout this report.  “Great
Plains Energy” and the “Company” refer to Great Plains Energy Incorporated and
its consolidated subsidiaries, unless otherwise
indicated.  “KCP&L” refers to Kansas City Power & Light
Company and its consolidated subsidiaries.
  1.
              SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES
  Organization
 Great
Plains Energy, a Missouri corporation incorporated in 2001, is a public utility
holding company and does not own or operate any significant assets other than
the stock of its subsidiaries.  Great Plains Energy’s wholly owned
direct subsidiaries with operations or active subsidiaries are:
  ·
              KCP&L
      is an integrated, regulated electric utility that provides electricity to
      customers primarily in the states of Missouri and Kansas.  At
      the end of 2007, KCP&L had two wholly owned subsidiaries, Kansas City
      Power & Light Receivables Company (Receivables Company) and Home
      Service Solutions (HSS).  HSS has no active operations and
      effective January 2, 2008, its ownership was transferred to KLT
      Inc.
  ·
              Great
      Plains Energy Services Incorporated (Services) provides services at cost
      to Great Plains Energy and its subsidiaries, including
      KCP&L.
  ·
              KLT
      Inc. is an intermediate holding company that primarily holds investments
      in affordable housing limited partnerships.  KLT Inc. also
      wholly owns KLT Gas, Inc., KLT Telecom Inc. and effective January 2, 2008,
      HSS, which have no active
operations.
  ·
              On
      June 2, 2008, Great Plains Energy completed the sale of Strategic Energy,
      L.L.C. (Strategic Energy).  See Note 11 for additional
      information.  Great Plains Energy indirectly owned 100% of
      Strategic Energy through its wholly owned subsidiaries KLT Inc. and
      Innovative Energy Consultants Inc. (IEC).  IEC did not own or
      operate any assets other than its indirect interest in Strategic
      Energy.  In July 2008, IEC was merged into KLT
    Inc.
  ·
              On
      July 14, 2008, Great Plains Energy acquired Aquila, Inc.
      (Aquila).  See Note 2 for additional
  information.
  Great
Plains Energy’s and KCP&L’s sole reportable business segment is KCP&L
for the periods presented.  See Note 16 for additional
information.
  Basic
and Diluted Earnings per Common Share Calculation
 There was
no significant dilutive effect on Great Plains Energy’s EPS from other
securities for the three months ended and year to date June 30, 2008 and
2007.  To determine basic EPS, preferred stock dividend requirements
are deducted from income from continuing operations and net income before
dividing by the average number of common shares outstanding.  The
earnings (loss) per share impact of discontinued operations is determined by
dividing income (loss) from discontinued operations, net of income taxes, by the
average number of common shares outstanding.  The effect of dilutive
securities, calculated using the treasury stock method, assumes the issuance of
common shares applicable to stock options, performance shares, restricted stock,
a forward sale agreement and FELINE PRIDESSM.
 17
 The
following table reconciles Great Plains Energy’s basic and diluted EPS from
continuing operations.
 Three
      Months Ended
              Year
      to DateJune
      30
              June
      302008
              2007
              2008
              2007Income
              (millions,
      except per share amounts)Income
      from continuing operations
              $
              13.2
              
              $
              32.4
              
              $
              7.8
              
              $
              28.7Less:
      preferred stock dividend requirements
              
              0.4
              
              
              0.5
              
              
              0.8
              
              
              0.9Income
      available to common shareholders
              $
              12.8
              
              $
              31.9
              
              $
              7.0
              
              $
              27.8Common
      Shares OutstandingAverage
      number of common shares outstanding
              
              86.0
              
              
              85.6
              
              
              85.9
              
              
              84.2Add:
      effect of dilutive securities
              
              -
              
              
              0.2
              
              
              -
              
              
              0.4Diluted
      average number of common shares outstanding
              
              86.0
              
              
              85.8
              
              
              85.9
              
              
              84.6Basic
      and diluted EPS from continuing operations
              $
              0.15
              
              $
              0.37
              
              $
              0.09
              
              $
              0.33
 Great
Plains Energy had a net loss for the three months ended June 30, 2008;
therefore, no potential common shares are included in the diluted EPS
calculation because the effect is always anti-dilutive.  The
computation of diluted EPS for the three months ended June 30, 2008, excludes
339,463 performance shares, 470,795 restricted stock shares and 109,472 stock
options.  The computation of diluted EPS year to date June 30, 2008,
excludes anti-dilutive shares consisting of 234,921 performance shares and
444,584 restricted stock shares.  There were no anti-dilutive shares
applicable to stock options.
  The
computation of diluted EPS for the three months ended and year to date June 30,
2007, excludes anti-dilutive shares consisting of 126,463 performance shares and
364,802 restricted stock shares.  There were no anti-dilutive shares
applicable to FELINE PRIDES, stock options or a forward sale
agreement.  FELINE PRIDES settled in the first quarter of 2007 and the
forward sale agreement settled in the second quarter of 2007.
  Dividends
Declared
 In August
2008, the Board of Directors declared a quarterly dividend of $0.415 per share
on Great Plains Energy’s common stock.  The common dividend is payable
September 19, 2008, to shareholders of record as of August 28,
2008.  The Board of Directors also declared regular quarterly
dividends on Great Plains Energy’s preferred stock, payable December 1, 2008, to
shareholders of record as of November 6, 2008.
 
 2.
              AQUILA  ACQUISITION
  On July
14, 2008, Great Plains Energy closed its acquisition of Aquila and Aquila is now
doing business as KCP&L Great Missouri Operations Company (KCP&L
GMO).  Under the terms of the agreement, prior Aquila shareholders
received $1.80 in cash plus 0.0856 of a share of Great Plains Energy common
stock for each share of Aquila common stock.  The total purchase price
of the acquisition was approximately $1.7 billion.  Based on the
market price of Great Plains Energy common stock during the period including the
two trading days before through the two trading days after February 7, 2007, the
date that Great Plains Energy and Aquila announced the acquisition, the fair
value of the 32.2 million shares of Great Plains Energy common stock issued was
approximately $1.0 billion.  Great Plains Energy paid approximately
$0.7 billion of cash consideration.  The allocation of purchase price
to individual assets and liabilities has not been finalized due to the recent
closing of the acquisition.  Immediately prior to Great Plains
Energy’s acquisition of Aquila, Black Hills Corporation (Black Hills) acquired
Aquila’s electric utility assets in Colorado and its gas utility assets in
Colorado, Kansas, Nebraska and Iowa.  Following the closing of the
acquisition, Great Plains Energy wholly owns Aquila, including its
Missouri-based utility operations consisting of the Missouri Public Service and
St. Joseph Light & Power divisions.
 18
 The
transaction received the final required regulatory order from the Public Service
Commission of the State of Missouri (MPSC) on July 1, 2008.  Certain
parties filed applications for rehearing of the order, which were denied by the
MPSC.  The parties may appeal the order through the Missouri state
courts.  The order remains in effect unless reversed by the
courts.
  The MPSC
order approved the deferral of non-labor transition costs to be amortized over a
five-year period beginning with the first post-transaction rate cases to the
extent that synergy savings exceed amortization.  Cumulative non-labor
transition costs were $17.6 million at June 30, 2008.  In the second
quarter of 2008, KCP&L deferred $10.0 million of non-labor transition costs
as a regulatory asset pursuant to the KCC order approving the Aquila acquisition
to be amortized over a five-year period beginning with rates expected to be
effective in 2010.  Direct transaction costs of the acquisition
incurred by Great Plains Energy of $25.8 million at June 30, 2008, are deferred
and will be included in purchase accounting.
  As the
acquisition occurred after the periods presented in this report, the
consolidated financial statements of Great Plains Energy do not reflect Aquila
as a subsidiary.  Aquila will be included in Great Plains Energy’s
consolidated financial statements beginning as of July 14, 2008.
  3.
              SUPPLEMENTAL
      CASH FLOW INFORMATION
 Great
      Plains Energy Other Operating ActivitiesYear
      to Date June 30
              2008
              2007Cash
      flows affected by changes in:
              (millions)Receivables
              $
              (26.5
              )
              $
              (71.6
              )Fuel
      inventories
              
              (12.1
              )
              
              (14.3
              )Materials
      and supplies
              
              (3.6
              )
              
              (1.7
              )Accounts
      payable
              
              49.8
              
              
              5.2Accrued
      taxes
              
              39.0
              
              
              9.4Accrued
      interest
              
              10.5
              
              
              (0.7
              )Deferred
      refueling outage costs
              
              (11.7
              )
              
              4.1Pension
      and post-retirement benefit obligations
              
              14.8
              
              
              9.9Allowance
      for equity funds used during construction
              
              (7.5
              )
              
              (0.3
              )Deferred
      merger costs
              
              (4.7
              )
              
              (10.4
              )T-Lock
      settlement
              
              (41.2
              )
              
              -Kansas
      Energy Cost Adjustment
              
              (17.3
              )
              
              -Proceeds
      from forward starting swaps
              
              -
              
              
              3.3Other
              
              (11.0
              )
              
              (6.1
              )Total
      other operating activities
              $
              (21.5
              )
              $
              (73.2
              )Cash
      paid during the period:Interest
              $
              26.4
              
              $
              38.7Income
      taxes
              $
              15.9
              
              $
              3.4Non-cash
      investing activities:Liabilities
      assumed for capital expenditures
              $
              71.3
              
              $
              61.5
 19
 KCP&L
      Other Operating ActivitiesYear
      to Date June 30
              2008
              2007Cash
      flows affected by changes in:
              (millions)Receivables
              $
              6.1
              
              $
              (26.6
              )Fuel
      inventories
              
              (12.1
              )
              
              (14.3
              )Materials
      and supplies
              
              (3.6
              )
              
              (1.7
              )Accounts
      payable
              
              1.5
              
              
              (39.2
              )Accrued
      taxes
              
              30.6
              
              
              25.1Accrued
      interest
              
              9.6
              
              
              (0.5
              )Deferred
      refueling outage costs
              
              (11.7
              )
              
              4.1Pension
      and post-retirement benefit obligations
              
              13.7
              
              
              8.6Allowance
      for equity funds used during construction
              
              (7.5
              )
              
              (0.3
              )T-Lock
      settlement
              
              (41.2
              )
              
              -Kansas
      Energy Cost Adjustment
              
              (17.3
              )
              
              -Proceeds
      from forward starting swaps
              
              -
              
              
              3.3Other
              
              (10.8
              )
              
              0.8Total
      other operating activities
              $
              (42.7
              )
              $
              (40.7
              )Cash
      paid during the period:Interest
              $
              25.6
              
              $
              34.6Income
      taxes
              $
              4.0
              
              $
              -Non-cash
      investing activities:Liabilities
      assumed for capital expenditures
              $
              71.3
              
              $
              61.3
 Other
Significant Non-Cash Items
 Year to
date June 30, 2008, KCP&L recorded a $17.2 million increase in Asset
Retirement Obligation (ARO) with a corresponding increase in net utility plant
as a result of changes in cost estimates and timing used to compute the present
value of asbestos AROs for KCP&L’s generating stations.  This
activity had no impact on Great Plains Energy’s or KCP&L’s 2008 cash
flows.  See Note 15 for additional information.
  In
February 2007, Great Plains Energy issued 5.2 million shares of common stock in
satisfaction of the FELINE PRIDES stock purchase contracts and the redemption of
the $163.6 million FELINE PRIDES Senior Notes.
 20
 4.
              RECEIVABLES
  The
Company’s receivables are detailed in the following table.
 June
      30
              December
      312008
              2007KCP&L
              (millions)Customer
      accounts receivable
              $
              61.8
              
              $
              45.3Allowance
      for doubtful accounts
              
              (1.3
              )
              
              (1.2
              )Intercompany
      receivable from Great Plains Energy
              
              -
              
              
              10.5Other
      receivables
              
              125.4
              
              
              121.8KCP&L
      receivables
              
              185.9
              
              
              176.4Other
      Great Plains EnergyOther
      receivables
              
              0.5
              
              
              0.1Elimination
      of intercompany receivable
              
              -
              
              
              (10.5
              )Great
      Plains Energy receivables
              $
              186.4
              
              $
              166.0
 KCP&L’s
customer accounts receivable included unbilled receivables of $56.1 million and
$37.7 million at June 30, 2008, and December 31, 2007,
respectively.  KCP&L’s other receivables at June 30, 2008, and
December 31, 2007, consisted primarily of receivables from partners in jointly
owned electric utility plants and wholesale sales receivables.
 
 Sale
of Accounts Receivable – KCP&L
 KCP&L
sells all of its retail electric accounts receivable to its wholly owned
subsidiary, Receivables Company, which in turn sells an undivided percentage
ownership interest in the accounts receivable to Victory Receivables
Corporation, an independent outside investor.  In accordance with
Statement of Financial Accounting Standards (SFAS) No. 140, “Accounting for
Transfers and Servicing of Financial Assets and Extinguishment of Liabilities,”
the sales under these agreements qualify as a sale under which the creditors of
Receivables Company are entitled to be satisfied out of the assets of
Receivables Company prior to any value being returned to KCP&L or its
creditors.  Accounts receivable sold by Receivables Company to the
outside investor under this revolving agreement totaled $70.0 million at June
30, 2008 and 2007.  KCP&L sells its receivables at a fixed price
based upon the expected cost of funds and charge-offs.  These costs
comprise KCP&L’s loss on the sale of accounts
receivable.  KCP&L services the receivables and receives an annual
servicing fee of 2.5% of the outstanding principal amount of the receivables
sold to Receivables Company.  KCP&L does not recognize a servicing
asset or liability because management determined the collection agent fee earned
by KCP&L approximates market value.  The agreement was extended
for one year in July 2008.
 21
 Information
regarding KCP&L’s sale of accounts receivable to Receivables Company is
reflected in the following tables.
 Receivables
              
              ConsolidatedThree
      Months Ended June 30, 2008
              KCP&L
              Company
              
              KCP&L(millions)Receivables
      (sold) purchased
              $
              (276.6
              )
              $
              276.6
              
              
              $
              -Gain
      (loss) on sale of accounts receivable (a)
              
              (3.5
              )
              
              3.2
              
              
              
              (0.3
              )Servicing
      fees
              
              0.7
              
              
              (0.7
              )
              
              
              -Fees
      to outside investor
              
              -
              
              
              (0.5
              )
              
              
              (0.5
              )Cash
      flows during the periodCash
      from customers transferred to Receivables Company
              
              (252.1
              )
              
              252.1
              
              
              
              -Cash
      paid to KCP&L for receivables purchased
              
              249.0
              
              
              (249.0
              )
              
              
              -Servicing
      fees
              
              0.7
              
              
              (0.7
              )
              
              
              -Interest
      on intercompany note
              
              0.4
              
              
              (0.4
              )
              
              
              -
 Receivables
              
              ConsolidatedYear
      to Date June 30, 2008
              KCP&L
              Company
              
              KCP&L(millions)Receivables
      (sold) purchased
              $
              (523.6
              )
              $
              523.6
              
              
              $
              -Gain
      (loss) on sale of accounts receivable (a)
              
              (6.6
              )
              
              6.4
              
              
              
              (0.2
              )Servicing
      fees
              
              1.4
              
              
              (1.4
              )
              
              
              -Fees
      to outside investor
              
              -
              
              
              (1.3
              )
              
              
              (1.3
              )Cash
      flows during the periodCash
      from customers transferred to Receivables Company
              
              (510.1
              )
              
              510.1
              
              
              
              -Cash
      paid to KCP&L for receivables purchased
              
              503.7
              
              
              (503.7
              )
              
              
              -Servicing
      fees
              
              1.4
              
              
              (1.4
              )
              
              
              -Interest
      on intercompany note
              
              0.8
              
              
              (0.8
              )
              
              
              -
 Receivables
                
                ConsolidatedThree
      Months Ended June 30, 2007
                KCP&L
                Company
                
                KCP&L(millions)Receivables
      (sold) purchased
                $
                (266.4
                )
                $
                266.4
                
                
                $
                -Gain
      (loss) on sale of accounts receivable (a)
                
                (3.3
                )
                
                3.0
                
                
                
                (0.3
                )Servicing
      fees
                
                0.7
                
                
                (0.7
                )
                
                
                -Fees
      to outside investor
                
                -
                
                
                (1.0
                )
                
                
                (1.0
                )Cash
      flows during the periodCash
      from customers transferred to Receivables Company
                
                (240.5
                )
                
                240.5
                
                
                
                -Cash
      paid to KCP&L for receivables purchased
                
                237.4
                
                
                (237.4
                )
                
                
                -Servicing
      fees
                
                0.7
                
                
                (0.7
                )
                
                
                -Interest
      on intercompany note
                
                0.6
                
                
                (0.6
                )
                
                
                -
 22
 Receivables
                
                ConsolidatedYear
      to Date June 30, 2007
                KCP&L
                Company
                
                KCP&L(millions)Receivables
      (sold) purchased
                $
                (492.2
                )
                $
                492.2
                
                
                $
                -Gain
      (loss) on sale of accounts receivable (a)
                
                (5.8
                )
                
                5.3
                
                
                
                (0.5
                )Servicing
      fees
                
                1.4
                
                
                (1.4
                )
                
                
                -Fees
      to outside investor
                
                -
                
                
                (2.0
                )
                
                
                (2.0
                )Cash
      flows during the periodCash
      from customers transferred to Receivables Company
                
                (472.4
                )
                
                472.4
                
                
                
                -Cash
      paid to KCP&L for receivables purchased
                
                467.0
                
                
                (467.0
                )
                
                
                -Servicing
      fees
                
                1.4
                
                
                (1.4
                )
                
                
                -Interest
      on intercompany note
                
                1.2
                
                
                (1.2
                )
                
                
                -(a)
                Any
      net gain (loss) is the result of the timing difference inherent in
      collecting receivables andover
      the life of the agreement will net to zero.
  5.
                REGULATORY
      MATTERS
  KCP&L’s
Comprehensive Energy Plan and Collaboration Agreement
 In the
second quarter of 2008, KCP&L completed a cost and schedule update for the
Iatan No. 1 environmental project and the Iatan No. 2 coal plant construction
project.  This updated assessment was driven by several factors,
including (a) the combined projects reaching a milestone of 70% - 75% of the
engineering work completed; (b) the integration of the Iatan No. 2 balance of
plant schedule and quantity estimates into the master schedule and budget; and
(c) continued challenging construction market trends, including rapidly
escalating costs for construction materials and services, the level of global
investment in power production facilities, the decline in the value of the U.S.
dollar, and constrained labor availability.
  The
results of this update were as follows:
  ·
                Based
      on the top end of the new estimate ranges, the combined increase in
      projected costs of the Iatan No. 1 environmental project and the new Iatan
      No. 2 unit is approximately 19%.
  ·
                Compared
      to the previous estimate of $837 million - $914 million provided in the
      2006 Form 10-K, KCP&L’s approximate 55% share of the total projected
      cost of Iatan No. 2 has increased to a range of $994 million - $1.051
      billion, with the top end of the range representing a 15%
      increase.  KCP&L GMO owns 18% of this
    project.
  ·
                The
      anticipated in-service date for Iatan No. 2 continues to be the summer of
      2010.
  ·
                KCP&L’s
      70% share of the projected cost of the Iatan No. 1 environmental project
      has increased to a range of $330 million - $350 million.  This
      represents an increase of 33% compared to the top end of the previous
      range estimate of $255 million - $264 million for Iatan No. 1 included in
      the total amount for Environmental Retrofit Projects in KCP&L’s
      Comprehensive Energy Plan of $423 million - $443 million provided in the
      2006 Form 10-K.  KCP&L GMO owns 18% of this
      project.
  ·
                The
      in-service date for the Iatan No. 1 environmental project is now expected
      to be February 2009 compared to the previous estimate of year-end
      2008.
  In the
Collaboration Agreement among KCP&L, the Sierra Club and the Concerned
Citizens of Platte County, KCP&L agreed to use its best efforts to install
emission control technologies to reduce emissions from the LaCygne Station prior
to the required compliance date under the Environmental Protection Agency (EPA)
best available retrofit technology rule (BART), but in no event later than June
1, 2015.  KCP&L further agreed to issue
 23
 requests
for proposal for the equipment required to comply with BART by December 31,
2008, requesting that construction commence by December 31,
2010.  KCP&L’s Comprehensive Energy Plan includes a project to
install the required emission control technologies at LaCygne No. 1 for
completion in 2009.  Demand for environmental equipment has increased
substantially leading to extremely long lead times for equipment.  As
a result, the LaCygne No. 1 project will not be completed in
2009.  Since KCP&L must also install such emission control
technologies at LaCygne No. 2, management is evaluating the possibility of
combining the required environmental upgrades for both LaCygne Nos. 1 and 2 into
one project, but that determination has not yet been made.
  KCP&L
agreed in the Collaboration Agreement to pursue increasing its wind generation
capacity by 100MW by the end of 2010.  KCP&L has entered into
agreements to acquire 100MW of wind generation for approximately $215
million.  The agreements are terminable by KCP&L in the event it
does not receive certain regulatory assurances.  Also in the
Collaboration Agreement, KCP&L agreed to pursue an additional 300MW of wind
generation capacity by the end of 2012, all subject to regulatory
approval.
  The asset
management and customer programs included in KCP&L’s Comprehensive Energy
Plan are progressing on target.
  KCP&L
Missouri 2006 Rate Case Appeal
 On
December 21, 2006, the MPSC issued an order approving an approximate $51 million
increase in annual revenues effective January 1, 2007.  Appeals of the
MPSC order were filed in February 2007 with the Circuit Court of Cole County,
Missouri, by the Office of Public Counsel, Praxair, Inc., and Trigen-Kansas City
Energy Corporation, seeking to set aside or remand the order to the
MPSC.  The court affirmed the MPSC’s decision in December 2007 and
that decision was appealed by Trigen-Kansas City Energy
Corporation.  Trigen-Kansas City Energy Corporation withdrew its
appeal on June 3, 2008.
 24
 Regulatory
Assets and Liabilities
 KCP&L’s
regulatory assets and liabilities are detailed in the following
table.  Regulatory assets for which costs have been incurred have been
included (or are expected to be included, for costs incurred subsequent to the
most recently approved rate case) in KCP&L’s rate base, thereby providing a
return on invested costs.  Certain regulatory assets do not result
from cash expenditures and therefore do not represent investments included in
rate base or have offsetting liabilities that reduce rate base.
 June
      30
                
                December
      312008
                
                2007Regulatory
      Assets
                (millions)Taxes
      recoverable through future rates
                $
                69.1
                
                
                $
                66.5Loss
      on reacquired debt
                
                5.9
                (a)
                
                
                5.9Change
      in depreciable life of Wolf Creek
                
                -
                (b)
                
                
                45.4Cost
      of removal
                
                11.5
                
                
                
                8.4Asset
      retirement obligations
                
                19.6
                
                
                
                18.5SFAS
      No. 158 pension and post-retirement costs
                
                126.5
                (c)
                
                
                146.8Other
      pension and post-retirement costs
                
                77.5
                (d)
                
                
                76.1Deferred
      customer programs
                
                17.2
                (e)
                
                
                11.6Rate
      case expenses
                
                2.8
                (f)
                
                
                3.2Skill
      set realignment costs
                
                8.2
                (g)
                
                
                8.9Kansas
      Energy Cost Adjustment
                
                17.3
                (h)
                
                
                -Kansas
      merger transition non-labor costs
                
                10.0
                (i)
                
                
                -Other
                
                8.0
                (j)
                
                
                8.8Total
                $
                373.6
                
                
                $
                400.1Regulatory
      LiabilitiesEmission
      allowances
                $
                86.8
                
                
                $
                87.5Asset
      retirement obligations
                
                31.3
                
                
                
                39.4Additional
      Wolf Creek amortization (Missouri)
                
                -
                (b)
                
                
                14.6Other
                
                2.2
                
                
                
                2.6Total
                $
                120.3
                
                
                $
                144.1
 (a)
                Amortized
      over the life of the related new debt issuances or the remaining lives of
      the old debt issuances if no new debt was
  issued.
 (b)
                Consistent
      with current ratemaking treatment in Missouri and Kansas, KCP&L
      reclassified the regulatory assets for change in depreciable life of Wolf
      Creek of $45.4 million (Missouri and Kansas) and the regulatory liability
      for additional Wolf Creek amortization (Missouri) of $14.6 million to
      accumulated depreciation in the second quarter of
  2008.
 (c)
                The
      regulatory asset for SFAS No. 158, “Employers’ Accounting for Defined
      Benefit Pension and Other Postretirement Plans,” pension and
      post-retirement costs at June 30, 2008, is more than offset by related
      liabilities, not included in rate base, representing the difference
      between funding and expenses recognized for the pension and
      post-retirement plans, which will be amortized in accordance with SFAS No.
      87, “Employers’ Accounting for
Pensions.”
 (d)
                The
      regulatory asset for other pension and post-retirement costs at June 30,
      2008, includes $49.0 million representing pension settlements and
      financial and regulatory accounting method differences not included in
      rate base.  The pension settlements, totaling $11.2 million, are
      being amortized over a five-year period, which began January 1,
      2008.  The accounting method difference will be eliminated over
      the life of the pension plans.
 (e)
                $7.0
      million not included in rate base.
 (f)
                $1.7
      million not included in rate base and amortized over various
      periods.(g)
                $3.8
      million not included in rate base and amortized through
    2017.
  25
 (h)
                Not
      included in rate base.
 (i)
                In
      the second quarter of 2008, KCP&L established a $10.0 million
      regulatory asset for recovery of merger transition non-labor costs
      pursuant to the KCC order approving the Aquila acquisition to be amortized
      over a five-year period beginning with the first rate case to include
      Iatan No. 2 in rate base for rates expected to be effective in
      2010.
 (j)
                Certain
      insignificant items are not included in rate base and amortized over
      various periods.
  6.
                PENSION
      PLANS AND OTHER EMPLOYEE BENEFITS
  Pension
Plans and Other Employee Benefits
 The
Company maintains defined benefit pension plans for substantially all employees,
including officers, of KCP&L, Services and Wolf Creek Nuclear Operating
Corporation (WCNOC) and incurs significant costs in providing the plans, with
the majority incurred by KCP&L.  Pension benefits under these
plans reflect the employees’ compensation, years of service and age at
retirement.
  KCP&L
records pension expense in accordance with rate orders from the MPSC and KCC
that allow the difference between pension costs under SFAS No. 87 and SFAS No.
88, “Employers’ Accounting for Settlements and Curtailments of Defined Benefit
Pension Plans and for Termination Benefits,” and pension costs for ratemaking to
be recognized as a regulatory asset or liability.
  In
addition to providing pension benefits, the Company provides certain
post-retirement health care and life insurance benefits for substantially all
retired employees of KCP&L, Services and WCNOC.  The cost of
post-retirement benefits charged to KCP&L are accrued during an employee's
years of service and recovered through rates.
 26
  The
following tables provide the components of net periodic benefit costs prior to
the effects of capitalization and sharing with joint-owners of power
plants.
 Pension
      Benefits
                Other
      BenefitsThree
      Months Ended June 30
                2008
                2007
                2008
                2007Components
      of net periodic benefit costs
                (millions)Service
      cost
                $
                4.5
                
                $
                4.7
                
                $
                0.4
                
                $
                0.3Interest
      cost
                
                7.9
                
                
                7.5
                
                
                1.1
                
                
                1.0Expected
      return on plan assets
                
                (8.1
                )
                
                (7.5
                )
                
                (0.2
                )
                
                (0.2
                )Prior
      service cost
                
                1.1
                
                
                1.1
                
                
                0.7
                
                
                0.7Recognized
      net actuarial loss
                
                8.0
                
                
                8.9
                
                
                0.2
                
                
                0.1Transition
      obligation
                
                -
                
                
                -
                
                
                0.3
                
                
                0.3Net
      periodic benefit costs beforeregulatory
      adjustment
                
                13.4
                
                
                14.7
                
                
                2.5
                
                
                2.2Regulatory
      adjustment
                
                (1.1
                )
                
                (2.2
                )
                
                -
                
                
                -Net
      periodic benefit costs
                $
                12.3
                
                $
                12.5
                
                $
                2.5
                
                $
                2.2
 Pension
      Benefits
                Other
      BenefitsYear
      to Date June 30
                2008
                2007
                2008
                2007Components
      of net periodic benefit costs
                (millions)Service
      cost
                $
                9.0
                
                $
                9.2
                
                $
                0.8
                
                $
                0.5Interest
      cost
                
                15.9
                
                
                14.9
                
                
                2.2
                
                
                1.8Expected
      return on plan assets
                
                (16.1
                )
                
                (14.8
                )
                
                (0.4
                )
                
                (0.4
                )Prior
      service cost
                
                2.1
                
                
                2.2
                
                
                1.4
                
                
                0.7Recognized
      net actuarial loss
                
                16.1
                
                
                17.7
                
                
                0.3
                
                
                0.3Transition
      obligation
                
                -
                
                
                -
                
                
                0.6
                
                
                0.6Settlement
      charge
                
                -
                
                
                -
                
                
                -
                
                
                0.3Net
      periodic benefit costs beforeregulatory
      adjustment
                
                27.0
                
                
                29.2
                
                
                4.9
                
                
                3.8Regulatory
      adjustment
                
                (2.3
                )
                
                (4.2
                )
                
                -
                
                
                -Net
      periodic benefit costs
                $
                24.7
                
                $
                25.0
                
                $
                4.9
                
                $
                3.8
 7.
                EQUITY
      COMPENSATION
  Great
Plains Energy’s Long-Term Incentive Plan is an equity compensation plan approved
by Great Plains Energy’s shareholders.  The Long-Term Incentive Plan
permits the grant of restricted stock, stock options, limited stock appreciation
rights, director shares, director deferred share units and performance shares to
directors, officers and other employees of Great Plains Energy and
KCP&L.  Forfeiture rates are based on historical forfeitures and
future expectations and are reevaluated annually.
 27
 The
following table summarizes Great Plains Energy’s and KCP&L’s equity
compensation expense and associated income tax benefits.
 Three
      Months Ended
                Year
      to DateJune
      30
                June
      302008
                2007
                2008
                2007Great
      Plains Energy
                (millions)Compensation
      expense
                $
                2.6
                
                $
                1.5
                
                $
                4.9
                
                $
                2.6Income
      tax benefits
                
                0.8
                
                
                0.6
                
                
                1.5
                
                
                1.0KCP&LCompensation
      expense
                
                1.4
                
                
                0.9
                
                
                3.0
                
                
                1.7Income
      tax benefits
                
                0.6
                
                
                0.3
                
                
                1.1
                
                
                0.6
 Performance
Shares
 Performance
share activity year to date June 30, 2008, is summarized in the following
table.  Performance adjustment represents the number of shares of
common stock related to performance shares ultimately issued that can vary from
the number of performance shares initially granted depending on Great Plains
Energy’s performance, based on external measures, over stated performance
periods.
 Performance
                Grant
      DateShares
                Fair
      Value*Beginning
      balance
                
                309,689
                
                $
                30.34Performance
      adjustment
                
                (71,616
                )Granted
                
                129,296
                
                
                26.22Issued
                
                (49,709
                )
                
                31.28Forfeited
                
                (3,149
                )
                
                32.87Ending
      balance
                
                314,511
                
                
                28.47*  weighted-average
  At June
30, 2008, the remaining weighted-average contractual term was 1.6
years.  The weighted-average grant-date fair value of shares granted
for the three months ended and year to date June 30, 2008 was
$26.22.  The weighted-average grant-date fair value of shares granted
for the three months ended and year to date June 30, 2007, was $32.87 and
$32.00, respectively.  At June 30, 2008, there was $4.7 million of
total unrecognized compensation expense, net of forfeiture rates, related to
performance shares granted under the Long-Term Incentive Plan, which will be
recognized over the remaining weighted-average contractual term.  The total
fair value of shares of common stock related to performance shares issued was
$1.6 million year to date June 30, 2008, and $1.3 million for the same period in
2007.
  Restricted
Stock
 Restricted
stock activity year to date June 30, 2008, is summarized in the following
table.
 Nonvested
                
                Grant
      DateRestricted
      stock
                
                Fair
      Value*Beginning
      balance
                
                446,882
                
                
                $
                31.38Granted
      and issued
                
                56,509
                
                
                
                26.30Vested
                
                (71,602
                )
                
                
                30.15Forfeited
                
                (4,548
                )
                
                
                32.87Ending
      balance
                
                427,241
                
                
                
                30.90*  weighted-average
 28
 At June
30, 2008, the remaining weighted-average contractual term was 1.3
years.  The weighted-average grant-date fair value of shares granted
for the three months ended and year to date June 30, 2008, was $26.23 and
$26.30, respectively.  The weighted-average grant-date fair value of
shares granted for the three months ended and year to date June 30, 2007, was
$32.87 and $31.97, respectively.  At June 30, 2008, there was $5.9
million of total unrecognized compensation expense, net of forfeiture rates,
related to nonvested restricted stock granted under the Long-Term Incentive
Plan, which will be recognized over the remaining weighted-average contractual
term.  The total fair value of shares vested for the three months ended and
year to date June 30, 2008, was $1.4 million and $2.2 million, respectively and
$0.3 million year to date June 30, 2007.
  Director
Deferred Share Units
 Non-employee
directors receive shares of Great Plains Energy’s common stock as part of their
annual retainer.  Each director may elect to defer receipt of their
shares until the end of January in the year after they leave Great Plains
Energy’s Board of Directors.  Prior to 2008, there were no shares of
Great Plains Energy common stock issued to non-employee directors under Great
Plains Energy’s Long-Term Incentive Plan.  At June 30, 2008, there
were 7,300 shares of director deferred share units outstanding at a
weighted-average grant date fair value of $28.21.  The total fair
value of shares of director deferred share units issued was insignificant and
$0.2 million for the three months ended and year to date June 30, 2008,
respectively.
 
  8.
                SHORT-TERM
      BORROWINGS AND SHORT-TERM BANK LINES OF
CREDIT
  Great
Plains Energy’s $400 million revolving credit facility with a group of banks
expires in May 2011.  A default by Great Plains Energy or any of its
significant subsidiaries on other indebtedness totaling more than $25.0 million
is a default under the facility.  Under the terms of this agreement,
Great Plains Energy is required to maintain a consolidated indebtedness to
consolidated capitalization ratio, as defined in the agreement, not greater than
0.65 to 1.00 at all times.  At June 30, 2008, Great Plains Energy was
in compliance with this covenant.  At June 30, 2008, Great Plains
Energy had no outstanding cash borrowings or letters of credit under the credit
facility.  At December 31, 2007, Great Plains Energy had $42.0 million
of outstanding cash borrowings with a weighted-average interest rate of 5.44%
and had issued letters of credit totaling $98.6 million under the credit
facility.
  KCP&L’s
$600 million revolving credit facility with a group of banks to provide support
for its issuance of commercial paper and other general corporate purposes
expires in May 2011.  A default by KCP&L on other indebtedness
totaling more than $25.0 million is a default under the
facility.  Under the terms of the agreement, KCP&L is required to
maintain a consolidated indebtedness to consolidated capitalization ratio, as
defined in the agreement, not greater than 0.65 to 1.00 at all
times.  At June 30, 2008, KCP&L was in compliance with this
covenant.  At June 30, 2008, KCP&L had $192.9 million of
commercial paper outstanding, at a weighted-average interest rate of 3.17%,
$11.9 million of letters of credit outstanding and no outstanding cash
borrowings under the facility.  At December 31, 2007, KCP&L had
$365.8 million of commercial paper outstanding, at a weighted-average interest
rate of 5.92%, $11.9 million of letters of credit outstanding and no outstanding
cash borrowing under the facility.
 29
 9.
                LONG-TERM
      DEBT
  Great
Plains Energy’s and KCP&L’s long-term debt is detailed in the following
table.
 June
      30
                December
      31Year
      Due
                
                2008
                2007KCP&L
                
                
                
                (millions)General
      Mortgage Bonds4.90%*
      EIRR bonds
                
                2012-2035
                
                $
                158.8
                
                $
                158.8Senior
      Notes6.50%
                2011
                
                
                150.0
                
                
                150.05.85%
                2017
                
                
                250.0
                
                
                250.06.375%
                2018
                
                
                350.0
                
                
                -6.05%
                2035
                
                
                250.0
                
                
                250.0Unamortized
      discount
                
                
                
                
                (1.9
                )
                
                (1.9
                )EIRR
      bonds4.65%
      Series 2005
                
                2035
                
                
                50.0
                
                
                50.05.125%
      Series 2007A-1
                
                2035
                
                
                63.3
                
                
                -5.00%
      Series 2007A-2
                
                2035
                
                
                10.0
                
                
                -4.75%
      Series 2007A
                
                
                
                
                -
                
                
                73.35.375%
      Series 2007B
                
                2035
                
                
                73.2
                
                
                73.24.90%
      Series 2008
                
                2038
                
                
                23.4
                
                
                -Total
      KCP&L
                
                
                
                
                1,376.8
                
                
                1,003.4Other
      Great Plains Energy6.875%
      Senior Notes
                
                2017
                
                
                100.0
                
                
                100.0Unamortized
      discount
                
                
                
                
                (0.4
                )
                
                (0.5
                )7.74%
      Affordable Housing Notes
                
                2008
                
                
                0.3
                
                
                0.3Current
      maturities
                
                
                
                
                (0.3
                )
                
                (0.3
                )Total
      Great Plains Energy excluding current maturities
                $
                1,476.4
                
                $
                1,102.9* Weighted-average
      interest rates at June 30,
2008.
  In March
and April 2008, KCP&L remarketed several series of EIRR bonds that were
auction rate securities, i.e. the interest rates were periodically reset through
an auction process.
  In March
2008, KCP&L remarketed the following:
  ·
                secured
      Series 1992 EIRR bonds maturing in 2017 totaling $31.0 million at a fixed
      rate of 5.25% through March 31,
2013,
  ·
                secured
      Series 1993A EIRR bonds maturing in 2023 totaling $40.0 million at a fixed
      rate of 5.25% through March 31, 2013,
and
  ·
                unsecured
      Series 2007B EIRR bonds maturing in 2035 totaling $73.2 million at a fixed
      rate of 5.375% through March 31,
2013.
  In April
2008, KCP&L remarketed the following:
  ·
                secured
      Series 1993B EIRR bonds maturing in 2023 totaling $39.5 million at a fixed
      rate of 5.00% through March 31, 2011,
and
  ·
                unsecured
      Series 2007A EIRR bonds maturing in 2035 into two series: Series 2007A-1
      totaling $63.3 million at a fixed rate of 5.125% through March 31, 2011
      and Series 2007A-2 totaling $10.0 million at a fixed rate of 5.00% through
      March 31, 2010.
 30
 After
these remarketing activities, none of KCP&L’s EIRR bonds remain in auction
rate mode.
  In March
2008, KCP&L issued $350.0 million of 6.375% unsecured Senior Notes, maturing
in 2018.  As a result of amortizing the loss recognized in other
comprehensive income (OCI) on KCP&L’s 2007 T-Locks, the effective interest
rate on KCP&L’s $350.0 million of 6.375% Senior Notes is 7.49%.
  In May
2008, KCP&L’s Series 2008 EIRR bonds totaling $23.4 million maturing in 2038
were issued.  Proceeds of the bonds will be used to pay for a portion
of the costs at the Iatan Nos. 1 and 2 projects included in KCP&L’s
Comprehensive Energy Plan.  The proceeds were deposited with a
trustee, and will be used to reimburse KCP&L for qualifying
expenditures.  KCP&L recorded a $15.9 million short-term
receivable and a $7.5 million long-term receivable for the proceeds that were
deposited with the trustee.The bonds
have an initial long-term interest rate of 4.90% until June 30,
2013.  At the end of the initial long-term interest rate period, the
bonds are subject to mandatory tender; however, KCP&L is not obligated to
pay the purchase price of the bonds on the mandatory tender date.  If
the bonds are not successfully remarketed, the bonds will bear interest at a
daily rate equal to 10% per annum until all the bonds are successfully
remarketed.
  Amortization
of Debt Expense
 Great
Plains Energy’s and KCP&L’s amortization of debt expense is detailed in the
following table.
 Three
      Months Ended
                Year
      to DateJune
      30
                June
      302008
                2007
                2008
                2007(millions)KCP&L
                $
                0.4
                
                $
                0.3
                
                $
                0.8
                
                $
                0.8Other
      Great Plains Energy
                
                0.2
                
                
                0.1
                
                
                0.3
                
                
                0.7Total
      Great Plains Energy
                $
                0.6
                
                $
                0.4
                
                $
                1.1
                
                $
                1.5
 31
 10.
                TAXES
  Components
of income tax expense (benefit) are detailed in the following
tables.
 Three
      Months Ended
                Year
      to DateJune
      30
                June
      30Great
      Plains Energy
                2008
                2007
                2008
                2007Current
      income taxes
                (millions)Federal
                $
                (14.3
                )
                $
                16.1
                
                $
                (19.7
                )
                $
                7.1State
                
                7.0
                
                
                2.0
                
                
                6.3
                
                
                (0.4
                )Total
                
                (7.3
                )
                
                18.1
                
                
                (13.4
                )
                
                6.7Deferred
      income taxesFederal
                
                (42.1
                )
                
                (6.0
                )
                
                (16.6
                )
                
                13.3State
                
                23.1
                
                
                (1.2
                )
                
                31.2
                
                
                3.9Total
                
                (19.0
                )
                
                (7.2
                )
                
                14.6
                
                
                17.2Noncurrent
      income taxesFederal
                
                1.0
                
                
                0.5
                
                
                1.3
                
                
                (1.0
                )State
                
                0.3
                
                
                0.5
                
                
                0.3
                
                
                0.4Total
                
                1.3
                
                
                1.0
                
                
                1.6
                
                
                (0.6
                )Investment
      tax creditDeferral
                
                51.5
                
                
                -
                
                
                51.5
                
                
                -Amortization
                
                (0.4
                )
                
                (0.3
                )
                
                (0.7
                )
                
                (0.7
                )Total
                
                51.1
                
                
                (0.3
                )
                
                50.8
                
                
                (0.7
                )Total
      income tax expense
                
                26.1
                
                
                11.6
                
                
                53.6
                
                
                22.6Less: taxes
      on discontinued operationsCurrent
      tax expense
                
                25.4
                
                
                0.8
                
                
                25.7
                
                
                (5.2
                )Deferred
      tax expense (benefit)
                
                (32.2
                )
                
                (4.4
                )
                
                4.5
                
                
                19.5Noncurrent
      income tax expense
                
                0.9
                
                
                -
                
                
                0.9
                
                
                -Income
      taxes on continuing operations
                $
                32.0
                
                $
                15.2
                
                $
                22.5
                
                $
                8.3
 Three
      Months Ended
                Year
      to DateJune
      30
                June
      30KCP&L
                2008
                2007
                2008
                2007Current
      income taxes
                (millions)Federal
                $
                (32.3
                )
                $
                16.4
                
                $
                (34.6
                )
                $
                12.4State
                
                0.3
                
                
                2.0
                
                
                0.3
                
                
                1.8Total
                
                (32.0
                )
                
                18.4
                
                
                (34.3
                )
                
                14.2Deferred
      income taxesFederal
                
                (21.7
                )
                
                (2.0
                )
                
                (21.6
                )
                
                (0.8
                )State
                
                31.2
                
                
                (0.1
                )
                
                31.2
                
                
                -Total
                
                9.5
                
                
                (2.1
                )
                
                9.6
                
                
                (0.8
                )Noncurrent
      income taxesFederal
                
                0.3
                
                
                0.5
                
                
                0.6
                
                
                (1.0
                )State
                
                0.1
                
                
                0.6
                
                
                0.1
                
                
                0.5Total
                
                0.4
                
                
                1.1
                
                
                0.7
                
                
                (0.5
                )Investment
      tax creditDeferral
                
                51.5
                
                
                -
                
                
                51.5
                
                
                -Amortization
                
                (0.4
                )
                
                (0.3
                )
                
                (0.7
                )
                
                (0.7
                )Total
                
                51.1
                
                
                (0.3
                )
                
                50.8
                
                
                (0.7
                )Total
                $
                29.0
                
                $
                17.1
                
                $
                26.8
                
                $
                12.2
 32
 Income
Tax Expense (Benefit) and Effective Income Tax Rates
 Income
tax expense (benefit) and the effective income tax rates reflected in the
financial statements and the reasons for their differences from the statutory
federal rates are detailed in the following tables.
 Great
      Plains Energy
                Income
      Tax Expense
                Income
      Tax RateThree
      Months Ended June 30
                2008
                2007
                2008
                2007(millions)Federal
      statutory income tax
                $
                15.8
                
                $
                16.7
                
                
                35.0
                %
                
                35.0
                %Differences
      between book and taxdepreciation
      not normalized
                
                (1.1
                )
                
                0.8
                
                
                (2.4
                )
                
                1.8Amortization
      of investment tax credits
                
                (0.4
                )
                
                (0.3
                )
                
                (0.8
                )
                
                (0.7
                )Federal
      income tax credits
                
                (2.9
                )
                
                (1.7
                )
                
                (6.4
                )
                
                (3.4
                )State
      income taxes
                
                1.9
                
                
                0.2
                
                
                4.2
                
                
                0.5Rate
      change on deferred taxes
                
                19.3
                
                
                -
                
                
                42.6
                
                
                -Changes
      in uncertain tax positions, net
                
                (0.6
                )
                
                0.4
                
                
                (1.4
                )
                
                0.8Aquila
      transaction costs
                
                (0.1
                )
                
                -
                
                
                (0.3
                )
                
                -Other
                
                0.1
                
                
                (0.9
                )
                
                0.4
                
                
                (2.1
                )Total
                $
                32.0
                
                $
                15.2
                
                
                70.9
                %
                
                31.9
                %Great
      Plains Energy
                Income
      Tax Expense
                Income
      Tax RateYear
      to Date June 30
                2008
                2007
                2008
                2007(millions)Federal
      statutory income tax
                $
                10.6
                
                $
                13.0
                
                
                35.0
                %
                
                35.0
                %Differences
      between book and taxdepreciation
      not normalized
                
                (1.3
                )
                
                1.7
                
                
                (4.4
                )
                
                4.7Amortization
      of investment tax credits
                
                (0.7
                )
                
                (0.7
                )
                
                (2.3
                )
                
                (1.9
                )Federal
      income tax credits
                
                (5.0
                )
                
                (3.8
                )
                
                (16.6
                )
                
                (10.2
                )State
      income taxes
                
                0.9
                
                
                (0.7
                )
                
                3.1
                
                
                (1.9
                )Rate
      change on deferred taxes
                
                19.3
                
                
                -
                
                
                63.7
                
                
                -Changes
      in uncertain tax positions, net
                
                (0.6
                )
                
                0.2
                
                
                (2.1
                )
                
                0.5Aquila
      transaction costs
                
                (0.3
                )
                
                -
                
                
                (1.1
                )
                
                -Other
                
                (0.4
                )
                
                (1.4
                )
                
                (1.1
                )
                
                (3.7
                )Total
                $
                22.5
                
                $
                8.3
                
                
                74.2
                %
                
                22.5
                %
 33
 KCP&L
                Income
      Tax Expense
                Income
      Tax RateThree
      Months Ended June 30
                2008
                2007
                2008
                2007(millions)Federal
      statutory income tax
                $
                12.9
                
                $
                18.7
                
                
                35.0
                %
                
                35.0
                %Differences
      between book and taxdepreciation
      not normalized
                
                (1.1
                )
                
                0.8
                
                
                (3.0
                )
                
                1.6Amortization
      of investment tax credits
                
                (0.4
                )
                
                (0.3
                )
                
                (1.0
                )
                
                (0.7
                )Federal
      income tax credits
                
                (2.8
                )
                
                (1.3
                )
                
                (7.7
                )
                
                (2.4
                )State
      income taxes
                
                1.0
                
                
                1.4
                
                
                2.6
                
                
                2.5Rate
      change on deferred taxes
                
                20.3
                
                
                -
                
                
                55.0
                
                
                -Changes
      in uncertain tax positions, net
                
                (0.6
                )
                
                0.4
                
                
                (1.7
                )
                
                0.7Parent
      company tax benefits
                
                (0.8
                )
                
                (1.5
                )
                
                (2.2
                )
                
                (2.8
                )Other
                
                0.5
                
                
                (1.1
                )
                
                1.4
                
                
                (2.0
                )Total
                $
                29.0
                
                $
                17.1
                
                
                78.4
                %
                
                31.9
                %KCP&L
                Income
      Tax Expense
                Income
      Tax RateYear
      to Date June 30
                2008
                2007
                2008
                2007(millions)Federal
      statutory income tax
                $
                18.1
                
                $
                17.7
                
                
                35.0
                %
                
                35.0
                %Differences
      between book and taxdepreciation
      not normalized
                
                (1.3
                )
                
                1.7
                
                
                (2.6
                )
                
                3.4Amortization
      of investment tax credits
                
                (0.7
                )
                
                (0.7
                )
                
                (1.4
                )
                
                (1.4
                )Federal
      income tax credits
                
                (4.9
                )
                
                (3.1
                )
                
                (9.5
                )
                
                (6.1
                )State
      income taxes
                
                1.3
                
                
                1.3
                
                
                2.5
                
                
                2.6Rate
      change on deferred taxes
                
                20.3
                
                
                -
                
                
                39.2
                
                
                -Changes
      in uncertain tax positions, net
                
                (0.6
                )
                
                0.2
                
                
                (1.2
                )
                
                0.3Parent
      company tax benefits
                
                (5.2
                )
                
                (3.2
                )
                
                (10.0
                )
                
                (6.3
                )Other
                
                (0.2
                )
                
                (1.7
                )
                
                (0.2
                )
                
                (3.5
                )Total
                $
                26.8
                
                $
                12.2
                
                
                51.8
                %
                
                24.0
                %
 SFAS No. 109, “Accounting for Income
Taxes,” requires companies to adjust deferred tax assets and liabilities to
reflect tax rates that are anticipated to be in effect when timing differences
reverse.  Due to the sale of Strategic Energy during the second
quarter of 2008, the composite tax rate for the Company is expected to increase
as a result of the change in composition of states that Great Plains Energy
conducts business.  Therefore, deferred tax assets and liabilities
have been adjusted to reflect the increase in the composite tax
rate.  The impact of the increase in the composite tax rate on
deferred tax assets and liabilities resulted in tax expense for Great Plains
Energy and KCP&L of $19.3 million and $20.3 million, respectively, for the
three months ended and year to date June 30, 2008.
  Uncertain Tax
Positions
 Great
Plains Energy and KCP&L recognize tax benefits in accordance with FIN No.
48, “Accounting for Uncertainty in Income Taxes,” an interpretation of SFAS No.
109, “Accounting for Income Taxes.”  FIN No. 48 establishes a
“more-likely-than-not” recognition threshold that must be met before a tax
benefit can be recognized in the financial statements.  Upon adoption
of FIN No. 48 on January 1, 2007, Great Plains Energy recognized an $18.8
million increase in the liability for unrecognized tax benefits.  This
increase was offset by a $0.9 million decrease to the January 1, 2007, balance
of retained earnings, a $17.9 million decrease in deferred taxes, a $4.0 million
decrease in accrued taxes and a $4.0 million increase in accrued
interest.  KCP&L recognized a $19.8 million increase in the
liability for unrecognized tax benefits that was offset by a $0.2 million
decrease to the January 1, 2007, balance of retained earnings, a $15.7 million
decrease in deferred taxes and a $3.9 million decrease in accrued
taxes.
 34
 At June
30, 2008 and December 31, 2007, Great Plains Energy had $23.5 million and $21.9
million, respectively, of liabilities related to unrecognized tax
benefits.  KCP&L had liabilities for unrecognized tax benefits of
$20.3 million and $19.6 million at June 30, 2008 and December 31, 2007,
respectively.  For the three months ended and year to date June 30,
2008, $0.6 million of tax benefits related to unrecognized tax benefits impacted
the effective tax rate for Great Plains Energy and KCP&L.
  For the
three months ended and year to date June 30, 2008, Great Plains Energy
recognized $0.8 million and $1.4 million, respectively, of interest expense
related to unrecognized tax benefits.  For the three months ended and
year to date June 30, 2008, KCP&L recognized $0.2 million and $0.5 million,
respectively, of interest expense related to unrecognized tax
benefits.  At June 30, 2008, and December 31, 2007, accrued interest
related to unrecognized tax benefits for Great Plains Energy was $9.8 million
and $8.4 million, respectively.  KCP&L had accrued interest
related to unrecognized tax benefits of $3.9 million and $3.4 million,
respectively, at June 30, 2008 and December 31, 2007.  No amounts were
accrued for penalties with respect to unrecognized tax benefits.
  On May
12, 2008, Great Plains Energy agreed to IRS audit adjustments related to the
2000 to 2003 tax years.  The audit adjustments and agreement must be
approved by the Joint Committee on Taxation.  The Joint Committee on
Taxation is expected to make a decision before the statute of limitations for
2000 to 2003 is scheduled to expire on December 31, 2008.  If
approved, Great Plains Energy and KCP&L expect to recognize $8.8 million and
$7.8 million, respectively, of federal and state unrecognized tax benefits,
which will result in a decrease to the liability for unrecognized tax benefits
and an increase to deferred tax liabilities with an insignificant impact to
income taxes.  Great Plains Energy and KCP&L expect to reverse
$7.8 million and $2.3 million of pre-tax interest expense previously accrued
related to unrecognized tax benefits if approved.
  Advanced
Coal Credit
 On April
28, 2008, KCP&L was notified that its application filed in 2007 for $125.0
million in advanced coal investment tax credits (ITC) was approved by the
IRS.  The credit is based on the amount of expenses incurred on the
construction of Iatan No. 2.  As a result, Great Plains Energy and
KCP&L recognized $51.5 million of federal tax benefits related to costs
incurred to date on the plant in the second quarter of 2008.  However,
tax laws require the company to reduce income tax expense for ratemaking and
financial statement purposes ratably over the life of the
plant.  Therefore, Great Plains Energy and KCP&L concurrently
recognized $51.5 million of deferred ITC expense to offset the federal tax
benefit.  Great Plains Energy and KCP&L will recognize the tax
benefits of the ITC over the life of the plant once it is placed in
service.
  11.
                DISCONTINUED
      OPERATIONS - SALE OF STRATEGIC
ENERGY
  In 2007,
Great Plains Energy retained a financial advisor to assist in a review of
strategic and structural alternatives for its Strategic Energy
subsidiary.  In April 2008, the Board of Directors approved
management’s recommendation to sell Strategic Energy and Great Plains Energy
entered into an agreement with Direct Energy Services, LLC (Direct Energy), a
subsidiary of Centrica plc, under which Direct Energy acquired all of Great
Plains Energy’s interest in Strategic Energy.  On June 2, 2008, Great
Plains Energy completed the sale of Strategic Energy and received gross cash
proceeds of $305.3 million, including the base purchase price of $300.0 million
plus an estimated working capital adjustment of $5.3 million subject to final
adjustment pursuant to the terms of the purchase agreement.  Great
Plains Energy expects the final adjustment to be insignificant.  In
accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of
Long-Lived Assets,” Strategic Energy is reported as discontinued operations for
the periods presented.
  Under the
terms of the purchase agreement with Direct Energy, Great Plains Energy
indemnifies Direct Energy for various matters, including: breaches of
representations, warranties and covenants; funds advanced by Strategic Energy to
certain of its channel partners if such funds become uncollectible before
December 2, 2009 (approximately $8 million, excluding commission offsets); and
losses associated with litigation and other certain
 35
 claims
exceeding $7.5 million in the aggregate.  Great Plains Energy has not
reserved any amount respecting this indemnification obligation.
  The
following table summarizes the income (loss) from Strategic Energy’s
discontinued operations.
 Three
      Months Ended
                Year
      to DateJune
      30
                June
      302008
                2007
                2008
                2007(millions)Revenues
                $
                139.6
                
                $
                485.5
                
                $
                667.4
                
                $
                894.1Income
      (loss) from operations before income taxes (a)
                $
                92.5
                
                $
                (10.4
                )
                $
                182.4
                
                $
                34.6Loss
      on disposal before income taxes
                
                (116.6
                )
                
                -
                
                
                (116.6
                )
                
                -Total
      income (loss) on discontinued operationsbefore
      income taxes
                
                (24.1
                )
                
                (10.4
                )
                
                65.8
                
                
                34.6Income
      taxes
                
                5.9
                
                
                3.6
                
                
                (31.1
                )
                
                (14.3
                )Income
      (loss) from discontinued operations,net
      of income taxes
                $
                (18.2
                )
                $
                (6.8
                )
                $
                34.7
                
                $
                20.3(a)
                Three
      months ended and year to date June 30, 2008, amounts include $106.0
      million and $189.1 million,respectively
      of unrealized net gains related to derivatives
  contracts.
   The
following table provides additional information regarding the net cash proceeds
and loss on sale of Strategic Energy.
 Sale
      of Strategic Energy(millions)Net
      cash proceeds
                
                
                
                
                $
                270.8Income
      taxes on sale
                
                
                
                
                
                34.5Gross
      cash proceeds
                
                
                
                
                
                305.3Net
      assets of discontinued operations at December 31, 2007
                $
                233.7Intercompany
      liabilities not in discontinued operations
                
                (3.0
                )Income
      taxes on parent included in discontinued operations
                
                6.2Book
      value of investment in Strategic Energy at December 31, 2007
                $
                236.9Increase
      (decrease) to book value:Net
      income (a)
                
                
                
                
                187.8Change
      in OCI
                
                
                
                
                (14.2
                )Equity
      contribution from parent
                
                
                
                
                14.4Distributions
      to parent
                
                
                
                
                (3.0
                )Book
      value of investment in Strategic Energy at June 2, 2008
                
                
                
                
                
                421.9Loss
      on disposal before income taxes
                
                
                
                
                
                
                $
                (116.6
                )(a)
                Amount
      includes $189.1 million of unrealized net gains related to derivatives
      contracts.
 36
 Strategic
Energy’s assets and liabilities of discontinued operations are summarized in the
following table.
 December
      312007Assets
                (millions)Cash
                $
                43.1Restricted
      cash
                
                0.7Receivables,
      net
                
                261.4Deferred
      income taxes
                
                16.2Derivative
      instruments
                
                52.7Nonutility
      property
                
                6.8Goodwill
                
                88.1Other
                
                18.1Total
      assets of discontinued operations
                $
                487.1LiabilitiesAccounts
      payable
                $
                165.1Accrued
      taxes
                
                10.8Derivative
      instruments
                
                38.2Deferred
      income taxes
                
                16.8Other
                
                22.5Total
      liabilities of discontinued operations
                $
                253.4Net
      assets of discontinued operations
                $
                233.7
  12.
                RELATED
      PARTY TRANSACTIONS AND
RELATIONSHIPS
  KCP&L
receives various support and administrative services from
Services.  These services are billed to KCP&L at cost, based on
payroll and other expenses, incurred by Services for the benefit of
KCP&L.  These costs totaled $3.6 million and $7.5 million for the
three months ended and year to date June 30, 2008, respectively, and $3.2
million and $7.8 million for the same periods in 2007.  These costs
consisted primarily of employee compensation, benefits and fees associated with
various professional services.  At June 30, 2008, and December 31,
2007, KCP&L had a short-term intercompany payable to Services of $0.9
million and $1.8 million, respectively.  Also at June 30, 2008, and
December 31, 2007, KCP&L had a long-term intercompany payable to Services of
$1.1 million and $1.5 million, respectively, related to unrecognized pension
expense recorded under the provision of SFAS No. 158.  At June 30,
2008, KCP&L had a short-term intercompany payable to Great Plains Energy of
$7.5 million and at December 31, 2007, KCP&L had a short-term intercompany
receivable from Great Plains Energy of $10.5 million.  At December 31,
2007, KCP&L’s balance sheet reflects a note payable from HSS to Great Plains
Energy of $0.6 million.
  13.
                COMMITMENTS
      AND CONTINGENCIES
  Environmental
Matters
 The
Company is subject to regulation by federal, state and local authorities with
regard to air quality and other environmental matters primarily through
KCP&L’s operations.  The generation, transmission and distribution
of electricity produces and requires disposal of certain hazardous products that
are subject to these laws and regulations.  In addition to imposing
continuing compliance obligations, these laws and regulations authorize the
imposition of substantial penalties for noncompliance, including fines,
injunctive relief and other sanctions.  Failure to comply with these
laws and regulations could have a material adverse effect on KCP&L and Great
Plains Energy.
 37
 KCP&L
seeks to use current environmental technology.  KCP&L conducts
environmental audits designed to ensure compliance with governmental
regulations.  At June 30, 2008, and December 31, 2007, KCP&L had
$0.3 million accrued for environmental remediation expenses.  The
accrual covers water monitoring at one site.  The amounts accrued were
established on an undiscounted basis and KCP&L does not currently have an
estimated time frame over which the accrued amounts may be paid.
  Environmental-related
legislation is continually introduced and such legislation typically includes
various compliance dates and compliance limits.  It is possible that
legislation could be enacted at the federal or state level to address global
climate change, including efforts to reduce and control the emission of
greenhouse gases, such as CO2, which is
created in the combustion of fossil fuels.  In addition, there could
be national and/or state mandates to produce a set percentage of electricity
from renewable forms of energy, such as wind.  The probability and
impact of such legislation cannot be reasonably estimated at this time,
including the cost to install new equipment to achieve compliance, but such
legislation could have the potential for a significant financial and operational
impact on KCP&L.  KCP&L would seek recovery of capital costs
and expenses for such compliance through rate increases; however, there can be
no assurance that such rate increases would be granted.
  The Clean
Air Act requires companies to obtain permits and, if necessary, install control
equipment to reduce emissions when making a major modification or a change in
operation if either is expected to cause a significant net increase in regulated
emissions.  The Sierra Club and Concerned Citizens of Platte County
have claimed that modifications were made to Iatan No. 1 in violation of Clean
Air Act regulations.  Although KCP&L has entered into a
Collaboration Agreement with those parties that provides, among other things,
for the release of such claims, the Collaboration Agreement does not bind any
other entity.  In 2007, KCP&L became aware of subpoenas issued by
a Federal grand jury to certain third parties seeking documents relating to
capital projects at Iatan No. 1.  In May 2008, a subpoena requesting
documents was received by KCP&L.  KCP&L is preparing a
response to the subpoena.  The ultimate outcome of these grand jury
activities cannot presently be determined, nor can the costs and other
liabilities that could potentially result from a negative outcome presently be
reasonably estimated.  There is no assurance these costs, if any,
could be recovered in rates and failure to recover such costs could have a
significant adverse affect on Great Plains Energy’s and KCP&L’s results of
operations, financial position and cash flows.
  The
following table contains current estimates of KCP&L’s capital expenditures
(exclusive of allowance for funds used during construction and property taxes)
to comply with the Clean Air Interstate Rule (CAIR) as it existed before the
July 2008 court order vacating the rule, and BART, including accelerated
environmental upgrade expenditures outlined in KCP&L’s Comprehensive Energy
Plan.  As discussed below, CAIR has been vacated and the matter
remanded to the EPA.  It is not possible to project what rules the EPA
may issue as a result of this remand, or the costs associated with such
rules.  The actual cost of compliance with these future rules, and for
BART, may be significantly different from the cost estimates provided in the
following table.  The following table does not reflect any costs for
complying with other future laws or regulations, including potential regulations
regarding mercury.  The allocation between states is based on location
of the facilities and has no bearing as to recovery in jurisdictional
rates.  38
 Clean
      Air EstimatedEnvironmental
      Expenditures (a)
                
                Missouri
                Kansas
                Total(millions)CAIR
                
                $478
                -
                661
                $
                -
                
                $478
                -
                661
                (b)Incremental
      BART
                
                
                -
                
                538
                -
                657
                538
                -
                657
                (c)Less:
      expenditures through June 30, 2008
                
                (182)
                
                -
                
                (182)Estimated
      remaining required environmental expenditures
                
                $296
                -
                479
                $538
                -
                657
                $834
                -
                1,136(a)
                The
      amounts reflect KCP&L's portion of the cost of projects at
      jointly-owned units.(b)
                Changes
      from the 2007 Form 10-K reflect a change in assumptions related to the
      type of equipment that may be installed at theMontrose
      Station and updated estimates for Iatan No. 1.(c)
                Reflects
      an estimated $261 million to $318 million associated with the LaCygne No.
      1 baghouse and scrubber project includedin
      the Comprehensive Energy Plan.
  The table
does not reflect potential costs relating to additional wind generation, energy
efficiency and other CO2 emission
offsets contemplated by the Collaboration Agreement.  Potential costs
relating to the additional wind generation and energy efficiency investments
that are subject to regulatory approval cannot be reasonably estimated at this
time.  Also, the potential costs relating to the additional offset of
approximately 711,000 tons of CO2 emissions
by the end of 2012 under the Collaboration Agreement cannot be reasonably
estimated at this time.  KCP&L will evaluate the available
operational and capital resource alternatives, and will select the most
cost-effective mix of actions to achieve this additional offset.  The
potential capital costs of the Collaboration Agreement provisions relating to
emission limits at Iatan and LaCygne generating stations are within the overall
estimated capital cost ranges disclosed below.  KCP&L expects to
seek recovery of the costs associated with the Collaboration Agreement through
rate increases; however, there can be no assurance that such rate increases
would be granted.
  Clean
Air Interstate Rule
 The EPA’s
recently vacated CAIR required reductions in SO2 and
NOx
emissions in 28 states, including Missouri.  The reduction in both
SO2
and NOx emissions
would have been accomplished through establishment of permanent statewide caps
for NOx effective
January 1, 2009, and SO2 effective
January 1, 2010.  More restrictive caps would have been effective
January 1, 2015.  KCP&L’s fossil fuel-fired plants located in
Missouri were subject to CAIR, while its fossil fuel-fired plants in Kansas were
not.
  On July
11, 2008, the D.C. Circuit Court of Appeals vacated CAIR in its entirety and
remanded the matter to the EPA to promulgate a new rule that is consistent with
its opinion.  The Court has not issued its mandate, and CAIR is still
in effect until that occurs.  The Court's mandate will be deferred
during the 45-day period allowed for the filing of any petitions for rehearing,
unless a petition is received and granted for immediate issuance of the
mandate.  Until the Court’s mandate is issued and potential subsequent
appeals are resolved, it is difficult to anticipate the EPA’s
response.
 
 On remand
to the EPA, CAIR could be revised to reflect the Court’s decision, which could
result in a rule that requires greater emission reductions, imposes an earlier
compliance deadline, changes or eliminates the NOx fuel
factor adjustment, includes additional states (including Kansas), does not allow
for emissions reductions to be obtained through interstate allowance trading, or
the use of the Acid Rain Program SO2
allowances, or imposes other requirements not yet known, any of which could
significantly increase the compliance costs noted in the preceding
table.
 
 KCP&L
expected to meet the emissions reductions required by CAIR at its Missouri
plants through a combination of pollution control capital projects and the
purchase of emission allowances as needed.  CAIR established a
market-based cap-and-trade program with an emission allowance
allocation.  Facilities would have demonstrated compliance with CAIR
by holding sufficient allowances for each ton of SO2 and
NOx
emitted in
 39
 any given
year.  KCP&L would also have been allowed to utilize unused
SO2
emission allowances that it has accumulated during previous years of the Acid
Rain Program to meet the more stringent CAIR requirements.  At June
30, 2008, KCP&L had accumulated unused SO2 emission
allowances sufficient to support just over 94,000 tons of SO2 emissions
under the provisions of the Acid Rain program, which are recorded in inventory
at zero cost.  KCP&L is permitted to sell excess SO2 emission
allowances in accordance with KCP&L’s Comprehensive Energy Plan as approved
by the MPSC and KCC.
 
 Analysis
of the CAIR rule indicated that NOx and
SO2
control might have been required for KCP&L’s Montrose Station in Missouri,
in addition to the environmental upgrades at Iatan No. 1 included in the
Comprehensive Energy Plan.  NOx and
SO2
control for KCP&L’s Montrose Station could have been achieved under CAIR
through a combination of pollution control equipment and the use or purchase of
emission allowances as needed.  As required by the Collaboration
Agreement, a study will be completed in 2008 to assess potential future use of
Montrose Station, including without limitation, retiring, re-powering and
upgrading the units.  Some of the control technology for SO2 and
NOx
could also aid in the control of mercury.
  The
estimated required environmental expenditures presented in the table above do
not reflect any amounts for compliance with a revised or replaced CAIR because
management cannot predict the outcome of further legislative, judicial or
regulatory actions or their financial or operational effects on
KCP&L.  However, such actions could have a significant effect on
Great Plains Energy’s and KCP&L’s business, results of operations and
financial position.
  Best
Available Retrofit Technology Rule
 The EPA
BART rule directs state air quality agencies to identify whether
visibility-reducing emissions from sources subject to BART are below limits set
by the state or whether retrofit measures are needed to reduce
emissions.  BART applies to specific eligible facilities including
LaCygne Nos. 1 and 2 in Kansas and Iatan No. 1 and Montrose No. 3 in
Missouri.  Initially, in Missouri, compliance with CAIR is compliance
with BART for individual sources.  Depending on how the EPA responds
to the July 11, 2008, D.C. Circuit Court of Appeals decision vacating CAIR, the
timing of installation of environmental control equipment and the availability
of SO2emission allowances, the estimated required environmental expenditures
presented in the table above could shift from CAIR to incremental BART for
Missouri.  In the Collaboration Agreement, KCP&L agreed to seek a
consent agreement, which it has done, with the Kansas Department of Health and
Environment (KDHE) incorporating limits for stack particulate matter emissions,
as well as limits for NOx and
SO2
emissions at its LaCygne Station that will be below the presumptive limits under
BART.  KCP&L further agreed to use its best efforts to install
emission control technologies to reduce those emissions from the LaCygne Station
prior to the required compliance date under BART, but in no event later than
June 1, 2015.  KCP&L further agreed to issue requests for proposal
for the equipment required to comply with BART by December 31, 2008, requesting
that construction commence by December 31, 2010.
  Mercury
Emissions
 The EPA
Clean Air Mercury Rule (CAMR) regulated mercury emissions from coal-fired power
plants located in 48 states, including Kansas and Missouri, under the Clean Air
Act.  In February 2008, a court vacated and remanded CAMR back to the
EPA.  In March 2008, the court issued its mandate.  As a
result, the rule is effectively void.  In May 2008, petitions for
rehearing of the matter by the full court were denied.  The time for
an appeal to the Supreme Court has not expired.  If all appeals are
denied, it is likely that the EPA will develop maximum achievable control
technology (MACT) standards for mercury emissions.  These MACT
standards, if adopted, could impact both KCP&L’s new and existing
facilities.  The estimated required environmental expenditures
presented in the table above do not reflect any amounts for compliance with the
vacated CAMR or possible MACT standards because management cannot predict the
outcome of further judicial or regulatory actions or their financial or
operations effects on KCP&L.  However, such effects could be
significant.
 40
 Carbon
Dioxide
 Many
bills concerning greenhouse gases, including CO2,are
being debated at the federal and state levels.  There are various
compliance dates and reduction strategies stipulated in the
bills.  While legislation at both the federal and state levels has
been introduced, it is difficult to predict when or if the legislation will be
enacted.  The U.S. Supreme Court has determined that the EPA has
statutory authority to regulate CO2from
new motor vehicles if the EPA forms a judgment that such emissions contribute to
climate change.  If the EPA forms such a judgment, it may ultimately
regulate other sources of CO2, which may
include KCP&L facilities.  The KDHE has indicated that it intends
to engage industries and stakeholders to establish goals for reducing CO2 emissions
and strategies to achieve those goals.
  Greenhouse
gas regulation has the potential for a significant financial and operational
impact on KCP&L in connection with achieving compliance with limits that may
be established.  However, the financial and operational consequences
to KCP&L cannot be determined until final legislation is passed or
regulations enacted.  Management will continue to monitor the progress
of bills and regulations.  As previously discussed, KCP&L has
entered into a Collaboration Agreement that includes various provisions
regarding wind generation, energy efficiency and other CO2offsets.
  In May
2008, the Kansas legislature passed a bill requiring certain coal-fired
generating units commencing operation after January 1, 2008, to engage in the
capture, reduction or mitigation of carbon dioxide if regulations for the
emission of carbon dioxide from these facilities have been
established.  Another provision in the bill required certain
coal-fired generating units commencing operation after January 1, 2008, to
achieve 80% or greater reduction of mercury emissions.  Neither of
these provisions applied to KCP&L’s existing or currently planned
facilities, but could have applied to future generation facilities constructed
in Kansas.  The Kansas governor subsequently vetoed the bill and the
legislature did not override the veto.
  Ozone
 In June
2007, monitor data indicated that the Kansas City area violated the primary
eight-hour ozone national ambient air quality standard
(NAAQS).  Missouri and Kansas have implemented the responses
established in the maintenance plans for control of ozone.  The
responses in both states do not require additional controls at KCP&L’s
generation facilities beyond the currently proposed controls for CAIR and
BART.  The EPA has various options over and above the implementation
of the maintenance plans for control of ozone to address a confirmed
violation.  These options include, but are not limited to, designating
the area “non-attainment” and requiring a new regulatory plan to reduce
emissions or leaving the designation unchanged, but still requiring a new
regulatory plan.  At this time, management is unable to predict how
the EPA will respond or how that response will impact KCP&L’s operations,
but the EPA’s response could have a significant impact on Great Plains Energy's
and KCP&L's results of operations and financial position.
  On March
12, 2008, the EPA significantly strengthened its NAAQS for ground-level
ozone.  The EPA is revising the primary eight-hour ozone standard,
designed to protect public health, to a level of 0.075 parts per million
(ppm).  The EPA is also strengthening the secondary eight-hour ozone
standard to the level of 0.075 ppm making it identical to the revised primary
standard.  The previous primary and secondary standards, set in 1997,
was effectively 0.084 ppm.
  By March
2009, states are required to make recommendations for areas to be designated
attainment and nonattainment.  By March 2010, the EPA will make final
designations of attainment and nonattainment areas.  By 2013, states
must submit state implementation plans, outlining how states will reduce ozone
to meet the standards, in nonattainment areas.  Although the impact on
KCP&L operations will not be known until after the nonattainment
designations are made and the state implementation plans are submitted, the
impact could have a significant effect on Great Plains Energy’s and KCP&L’s
results of operations and financial position.
 41
 Sulfuric
Acid Mist BACT Analysis – Iatan Station
 As a
requirement of the Iatan Station air permit and the Collaboration Agreement,
KCP&L submitted a best available control technology (BACT) analysis for
sulfuric acid mist to Missouri Department of Natural Resources (MDNR) in June
2007.  MDNR will conduct its own BACT analysis and determine the final
emission limit.  Although KCP&L believes the emission limit
submitted is a BACT limit and can be achieved by the currently proposed emission
control equipment, MDNR may ultimately determine a BACT limit for sulfuric acid
mist that could require additional control equipment.  The above Clean
Air Estimated Required Environmental Expenditures table does not reflect the
potential costs for additional controls that may be required to meet such a
determination.  If MDNR does make such a determination, KCP&L will
evaluate the available operational and capital resource alternatives, and will
select the most cost-effective mix of actions to achieve
compliance.
  Water
Use Regulations
 The Clean
Water Act (Act) establishes standards for cooling water intake
structures.  The EPA had previously issued regulations pursuant to
Section 316(b) of the Act regarding cooling water intake
structures.  Subsequent to an appellate court ruling, the EPA
suspended the regulations and is engaged in further rulemaking on this
matter.  In April 2008, the Supreme Court agreed to hear an appeal on
the issue of whether the Act authorized the EPA to compare costs with benefits
in determining the best technology available for minimizing adverse
environmental impact at cooling water intake structures.  At this
time, management is unable to predict the outcome of this proceeding, how the
EPA will respond or how that response will impact KCP&L’s
operations.
  KCP&L
holds a permit from the MDNR covering water discharge from its Hawthorn
Station.  The permit authorizes KCP&L, among other things, to
withdraw water from the Missouri river for cooling purposes and return the
heated water to the Missouri river.  KCP&L has applied for a
renewal of this permit and the EPA has submitted an interim objection letter
regarding the allowable amount of heat that can be contained in the returned
water.  Until this matter is resolved, KCP&L continues to operate
under its current permit.  KCP&L cannot predict the outcome of
this matter; however, while less significant outcomes are possible, this matter
may require KCP&L to reduce its generation at Hawthorn Station, install
cooling towers or both, any of which could have a significant impact on
KCP&L.  The outcome could also affect the terms of water permit
renewals at KCP&L’s Iatan and Montrose Stations.
  Nuclear
Plant
  Spent
Nuclear Fuel and Radioactive Waste
 Under the
Nuclear Waste Policy Act of 1982, the Department of Energy (DOE) is responsible
for the permanent disposal of spent nuclear fuel.  KCP&L pays the DOE a
quarterly fee of one-tenth of a cent for each kWh of net nuclear generation
delivered and sold for the future disposal of spent nuclear fuel.  These
disposal costs are charged to fuel expense.  On June 3, 2008, the DOE filed
with the Nuclear Regulatory Commission (NRC) an application for authority to
construct a national repository for the disposal of spent nuclear fuel and
high-level radioactive waste at Yucca Mountain, Nevada.  The application is
now undergoing a 90-day review by the NRC to determine whether it will accept
the application for docketing.  On July 15, 2008, the director of the DOE’s
Office of Civilian Radioactive Waste Management (OCRWM) testified before
Congress that, assuming the NRC approves the application in the next three to
four years, the DOE could be ready to begin accepting spent nuclear fuel by
2020, but only if Congress provides adequate funding for the project. 
Management cannot predict when this site may be available for Wolf Creek. 
Under current DOE policy, once a permanent site is available, the DOE will
accept spent nuclear fuel first from the owners with the older spent fuel. 
Wolf Creek has completed an on-site storage facility designed to hold all spent
fuel generated at the plant through 2025.  If the DOE meets its revised
timetable for accepting spent fuel for disposal by 2020, management expects that
the DOE could begin accepting some of Wolf Creek’s spent fuel by
2028.  Management can make no assurance that the DOE will meet its
revised timetable and will continue to monitor this activity.  See Note 14
for a related legal proceeding.
 42
 Low-Level
Radioactive Waste
 Wolf
Creek disposes of all classes of its low-level radioactive waste at existing
third-party repositories.  Effective July 1, 2008, the State of South
Carolina no longer accepts low-level radioactive waste at its disposal site at
Barnwell, South Carolina, except for waste from generators located in South
Carolina, Connecticut, and New Jersey, the three states that make up the
Atlantic Interstate Low-Level Radioactive Waste Management Compact. 
Management expects that another site in the state of Utah will remain available
to Wolf Creek.  Should disposal capability become unavailable,
management believes Wolf Creek will be able to store its low-level radioactive
waste in an on-site facility.  Management believes that a temporary
loss of low-level radioactive waste disposal capability would not affect Wolf
Creek’s continued operation.
  Contractual
Commitments
 The
following table updates selected items from Great Plains Energy’s and
KCP&L’s contractual commitments in the 2007 Form 10-K to reflect significant
changes.
 Remainder
      of2008
                2009
                2010
                2011
                2012
                After
      2012
                
                Total(millions)Fuel
                $
                74.2
                
                $
                105.1
                
                $
                72.4
                
                $
                12.4
                
                $
                15.5
                
                $
                195.2
                
                
                $
                474.8Comprehensive
      Energy Plan
                
                386.2
                
                
                331.2
                
                
                68.0
                
                
                -
                
                
                -
                
                
                -
                
                
                
                785.4
 Fuel
commitments consist of commitments for nuclear fuel, coal, coal transportation
and natural gas.  Comprehensive Energy Plan represents KCP&L’s
contractual commitments for projects included in its Comprehensive Energy Plan
including jointly owned units.  KCP&L expects to be reimbursed by
other owners for their respective share of Iatan No. 2 and environmental
retrofit costs included in the Comprehensive Energy Plan contractual
commitments.
 
 14.
                LEGAL
      PROCEEDINGS
  Kansas
City Power & Light Company v. Union Pacific Railroad Company
 In
October 2005, KCP&L filed a rate complaint case with the Surface
Transportation Board (STB) charging that Union Pacific Railroad Company’s (Union
Pacific) rates for transporting coal from the Powder River Basin (PRB) in
Wyoming to KCP&L’s Montrose Station are unreasonably high.  Prior
to the end of 2005, the rates were established under a contract with Union
Pacific.  Efforts to extend the term of the contract were unsuccessful
and Union Pacific is the only service for coal transportation from the PRB to
Montrose Station.  KCP&L charged that Union Pacific possesses
market dominance over the traffic and requested the STB prescribe maximum
reasonable rates.
  On May
16, 2008, the STB found that the rates Union Pacific charged on coal movement
from the PRB to KCP&L’s Montrose Station exceeded the maximum reasonable
rate of 180% of variable costs.  Consequently, the STB prescribed a
maximum reasonable rate of 180% of variable costs until the end of
2015.  Additionally, the STB ordered reparations to be paid, with
interest, for coal deliveries made from January 1, 2006 through the date a new
rate is established.  It is estimated that the reparations with
interest due to KCP&L for 2006 coal deliveries are approximately $2.9
million.  Reparations for subsequent periods cannot be calculated at
this time because actual costs for the period have not been
finalized.  Union Pacific did not appeal the decision.
  Hawthorn
No. 5 Litigation
 KCP&L
received reimbursement for the 1999 Hawthorn No. 5 boiler explosion under a
property damage insurance policy with Travelers Property Casualty Company of
America (Travelers).  Travelers filed suit in the U.S. District Court
for the Eastern District of Missouri in November 2005, against National Union
Fire Insurance Company of Pittsburgh, Pennsylvania, (National Union) and
KCP&L was added as a defendant in June 2006.
 43
 The case
was subsequently transferred to the U.S. District Court for the Western District
of Missouri.  Travelers sought recovery of $10 million that KCP&L
recovered through subrogation litigation.  On July 24, 2008, the Court
granted KCP&L’s motion to dismiss.  The Court held that Travelers
is not entitled to any of the money at issue in this case.  Travelers
has the right to appeal this decision, although no appeal has been filed at this
time.
  Emergis
Technologies, Inc.
 In March
2006, Emergis Technologies, Inc. f/k/a BCE Emergis Technologies, Inc. (Emergis)
filed suit against KCP&L in U.S. District Court for the Western District of
Missouri, alleging infringement of a patent, entitled “Electronic Invoicing and
Payment System” and seeking unspecified monetary damages and injunctive
relief.  This patent relates to automated electronic bill presentment
and payment systems, particularly those involving Internet billing and
collection.  In March 2006, KCP&L filed a response and denied
infringing the patent.  KCP&L counterclaimed for a declaration
that the patent is invalid and not infringed.  The parties filed a
joint stipulation of dismissal and the court ordered the case dismissed in
February 2008.
 
 Spent
Nuclear Fuel and Radioactive Waste
 In 2004,
KCP&L and the other two Wolf Creek owners filed suit against the United
States in the U.S. Court of Federal Claims seeking an unspecified amount of
monetary damages resulting from the government’s failure to begin accepting
spent nuclear fuel for disposal in January 1998, as the government was required
to do by the Nuclear Waste Policy Act of 1982.  Approximately
sixty-five other similar cases were filed with that court, a few of which have
settled.  To date, the court has rendered final decisions in several
of the cases, most of which are on appeal now.  The Wolf Creek case is
on a court-ordered stay until further order of the court to allow for some of
the earlier cases to be decided first by an appellate court.  Another
Federal appellate court has already determined that the government breached its
obligation to begin accepting spent fuel for disposal.  The questions
now before the court in the pending cases are whether and to what extent the
utilities are entitled to monetary damages for that breach.
  Weinstein
v. KLT Telecom
 Richard
D. Weinstein (Weinstein) filed suit against KLT Telecom Inc. (KLT Telecom) in
September 2003 in the Circuit Court of St. Louis County,
Missouri.  KLT Telecom acquired a controlling interest in DTI
Holdings, Inc. (Holdings) in February 2001 through the purchase of approximately
two-thirds of the Holdings stock held by Weinstein.  In connection
with that purchase, KLT Telecom entered into a put option in favor of Weinstein,
which granted Weinstein an option to sell to KLT Telecom his remaining shares of
Holdings stock.  The put option provided for an aggregate exercise
price for the remaining shares equal to their fair market value with an
aggregate floor amount of $15 million and was exercisable between September 1,
2003, and August 31, 2005.  In June 2003, the stock of Holdings was
cancelled and extinguished pursuant to the joint Chapter 11 plan confirmed by
the Bankruptcy Court.  In September 2003, Weinstein delivered a notice
of exercise of his claimed rights under the put option.  KLT Telecom
rejected the notice of exercise, and Weinstein filed suit alleging breach of
contract.  Weinstein sought damages of at least $15 million, plus
statutory interest.  In April 2005, summary judgment was granted in
favor of KLT Telecom, and Weinstein appealed this judgment to the Missouri Court
of Appeals for the Eastern District, which affirmed the judgment.  The
judgment was appealed to the Missouri Supreme Court, which reversed the decision
of the trial court and remanded the case to the trial court for further handling
on May 29, 2007.  In March 2008, the parties settled this matter for an
amount less than the $15 million reserve recorded in 2001 and Great Plains
Energy released the remaining reserve resulting in $3.4 million of after-tax
income.
 44
 15.
                ASSET
      RETIREMENT OBLIGATIONS
  Asbestos
abatement activity is currently underway on certain generating units at
KCP&L’s Hawthorn Station resulting in a revision in timing used in computing
the original present value of the asbestos ARO.  With the five-year
asbestos abatement project currently underway, management was able to perform an
analysis to update prior cost estimates determining an increase in comparison to
previous estimates used in computing the original asbestos ARO.  As a
result of the increased costs experienced in the project at KCP&L’s Hawthorn
station, management performed an analysis to update prior cost estimates for
KCP&L’s Montrose and LaCygne Stations, determining an increase in comparison
to previous estimates.  As a result of these changes, KCP&L has
recorded a $17.2 million increase in the ARO for asbestos abatement with a
corresponding increase in asset retirement costs in utility plant since December
31, 2007.
  In
addition, management identified an additional asbestos ARO.  The
wiring used in generating stations includes asbestos insulation, which would
require special handling if disturbed.  Due to the inability to
reasonably estimate the quantities or the amount of disturbance that will be
necessary during dismantlement at the end of the life of the plant, a fair value
of the obligation cannot be reasonably estimated at this
time.  Management will continue to monitor the obligation and will
recognize a liability in the period in which sufficient information becomes
available to reasonably estimate its fair value.
  The
following table summarizes the change in Great Plains Energy’s and KCP&L’s
AROs.
 June
      30
                December
      312008
                2007(millions)Beginning
      balance
                $
                94.5
                
                $
                91.8Additions
                
                17.2
                
                
                -Settlements
                
                (2.3
                )
                
                (1.1
                )Accretion
                
                3.0
                
                
                3.8Ending
      balance
                $
                112.4
                
                $
                94.5
 16.
                SEGMENTS
      AND RELATED INFORMATION
  Great
Plains Energy
 Great
Plains Energy has one reportable segment based on its method of internal
reporting which generally segregates reportable segments based on products and
services, management responsibility and regulation.  On June 2, 2008,
Great Plains Energy completed the sale of Strategic Energy.  As a
result, Strategic Energy’s financial results are reported as discontinued
operations and Strategic Energy is no longer considered a reportable
segment.  The one reportable business segment is KCP&L, an
integrated, regulated electric utility.  Other includes HSS, Services,
KLT Inc. (including Strategic Energy discontinued operations), unallocated
corporate charges, consolidating entries and intercompany
eliminations.  Intercompany eliminations include insignificant amounts
of intercompany financing-related activities.  The summary of
significant accounting policies applies to the reportable
segment.  For segment reporting, the segment’s income taxes include
the effects of allocating holding company tax benefits.  Segment
performance is evaluated based on net income.
 45
 The
following tables reflect summarized financial information concerning Great
Plains Energy’s reportable segments.  Prior year information has been
recast to reflect Strategic Energy as discontinued operations.
 Three
      Months Ended
                
                
                
                
                Great
      PlainsJune
      30, 2008
                KCP&L
                Other
                Energy(millions)Operating
      revenues
                $
                335.0
                
                $
                -
                
                $
                335.0Depreciation
      and amortization
                
                (50.8
                )
                
                -
                
                
                (50.8
                )Interest
      charges
                
                (19.9
                )
                
                9.5
                
                
                (10.4
                )Income
      taxes
                
                (29.0
                )
                
                (3.0
                )
                
                (32.0
                )Loss
      from equity investments
                
                -
                
                
                (0.4
                )
                
                (0.4
                )Discontinued
      operations
                
                -
                
                
                (18.2
                )
                
                (18.2
                )Net
      income (loss)
                
                7.9
                
                
                (12.9
                )
                
                (5.0
                )Year
      to Date
                
                
                
                
                
                
                Great
      PlainsJune
      30, 2008
                KCP&L
                Other
                Energy(millions)Operating
      revenues
                $
                632.6
                
                $
                -
                
                $
                632.6Depreciation
      and amortization
                
                (101.0
                )
                
                -
                
                
                (101.0
                )Interest
      charges
                
                (36.7
                )
                
                (15.3
                )
                
                (52.0
                )Income
      taxes
                
                (26.8
                )
                
                4.3
                
                
                (22.5
                )Loss
      from equity investments
                
                -
                
                
                (0.8
                )
                
                (0.8
                )Discontinued
      operations
                
                -
                
                
                34.7
                
                
                34.7Net
      income
                
                24.9
                
                
                17.6
                
                
                42.5Three
      Months Ended
                
                
                
                
                
                
                Great
      PlainsJune
      30, 2007
                KCP&L
                Other
                Energy(millions)Operating
      revenues
                $
                319.1
                
                $
                -
                
                $
                319.1Depreciation
      and amortization
                
                (43.8
                )
                
                -
                
                
                (43.8
                )Interest
      charges
                
                (16.7
                )
                
                (0.8
                )
                
                (17.5
                )Income
      taxes
                
                (17.1
                )
                
                1.9
                
                
                (15.2
                )Loss
      from equity investments
                
                -
                
                
                (0.3
                )
                
                (0.3
                )Discontinued
      operations
                
                -
                
                
                (6.8
                )
                
                (6.8
                )Net
      income (loss)
                
                36.5
                
                
                (10.9
                )
                
                25.6
 46
 Year
      to Date
                
                
                
                
                Great
      PlainsJune
      30, 2007
                KCP&L
                Other
                Energy(millions)Operating
      revenues
                $
                574.8
                
                $
                -
                
                $
                574.8Depreciation
      and amortization
                
                (86.8
                )
                
                -
                
                
                (86.8
                )Interest
      charges
                
                (34.9
                )
                
                (3.7
                )
                
                (38.6
                )Income
      taxes
                
                (12.2
                )
                
                3.9
                
                
                (8.3
                )Loss
      from equity investments
                
                -
                
                
                (0.7
                )
                
                (0.7
                )Discontinued
      operations
                
                -
                
                
                20.3
                
                
                20.3Net
      income
                
                38.6
                
                
                10.4
                
                
                49.0
 Great
      PlainsKCP&L
                Other
                EnergyJune
      30, 2008
                (millions)Assets
                $
                4,703.5
                
                $
                64.9
                
                $
                4,768.4Capital
      expenditures (a)
                
                378.8
                
                
                0.8
                
                
                379.6December
      31, 2007Assets
      (b)
                $
                4,290.7
                
                $
                541.4
                
                $
                4,832.1Capital
      expenditures (a)
                
                511.5
                
                
                4.4
                
                
                515.9(a)Capital expenditures reflect year to date amounts for the periods
      presented.(b)Other includes assets of discontinued
  operations.
 47
 KCP&L
 The
following tables reflect summarized financial information concerning KCP&L’s
reportable segment for 2007.  For the periods prior to the January 2,
2008, transfer of HSS to KLT Inc., other included HSS and intercompany
eliminations.  Intercompany eliminations include insignificant amounts
of intercompany financing-related activities.
 Three
      Months Ended
                
                
                
                
                ConsolidatedJune
      30, 2007
                KCP&L
                Other
                KCP&L(millions)Operating
      revenues
                $
                319.1
                
                $
                -
                
                $
                319.1Depreciation
      and amortization
                
                (43.8
                )
                
                -
                
                
                (43.8
                )Interest
      charges
                
                (16.7
                )
                
                -
                
                
                (16.7
                )Income
      taxes
                
                (17.1
                )
                
                -
                
                
                (17.1
                )Net
      income
                
                36.5
                
                
                -
                
                
                36.5Year
      to Date
                
                
                
                
                
                
                ConsolidatedJune
      30, 2007
                KCP&L
                Other
                KCP&L(millions)Operating
      revenues
                $
                574.8
                
                $
                -
                
                $
                574.8Depreciation
      and amortization
                
                (86.8
                )
                
                -
                
                
                (86.8
                )Interest
      charges
                
                (34.9
                )
                
                -
                
                
                (34.9
                )Income
      taxes
                
                (12.2
                )
                
                -
                
                
                (12.2
                )Net
      income (loss)
                
                38.6
                
                
                (0.1
                )
                
                38.5
 17.
                DERIVATIVE
      INSTRUMENTS
  The
Company is exposed to a variety of market risks including interest rates and
commodity prices.  Management has established risk management policies
and strategies to reduce the potentially adverse effects that the volatility of
the markets may have on the Company’s operating results.  The risk
management activities, including the use of derivative instruments, are subject
to the management, direction and control of internal risk management
committees.  Management’s interest rate risk management strategy uses
derivative instruments to adjust the Company’s liability portfolio to optimize
the mix of fixed and floating rate debt within an established
range.  In addition, the Company uses derivative instruments to hedge
against future interest rate fluctuations on anticipated debt
issuances.  Management maintains commodity-price risk management
strategies that use derivative instruments to reduce the effects of fluctuations
in fuel expense caused by commodity price volatility.  Counterparties
to commodity derivatives and interest rate swap agreements expose the Company to
credit loss in the event of nonperformance.  This credit loss is
limited to the cost of replacing these contracts at current market
rates.  Derivative instruments, excluding those instruments that
qualify for the Normal Purchases and Normal Sales (NPNS) election, which are
accounted for by accrual accounting, are recorded on the balance sheet at fair
value as an asset or liability.  Changes in the fair value are
recognized currently in net income unless specific hedge accounting criteria are
met.
  Interest
Rate Risk Management
 Forward
Starting Swaps
 In July
2007, Great Plains Energy entered into three Forward Starting Swaps (FSS), with
a total notional amount of $250.0 million, to hedge against interest rate
fluctuations on future issuances of long-term debt.  The FSS were
designed to effectively remove most of the interest rate uncertainty and, to the
extent that swap spreads correlate with credit spreads, some degree of credit
spread uncertainty with respect to the debt to be issued, thereby
 48
 enabling
Great Plains Energy to predict with greater assurance its future interest costs
on that debt.  The FSS were originally for anticipated financing
related to the Aquila acquisition and treated as an economic
hedge.  Due to a change in financing plans, during the second quarter
of 2008, Great Plains Energy redesignated the FSS from an economic hedge
(non-hedging derivative) to a cash flow hedge.  Prior to the
redesignation, the change in the fair value of the FSS decreased interest
expense by $12.7 million and increased interest expense by $9.2 million for the
three months ended and year to date June 30, 2008,
respectively.  Subsequent to the redesignation, the FSS are accounted
for as cash flow hedges and the fair value is recorded as a current asset or
liability with an offsetting entry to OCI, to the extent the hedges are
effective, until the forecasted transaction occurs.  No
ineffectiveness has been recorded on the FSS.  The pre-tax gain or
loss on the FSS recorded to OCI will be reclassified to interest expense over
the life of the future debt issuance.
  Treasury
Locks
 In 2007,
Great Plains Energy entered into three T-Locks, with a notional amount of $350.0
million, to hedge against interest rate fluctuations on the U.S. Treasury rate
component on future issuances of long-term debt.  Following a change
in financing plans, Great Plains Energy assigned the T-Locks to
KCP&L.  In the first quarter of 2008, KCP&L issued $350.0
million 10-year long-term debt and the T-Locks settled simultaneously with the
issuance of this long-term fixed rate debt.  The T-Locks were
accounted for as cash flow hedges and KCP&L’s interest expense year to date
June 30, 2008, includes a loss of $0.7 million due to ineffectiveness of the
cash flow hedge.  A pre-tax loss of $39.1 million was recorded to OCI
and is being reclassified to interest expense over the life of the 10-year
debt.  An insignificant amount was reclassified from OCI to interest
expense subsequent to the debt issuance.  At June 30, 2008, KCP&L
had $37.9 million recorded in accumulated OCI for the T-Locks.
  In 2006,
Great Plains Energy entered into a T-Lock to hedge against interest rate
fluctuations on an anticipated $100.0 million 10-year long-term debt
issuance.  In the first quarter of 2007, Great Plains Energy allowed
the T-Lock to expire while the terms of the debt offering were re-evaluated and
the resulting $0.1 million loss was recorded to interest expense as cash flow
ineffectiveness.
  Commodity
Risk Management
 KCP&L’s
risk management policy is to use derivative instruments to mitigate its exposure
to market price fluctuations on a portion of its projected natural gas purchases
to meet generation requirements for retail and firm wholesale
sales.  At June 30, 2008, KCP&L had hedged 51% and 4% of its 2008
and 2009, respectively, projected natural gas usage for retail load and firm MWh
sales, primarily by utilizing fixed forward physical contracts and financial
instruments.  The fair values of these instruments are recorded as
current assets or current liabilities with an offsetting entry to OCI for the
effective portion of the hedge.  To the extent the hedges are not
effective, the ineffective portion of the change in fair market value is
recorded currently in fuel expense.
 49
 The
notional and recorded fair values of the companies’ open positions for
derivative instruments are summarized in the following table.  The
fair values of these derivatives are recorded on the consolidated balance
sheets.
 June
      30
                
                December
      312008
                
                2007Notional
                
                
                NotionalContract
                Fair
                
                Contract
                FairAmount
                Value
                
                Amount
                ValueGreat
      Plains Energy
                (millions)Swap
      contractsCash
      flow hedges
                $
                5.9
                
                $
                4.0
                
                $
                5.5
                
                $
                0.7Forward
      contractsCash
      flow hedges
                
                1.3
                
                
                0.8
                
                
                1.4
                
                
                -Anticipated
      debt issuanceForward
      starting swap
                
                250.0
                
                
                (28.4
                )
                
                -
                
                
                -Treasury
      lock
                
                -
                
                
                -
                
                
                350.0
                
                
                (28.0
                )Non-hedging
      derivatives
                
                -
                
                
                -
                
                
                250.0
                
                
                (16.4
                )KCP&LSwap
      contractsCash
      flow hedges
                
                5.9
                
                
                4.0
                
                
                5.5
                
                
                0.7Forward
      contractsCash
      flow hedges
                
                1.3
                
                
                0.8
                
                
                1.4
                
                
                -Anticipated
      debt issuanceTreasury
      lock
                
                -
                
                
                -
                
                
                350.0
                
                
                (28.0
                )
 The
amounts recorded in accumulated OCI related to the cash flow hedges are
summarized in the following table.
 Great
      Plains Energy
                KCP&LJune
      30
                December
      31
                June
      30
                December
      312008
                2007
                2008
                2007(millions)Current
      assets
                $
                18.2
                
                $
                14.6
                
                $
                18.2
                
                $
                14.6Current
      liabilities
                
                (44.9
                )
                
                (31.0
                )
                
                (38.0
                )
                
                (26.6
                )Deferred
      income taxes
                
                10.4
                
                
                6.2
                
                
                7.7
                
                
                4.5Assets
      of discontinued operations
                
                -
                
                
                31.0
                
                
                -
                
                
                -Liabilities
      of discontinued operations
                
                -
                
                
                (16.9
                )
                
                -
                
                
                -Deferred
      income taxes, included in assetsand
      liabilities of discontinued operations
                
                -
                
                
                (5.8
                )
                
                -
                
                
                -Total
                $
                (16.3
                )
                $
                (1.9
                )
                $
                (12.1
                )
                $
                (7.5
                )
 Great
Plains Energy’s accumulated OCI in the table above at June 30, 2008, includes
$0.4 million that is expected to be reclassified to expenses over the next
twelve months.  KCP&L’s accumulated OCI includes $0.9 million that
is expected to be reclassified to expense over the next twelve
months.
 50
 The
amounts reclassified to expenses are summarized in the following
table.
 Three
      Months Ended
                
                Year
      to DateJune
      30
                
                June
      302008
                
                2007
                
                2008
                
                2007Great
      Plains Energy
                (millions)Interest
      expense
                $
                0.9
                
                $
                (0.1
                )
                $
                1.0
                
                $
                (0.2
                )Income
      taxes
                
                (0.2
                )
                
                -
                
                
                (0.3
                )
                
                0.1Income
      (loss) from discontinued operationsPurchased
      power expense
                
                (110.2
                )
                
                16.4
                
                
                (106.1
                )
                
                38.3Income
      taxes
                
                45.5
                
                
                (6.6
                )
                
                43.8
                
                
                (15.6
                )OCI
                $
                (64.0
                )
                $
                9.7
                
                $
                (61.6
                )
                $
                22.6KCP&LInterest
      expense
                $
                0.8
                
                $
                (0.1
                )
                $
                0.8
                
                $
                (0.2
                )Income
      taxes
                
                (0.2
                )
                
                -
                
                
                (0.2
                )
                
                0.1OCI
                $
                0.6
                
                $
                (0.1
                )
                $
                0.6
                
                $
                (0.1
                )
 18.
                FAIR
      VALUE MEASUREMENTS
  Great
Plains Energy and KCP&L adopted SFAS No. 157, “Fair Value Measurements”
effective January 1, 2008.  This statement defines fair value,
establishes a framework for measuring fair value in Generally Accepted
Accounting Principles (GAAP) and expands disclosures about fair value
measurements.  The statement does not require any new fair value
measurements but provides guidance on how to measure fair value when
required.  SFAS No. 157 also emphasizes that fair value is a
market-based measurement, not an entity-specific measurement, and sets out a
fair value hierarchy with the highest priority being quoted prices in active
markets.
  SFAS No.
157 defines fair value as the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market
participants at the measurement date.  SFAS No. 157 establishes a fair
value hierarchy, which prioritizes the inputs to valuation techniques used to
measure fair value into three broad categories, giving the highest priority to
quoted prices in active markets for identical assets or liabilities and lowest
priority to unobservable inputs.  A definition of the various levels,
as well as discussion of the various Company measurements within the levels is
as follows:
  Level 1 –
Unadjusted quoted prices for identical assets or liabilities in active markets
that the Company has access to at the measurement date.  Assets
categorized within this level consist of equity and certain U.S. Treasury
securities that are actively traded within KCP&L’s decommissioning trust
fund.
  Level 2 –
Market-based inputs for assets or liabilities that are observable (either
directly or indirectly) or inputs that are not observable but are corroborated
by market data.  Assets and liabilities categorized within this level
consist of KCP&L’s and Great Plains Energy’s various non-exchange traded
derivative instruments traded in over-the-counter markets and debt securities
and certain U.S. Agency securities within KCP&L’s decommissioning trust
fund.
  Level 3 –
Unobservable inputs, reflecting the Company’s own assumptions about the
assumptions market participants would use in pricing the asset or
liability.  Assets categorized within this level consist of
mortgage-backed securities within KCP&L’s decommissioning trust fund for
which sufficiently observable market data is not available to corroborate the
valuation inputs.
 51
 The
following table includes Great Plains Energy’s and KCP&L’s balances of
financial assets and liabilities measured at fair value on a recurring basis at
June 30, 2008.
 Fair
      Value Measurements UsingJune
      30
                Quoted
      Prices in Active Markets for Identical Assets
                
                Significant
      Other Observable Inputs
                
                Significant
      Unobservable InputsDescription
                2008
                (Level
      1)
                
                (Level
      2)
                
                (Level
      3)KCP&L
                
                (millions)AssetsDerivative
      instruments (a)
                $
                4.8
                
                
                $
                -
                
                
                $
                4.8
                
                
                $
                -Nuclear
      decommissioning trust (b)
                
                104.7
                
                
                
                59.5
                
                
                
                36.3
                
                
                
                8.9Total
                
                $
                109.5
                
                
                $
                59.5
                
                
                $
                41.1
                
                
                $
                8.9Other
      Great Plains EnergyLiabilitiesDerivative
      instruments (a)
                
                28.4
                
                
                
                -
                
                
                
                28.4
                
                
                
                -Total
                
                $
                28.4
                
                
                $
                -
                
                
                $
                28.4
                
                
                $
                -Great
      Plains EnergyAssetsDerivative
      instruments (a)
                $
                4.8
                
                
                $
                -
                
                
                $
                4.8
                
                
                $
                -Nuclear
      decommissioning trust (b)
                
                104.7
                
                
                
                59.5
                
                
                
                36.3
                
                
                
                8.9Total
                
                
                109.5
                
                
                
                59.5
                
                
                
                41.1
                
                
                
                8.9LiabilitiesDerivative
      instruments (a)
                
                28.4
                
                
                
                -
                
                
                
                28.4
                
                
                
                -Total
                
                $
                28.4
                
                
                $
                -
                
                
                $
                28.4
                
                
                $
                -(a)The
      fair value of derivative instruments is estimated using market quotes, net
      of estimated credit risk. Uponadoption of SFAS No. 157, the Company's own credit risk has been
      incorporated into the valuation ofderivative liabilities. This had no impact to Great Plains Energy or
      KCP&L.(b)Fair
      value is based on quoted market prices of the investments held by the
      fund.
 52
 The
following tables reconcile the beginning and ending balances for all level 3
assets and liabilities, net measured at fair value on a recurring basis for the
three months ended and year to date June 30, 2008.
 Fair
      Value Measurements Using Significant Unobservable Inputs (Level
      3)OtherGreat
                GreatPlains
                PlainsKCP&L
                Energy
                EnergyNuclearDecommissioning
                DerivativeDescription
                Trust
                Instruments
                Total(millions)Balance
      April 1, 2008
                $
                6.0
                
                $
                93.0
                
                $
                99.0Total
      realized/unrealized gains or (losses)Included
      in regulatory liability
                
                (0.1
                )
                
                -
                
                
                (0.1
                )Purchase,
      issuances, and settlements
                
                (0.7
                )
                
                -
                
                
                (0.7
                )Transfers
      in and/or out of Level 3
                
                3.7
                
                
                -
                
                
                3.7Discontinued
      operations
                
                -
                
                
                (93.0
                )
                
                (93.0
                )Balance
      June 30, 2008
                $
                8.9
                
                $
                -
                
                $
                8.9
 Fair
      Value Measurements Using Significant Unobservable Inputs (Level
      3)OtherGreat
                GreatPlains
                PlainsKCP&L
                Energy
                EnergyNuclearDecommissioning
                DerivativeDescription
                Trust
                Instruments
                Total(millions)Balance
      January 1, 2008
                $
                6.5
                
                $
                22.4
                
                $
                28.9Total
      realized/unrealized gains or (losses)Included
      in regulatory liability
                
                (0.2
                )
                
                -
                
                
                (0.2
                )Purchase,
      issuances, and settlements
                
                (1.1
                )
                
                -
                
                
                (1.1
                )Transfers
      in and/or out of Level 3
                
                3.7
                
                
                (16.4
                )
                
                (12.7
                )Discontinued
      operations
                
                -
                
                
                (6.0
                )
                
                (6.0
                )Balance
      June 30, 2008
                $
                8.9
                
                $
                -
                
                $
                8.9
 KCP&L’s
level 3 activity consists of mortgage-backed securities held by KCP&L’s
decommissioning trust fund.  Other Great Plains Energy’s level 3
activity consisted almost entirely of forward physical energy purchases and
other derivative instruments held by Strategic Energy.  Strategic
Energy was sold on June 2, 2008.
  SFAS No.
157 is not yet effective for the Company’s nonfinancial assets and liabilities
measured at fair value on a nonrecurring basis, such as AROs, reporting units
and long-lived asset groups measured at fair value for impairment testing,
nonfinancial assets and liabilities measured at fair value in a business
combination and not measured at fair value in subsequent periods.  The
effective date for these measurements has been delayed by Financial Accounting
Standards Board (FASB) Staff Position (FSP) SFAS No. 157-2, “Effective Date of
FASB Statement No. 157,” to January 1, 2009, and interim periods within that
fiscal year.  Management is currently evaluating the impact of
adoption to those nonfinancial assets and liabilities delayed by FSP FAS No.
157-2 and has not yet determined the impact on Great Plains Energy's and
KCP&L's financial statements.
 53
 In
January 2008, the FASB proposed FSP SFAS No. 157-c, “Measuring Liabilities under
FASB Statement No. 157” to amend the standard to clarify the principles on fair
value measurement of liabilities.  Management is currently evaluating
the impact of the proposed FSP with a final FSP expected in the third quarter of
2008.
  19.
                NEW
      ACCOUNTING STANDARDS
  SFAS
No. 141(R)
 In
December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business
Combinations.”  This statement significantly changes how business
combinations are accounted for in current practice.  Changes to
current practice include, among other things, requiring all assets acquired and
liabilities assumed in a business combination to be measured at fair value in
accordance with SFAS No. 157 as of the acquisition date, an acquirer to expense
transaction costs and equity securities issued as consideration in a business
combination be recorded at fair value as of the acquisition date.  The
provisions of this statement are effective for Great Plains Energy and KCP&L
prospectively for business combinations occurring on or after January 1, 2009,
except it requires the prospective application of the provisions related to
income taxes to business combinations occurring in 2008.  As SFAS No.
141(R) provisions related to income taxes are effective for the Aquila
acquisition, any adjustments to Aquila’s deferred tax assets and uncertain tax
position balances that occur after the measurement period, which is limited to a
maximum of one year from the acquisition date, will be recorded as a component
of income tax expense as required by the standard.
  ITEM
2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
  The
MD&A that follows is a combined presentation for Great Plains Energy and
KCP&L, both registrants under this filing.  The discussion and
analysis by management focuses on those factors that had a material effect on
the financial condition and results of operations of the registrants during the
periods presented.
  EXECUTIVE
SUMMARY
  Description
of Business
 Great
Plains Energy is a public utility holding company and does not own or operate
any significant assets other than the stock of its
subsidiaries.  Great Plains Energy’s direct subsidiaries with
operations or active subsidiaries are KCP&L, KLT Inc., IEC and
Services.  In July 2008, IEC was merged into KLT Inc.  On
July 14, 2008, Great Plains Energy closed its acquisition of
Aquila.  See Note 2 to the consolidated financial statements for
additional information.  Great Plains Energy’s and KCP&L’s sole
reportable business segment is KCP&L for the periods presented.
  KCP&L
 KCP&L
is an integrated, regulated electric utility that engages in the generation,
transmission, distribution and sale of electricity.  KCP&L has
over 4,000 MWs of generating capacity and has transmission and distribution
facilities that provide electricity to approximately 509,000 customers in the
states of Missouri and Kansas.  KCP&L is currently experiencing
load growth that is less than historically experienced as a result of the
slowing economy.  Load growth consists of higher usage per customer
and the addition of new customers.  KCP&L’s retail electricity
rates are below the national average.
  Earnings
Overview
 Great
Plains Energy had a loss of $5.4 million, or $0.06 per share for the three
months ended June 30, 2008, including a loss of $18.2 million or $0.21 per share
from the discontinued operations of Strategic Energy.  For the same
period in 2007, earnings were $25.1 million, or $0.29 per share, including a
loss of $6.8 million or $0.08 per share from the discontinued operations of
Strategic Energy.  Compared to the second quarter a year ago, earnings
in the second quarter of 2008 were reduced by higher purchased power expense,
unfavorable weather, increased
 54
 depreciation
and amortization expense, increased income taxes and lower wholesale
sales.  These impacts were partially offset by new retail rates
effective January 1, 2008.
  Great
Plains Energy’s earnings year to date June 30, 2008, were $41.7 million, or
$0.49 per share, including income from discontinued operations of $34.7 million
or $0.40 per share.  For the same period in 2007, earnings were $48.1
million, or $0.57 per share, including income from discontinued operations of
$20.3 million or $0.24 per share.  Earnings year to date June 30,
2008, compared to the same period in 2007 were reduced by higher purchased power
expense, increased depreciation and amortization expense and increased income
taxes.  These impacts were partially offset by new retail rates
effective January 1, 2008.
  STRATEGIC
FOCUS
  Aquila
Acquisition
 On July
14, 2008, Great Plains Energy closed its acquisition of Aquila and Aquila is now
doing business as KCP&L Great Missouri Operations Company (KCP&L
GMO).  Under the terms of the agreement, prior Aquila shareholders
received $1.80 in cash plus 0.0856 of a share of Great Plains Energy common
stock for each share of Aquila common stock.  The total purchase price
of the acquisition was approximately $1.7 billion.  Immediately prior
to Great Plains Energy’s acquisition of Aquila, Black Hills acquired Aquila’s
electric utility assets in Colorado and its gas utility assets in Colorado,
Kansas, Nebraska and Iowa.  See Note 2 to the consolidated financial
statements for additional information.
  KCP&L’s
Comprehensive Energy Plan
 In the
second quarter of 2008, KCP&L completed a cost and schedule update for the
Iatan No. 1 environmental project and the Iatan No. 2 coal plant construction
project.  This updated assessment was driven by several factors,
including (a) the combined projects reaching a milestone of 70% - 75% of the
engineering work completed; (b) the integration of the Iatan No. 2 balance of
plant schedule and quantity estimates into the master schedule and budget; and
(c) continued challenging construction market trends, including rapidly
escalating costs for construction materials and services, the level of global
investment in power production facilities, the decline in the value of the U.S.
dollar, and constrained labor availability.
  The
results of this update were as follows:
  ·
                Based
      on the top end of the new estimate ranges, the combined increase in
      projected costs of the Iatan No. 1 environmental project and the new Iatan
      No. 2 unit is approximately 19%.
  ·
                Compared
      to the previous estimate of $837 million - $914 million provided in the
      2006 Form 10-K, KCP&L’s approximate 55% share of the total projected
      cost of Iatan No. 2 has increased to a range of $994 million - $1.051
      billion, with the top end of the range representing a 15%
      increase.  KCP&L GMO owns 18% of this
    project.
  ·
                The
      anticipated in-service date for Iatan No. 2 continues to be the summer of
      2010.
  ·
                KCP&L’s
      70% share of the projected cost of the Iatan No. 1 environmental project
      has increased to a range of $330 million - $350 million.  This
      represents an increase of 33% compared to the top end of the previous
      range estimate of $255 million - $264 million for Iatan No. 1 included in
      the total amount for Environmental Retrofit Projects in KCP&L’s
      Comprehensive Energy Plan of $423 million - $443 million provided in the
      2006 Form 10-K.  KCP&L GMO owns 18% of this
      project.
  ·
                The
      in-service date for the Iatan No. 1 environmental project is now expected
      to be February 2009 compared to the previous estimate of year-end
      2008.
  In the
Collaboration Agreement among KCP&L, the Sierra Club and the Concerned
Citizens of Platte County, KCP&L agreed to use its best efforts to install
emission control technologies to reduce emissions from the LaCygne Station prior
to the required compliance date under EPA BART, but in no event later than June
1, 2015.
 55
 KCP&L
further agreed to issue requests for proposal for the equipment required to
comply with BART by December 31, 2008, requesting that construction commence by
December 31, 2010.  KCP&L’s Comprehensive Energy
Plan includes a project to install the required emission control technologies at
LaCygne No. 1 for completion in 2009.  Demand for environmental
equipment has increased substantially leading to extremely long lead times for
equipment.  As a result, the LaCygne No. 1 project will not be
completed in 2009.  Since KCP&L must also install such emission
control technologies at LaCygne No. 2, management is evaluating the possibility
of combining the required environmental upgrades for both LaCygne Nos. 1 and 2
into one project, but that determination has not yet been made.
  KCP&L
agreed in the Collaboration Agreement to pursue increasing its wind generation
capacity by 100MW by the end of 2010.  KCP&L has entered into
agreements to acquire 100MW of wind generation for approximately $215
million.  The agreements are terminable by KCP&L in the event it
does not receive certain regulatory assurances.  Also in the
Collaboration Agreement, KCP&L agreed to pursue an additional 300MW of wind
generation capacity by the end of 2012, all subject to regulatory
approval.
  The asset
management and customer programs included in KCP&L’s Comprehensive Energy
Plan are progressing on target.
  Discontinued
Operations – Sale of Strategic Energy
 In 2007,
Great Plains Energy retained a financial advisor to assist in a review of
strategic and structural alternatives for its Strategic Energy
subsidiary.  In April 2008, the Board of Directors approved
management’s recommendation to sell Strategic Energy and Great Plains Energy
entered into an agreement with Direct Energy Services, LLC (Direct Energy), a
subsidiary of Centrica plc, under which Direct Energy acquired all of Great
Plains Energy’s interest in Strategic Energy.  On June 2, 2008, Great
Plains Energy completed the sale of Strategic Energy.  In accordance
with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived
Assets,” Strategic Energy is reported as discontinued operations for the periods
presented.  See Note 11 to the consolidated financial statements for
additional information.
  REGULATORY
PROCEEDINGS
  KCP&L
anticipates filing requests for annual rate increases with the MPSC and KCC in
the third quarter of 2008 which will be designed to include the Iatan No. 1
environmental project in rate base and recover overall increased costs of
service.  KCP&L GMO anticipates filing requests for annual rate
increases with the MPSC in the third quarter of 2008 which will be designed to
include the Iatan No. 1 environmental project and other capital additions in
rate base and recover overall increased costs of service.
  RELATED
PARTY TRANSACTIONS
  See Note
12 to the consolidated financial statements for information regarding related
party transactions.
 56
 GREAT
PLAINS ENERGY RESULTS OF OPERATIONS
  The
following table summarizes Great Plains Energy’s comparative results of
operations.
 Three
      Months Ended
                  Year
      to DateJune
      30
                  June
      302008
                  2007
                  2008
                  2007(millions)Operating
      revenues
                  $
                  335.0
                  
                  $
                  319.1
                  
                  $
                  632.6
                  
                  $
                  574.8Fuel
                  
                  (58.3
                  )
                  
                  (57.9
                  )
                  
                  (113.0
                  )
                  
                  (110.6
                  )Purchased
      power
                  
                  (38.2
                  )
                  
                  (22.7
                  )
                  
                  (69.0
                  )
                  
                  (39.1
                  )Other
      operating expenses
                  
                  (135.9
                  )
                  
                  (129.6
                  )
                  
                  (278.7
                  )
                  
                  (263.5
                  )Depreciation
      and amortization
                  
                  (50.8
                  )
                  
                  (43.8
                  )
                  
                  (101.0
                  )
                  
                  (86.8
                  )Loss
      on property
                  
                  (0.2
                  )
                  
                  -
                  
                  
                  (0.2
                  )
                  
                  -Operating
      income
                  
                  51.6
                  
                  
                  65.1
                  
                  
                  70.7
                  
                  
                  74.8Non-operating
      income and expenses
                  
                  4.4
                  
                  
                  0.3
                  
                  
                  12.4
                  
                  
                  1.5Interest
      charges
                  
                  (10.4
                  )
                  
                  (17.5
                  )
                  
                  (52.0
                  )
                  
                  (38.6
                  )Income
      taxes
                  
                  (32.0
                  )
                  
                  (15.2
                  )
                  
                  (22.5
                  )
                  
                  (8.3
                  )Loss
      from equity investments
                  
                  (0.4
                  )
                  
                  (0.3
                  )
                  
                  (0.8
                  )
                  
                  (0.7
                  )Income
      from continuing operations
                  
                  13.2
                  
                  
                  32.4
                  
                  
                  7.8
                  
                  
                  28.7Income
      (loss) from discontinued operations
                  
                  (18.2
                  )
                  
                  (6.8
                  )
                  
                  34.7
                  
                  
                  20.3Net
      income (loss)
                  
                  (5.0
                  )
                  
                  25.6
                  
                  
                  42.5
                  
                  
                  49.0Preferred
      dividends
                  
                  (0.4
                  )
                  
                  (0.5
                  )
                  
                  (0.8
                  )
                  
                  (0.9
                  )Earnings
      (loss) available for common shareholders
                  $
                  (5.4
                  )
                  $
                  25.1
                  
                  $
                  41.7
                  
                  $
                  48.1
 Three
Months Ended June 30, 2008 Compared to June 30, 2007
 Great
Plains Energy’s earnings available for common shareholders for the three months
ended June 30, 2008, decreased to a loss of $5.4 million, or $0.06 per share
from earnings of $25.1 million, or $0.29 per share, for the same period in
2007.
  KCP&L’s
net income decreased $28.6 million for the three months ended June 30, 2008,
compared to the same period in 2007 due to higher purchased power expense
resulting from higher prices and plant outages, increased depreciation and
amortization expense and increased income taxes primarily due to an increase in
deferred tax balances as a result of an increase in the composite tax rate
reflecting the sale of Strategic Energy.  These factors more than
offset increased revenues due to new retail rates.
  Great
Plains Energy’s other non-regulated activities recognized net income of $4.9
million for the three months ended June 30, 2008, compared to a loss of $4.6
million for the same period in 2007 primarily attributable to an $8.0 million
after-tax gain for the change in fair value of interest rate hedges entered into
by Great Plains Energy during 2007 and a $4.5 million net favorable impact from
the deferral to a regulatory asset of $10.0 million of merger transition
non-labor costs pursuant to the KCC order approving the Aquila acquisition
partially offset by $5.5 million of transition costs.  These increases
were partially offset by $1.8 million of interest expense related to Great
Plains Energy’s $100.0 million Senior Notes issued in September
2007.
  Year
to Date June 30, 2008 Compared to June 30, 2007
 Great
Plains Energy’s earnings available for common shareholders year to date June 30,
2008, decreased to $41.7 million, or $0.49 per share from $48.1 million, or
$0.57 per share, for the same period in 2007.
  KCP&L’s
net income decreased $13.6 million year to date June 30, 2008, compared to the
same period in 2007 due to increased income taxes primarily from an increase in
deferred tax balances as a result of an increase in the
 57
 composite
tax rate.  Additionally, higher purchased power expense due to higher
prices and plant outages and increased depreciation and amortization expense
offset by increased revenues due to new retail rates and litigation settlement
proceeds also impacted year to date results.
  Great
Plains Energy’s other non-regulated activities recognized an additional $7.2
million loss year to date June 30, 2008, compared to the same period in 2007,
primarily attributable to overall higher expenses at the holding
company.  These higher expenses include $2.6 million of transition
costs related to the acquisition of Aquila, net of a $10.0 million deferral to a
regulatory asset in the second quarter of 2008, a $5.7 million after-tax loss
for the change in fair value of interest rate hedges entered into by Great
Plains Energy during 2007 and $3.6 million of interest expense related to Great
Plains Energy’s $100.0 million Senior Notes issued in September
2007.  These higher expenses were partially offset by $3.4 million of
after-tax income related to the release of a legal reserve described in Note 14
to the consolidated financial statements.
  KCP&L
RESULTS OF OPERATIONS
  The
following discussion of KCP&L results of operations includes KCP&L, an
integrated, regulated electric utility and for 2007 includes HSS, formerly an
unregulated subsidiary of KCP&L, which was transferred from KCP&L to KLT
Inc. on January 2, 2008.  In the discussion that follows, references
to KCP&L reflect only the operations of the utility.
  KCP&L’s
residential customers’ usage is significantly affected by
weather.  Bulk power sales, the major component of wholesale sales,
vary with system requirements, generating unit and purchased power availability,
fuel costs and requirements of other electric systems.  Missouri and
Kansas jurisdictional retail revenues annually average 57% and 43%,
respectively.  Missouri retail rates reflect a set level of non-firm
wholesale electric sales margin.  KCP&L will not recover any
shortfall in non-firm wholesale electric sales margin, but any amount above the
level reflected in Missouri retail rates will be returned to retail customers in
a future rate case.
  Prior to
January 1, 2008, less than 1% of KCP&L’s rates contained an automatic fuel
adjustment clause.  New Kansas retail rates effective January 1, 2008,
contain an Energy Cost Adjustment (ECA) tariff.  The ECA tariff
reflects the projected annual amount of fuel, purchased power, emission
allowances, transmission costs and asset-based off-system sales
margin.  These projected amounts are subject to quarterly
re-forecasts.  Any difference between the ECA revenue collected and
the actual ECA amounts for a given year (which may be positive or negative) is
recorded as an increase to or reduction of retail revenues and deferred as a
regulatory asset or liability to be recovered from or refunded to Kansas retail
customers over twelve months beginning April 1 of the succeeding
year.  KCP&L’s Missouri retail rates do not contain a similar
adjustment mechanism, meaning that changes in costs will not be reflected in
rates until new rates are authorized by the MPSC.  This regulatory lag
between the time costs change and when they are reflected in rates applies to
all costs, other than those included in the Kansas ECA.  In a rising
cost environment, such as exists currently, regulatory lag may have an adverse
impact on Great Plains Energy’s and KCP&L’s results of
operations.
  Generation
fuel mix can substantially change the fuel cost per MWh
generated.  Generation fuel mix can be significantly impacted by
planned and unplanned plant outages.  Nuclear fuel cost per MWh
generated is substantially less than the cost of coal per MWh generated, which
is significantly lower than the cost of natural gas and oil per MWh
generated.  The cost per MWh for purchased power is generally
significantly higher than the cost per MWh of coal and nuclear
generation.  KCP&L continually evaluates its system requirements,
the availability of generating units, its demand-side management and efficiency
programs, availability and cost of fuel supply and purchased power, and the
requirements of other electric systems to provide reliable power
economically.
 58
  The
following table summarizes KCP&L's comparative results of
operations.
 Three
      Months Ended
                  Year
      to DateJune
      30
                  June
      302008
                  2007
                  2008
                  2007(millions)Operating
      revenues
                  $
                  335.0
                  
                  $
                  319.1
                  
                  $
                  632.6
                  
                  $
                  574.8Fuel
                  
                  (58.3
                  )
                  
                  (57.9
                  )
                  
                  (113.0
                  )
                  
                  (110.6
                  )Purchased
      power
                  
                  (38.2
                  )
                  
                  (22.7
                  )
                  
                  (69.0
                  )
                  
                  (39.1
                  )Other
      operating expenses
                  
                  (135.0
                  )
                  
                  (124.6
                  )
                  
                  (267.5
                  )
                  
                  (255.1
                  )Depreciation
      and amortization
                  
                  (50.8
                  )
                  
                  (43.8
                  )
                  
                  (101.0
                  )
                  
                  (86.8
                  )Loss
      on property
                  
                  (0.2
                  )
                  
                  -
                  
                  
                  (0.2
                  )
                  
                  -Operating
      income
                  
                  52.5
                  
                  
                  70.1
                  
                  
                  81.9
                  
                  
                  83.2Non-operating
      income and expenses
                  
                  4.3
                  
                  
                  0.2
                  
                  
                  6.5
                  
                  
                  2.4Interest
      charges
                  
                  (19.9
                  )
                  
                  (16.7
                  )
                  
                  (36.7
                  )
                  
                  (34.9
                  )Income
      taxes
                  
                  (29.0
                  )
                  
                  (17.1
                  )
                  
                  (26.8
                  )
                  
                  (12.2
                  )Net
      income
                  $
                  7.9
                  
                  $
                  36.5
                  
                  $
                  24.9
                  
                  $
                  38.5
 KCP&L
Sales Revenues and MWh Sales
 Three
      Months Ended
                  
                  
                  Year
      to DateJune
      30
                  %
                  June
      30
                  
                  %2008
                  2007
                  Change
                  2008
                  2007
                  
                  ChangeRetail
      revenues
                  (millions)
                  
                  
                  (millions)Residential
                  $
                  105.0
                  
                  $
                  102.1
                  
                  
                  3
                  
                  $
                  205.4
                  
                  $
                  188.8
                  
                  
                  
                  9Commercial
                  
                  131.4
                  
                  
                  124.3
                  
                  
                  6
                  
                  
                  243.5
                  
                  
                  228.3
                  
                  
                  
                  7Industrial
                  
                  29.4
                  
                  
                  28.0
                  
                  
                  5
                  
                  
                  53.7
                  
                  
                  51.7
                  
                  
                  
                  4Other
      retail revenues
                  
                  2.7
                  
                  
                  2.4
                  
                  
                  12
                  
                  
                  5.1
                  
                  
                  4.9
                  
                  
                  
                  5Kansas
      ECA under recovery
                  
                  7.8
                  
                  
                  -
                  
                  NA
                  
                  
                  17.3
                  
                  
                  -
                  
                  
                  NATotal
      retail
                  
                  276.3
                  
                  
                  256.8
                  
                  
                  8
                  
                  
                  525.0
                  
                  
                  473.7
                  
                  
                  
                  11Wholesale
      revenues
                  
                  54.7
                  
                  
                  58.5
                  
                  
                  (6
                  )
                  
                  97.8
                  
                  
                  92.7
                  
                  
                  
                  6Other
      revenues
                  
                  4.0
                  
                  
                  3.8
                  
                  
                  2
                  
                  
                  9.8
                  
                  
                  8.4
                  
                  
                  
                  15KCP&L
      revenues
                  $
                  335.0
                  
                  $
                  319.1
                  
                  
                  5
                  
                  $
                  632.6
                  
                  $
                  574.8
                  
                  
                  
                  10
 Three
      Months Ended
                  
                  
                  Year
      to DateJune
      30
                  %
                  June
      30
                  
                  %2008
                  2007
                  Change
                  2008
                  2007
                  
                  ChangeRetail
      MWh sales
                  (thousands)
                  
                  
                  (thousands)Residential
                  
                  1,155
                  
                  
                  1,235
                  
                  
                  (7
                  )
                  
                  2,561
                  
                  
                  2,527
                  
                  
                  
                  1Commercial
                  
                  1,891
                  
                  
                  1,865
                  
                  
                  1
                  
                  
                  3,745
                  
                  
                  3,663
                  
                  
                  
                  2Industrial
                  
                  546
                  
                  
                  549
                  
                  
                  (1
                  )
                  
                  1,027
                  
                  
                  1,055
                  
                  
                  
                  (3
                  )Other
      retail MWh sales
                  
                  20
                  
                  
                  25
                  
                  
                  (9
                  )
                  
                  35
                  
                  
                  48
                  
                  
                  
                  (25
                  )Total
      retail
                  
                  3,612
                  
                  
                  3,674
                  
                  
                  (2
                  )
                  
                  7,368
                  
                  
                  7,293
                  
                  
                  
                  1Wholesale
      MWh sales
                  
                  1,140
                  
                  
                  1,362
                  
                  
                  (16
                  )
                  
                  2,083
                  
                  
                  2,248
                  
                  
                  
                  (7
                  )KCP&L
      electric MWh sales
                  
                  4,752
                  
                  
                  5,036
                  
                  
                  (6
                  )
                  
                  9,451
                  
                  
                  9,541
                  
                  
                  
                  (1
                  )
 59
 Retail
revenues increased $19.5 million for the three months ended and $51.3 million
year to date June 30, 2008, compared to the same periods in 2007 primarily due
to new retail rates effective January 1, 2008.  For the three months
ended June 30, 2008, the increase in retail revenues was partially offset by
unfavorable weather in 2008, with a 13% decrease in cooling degree
days.
  Wholesale
revenues decreased $3.8 million for the three months ended June 30, 2008,
compared to the same period in 2007 due to a 16% decrease in wholesale MWhs
sales as a result of a 9% decrease in MWhs generated due to plant
outages.  The decrease in wholesale revenues was partially offset by a
19% increase in the average market price per MWh to $51.43, primarily due to
higher natural gas prices.  Wholesale revenues increased $5.1 million
year to date June 30, 2008, compared to the same period in 2007 due to a 17%
increase in the average market price per MWh to $48.90, primarily due to higher
natural gas prices, partially offset by a 7% decrease in wholesale MWh
sales.
  KCP&L
Fuel and Purchased Power
 Three
      Months Ended
                  
                  
                  Year
      to DateJune
      30
                  %
                  June
      30
                  
                  %2008
                  2007
                  Change
                  2008
                  2007
                  
                  ChangeNet
      MWhs Generated by Fuel Type
                  (thousands)
                  
                  
                  (thousands)Coal
                  
                  3,718
                  
                  
                  3,440
                  
                  
                  8
                  
                  
                  7,035
                  
                  
                  6,597
                  
                  
                  
                  7Nuclear
                  
                  599
                  
                  
                  1,215
                  
                  
                  (51
                  )
                  
                  1,544
                  
                  
                  2,423
                  
                  
                  
                  (36
                  )Natural
      gas and oil
                  
                  29
                  
                  
                  190
                  
                  
                  (85
                  )
                  
                  54
                  
                  
                  244
                  
                  
                  
                  (78
                  )Wind
                  
                  111
                  
                  
                  64
                  
                  
                  75
                  
                  
                  215
                  
                  
                  137
                  
                  
                  
                  57Total
      Generation
                  
                  4,457
                  
                  
                  4,909
                  
                  
                  (9
                  )
                  
                  8,848
                  
                  
                  9,401
                  
                  
                  
                  (6
                  )
 KCP&L’s
coal base load equivalent availability factor for the three months ended and
year to date June 30, 2008, increased to 80% and 76%, respectively, from 74% and
72% for the same periods in 2007.
 
 KCP&L’s
nuclear unit, Wolf Creek, accounts for approximately 20% of KCP&L’s base
load capacity.  Wolf Creek’s latest refueling outage began on March
20, 2008, and there were several increases in work scope during the outage that
extended the restart until May 14, 2008.  A primary driver of the work
scope increases was modifications to piping systems associated with the
emergency core cooling systems.  As a result of the outage, the capacity
and availability factor for Wolf Creek decreased to 50% and 65%, respectively,
for the three months ended and year to date June 30, 2008, compared to 100% for
the same periods in 2007.
  Fuel
expense increased $0.4 million for the three months ended and $2.4 million year
to date June 30, 2008, compared to the same periods in 2007 primarily due to
higher coal and coal transportation costs mostly offset by decreased MWhs
generated and less natural gas in the fuel mix, which has a higher cost compared
to other fuel types.
  Purchased
power expense increased $15.5 million for the three months ended June 30, 2008,
compared to the same period in 2007 due to a 37% increase in the average price
per MWh as a result of higher natural gas prices.  Additionally, MWh
purchases increased 31% due to the impact of the extended Wolf Creek refueling
outage.  Purchased power expense increased $29.9 million year to date
June 30, 2008, compared to the same period in 2007 due to a 68% increase in MWh
purchases to support increased retail load and the impact of plant
outages.  Additionally, the average price per MWh increased
18%.  These year to date increases were partially offset by $6.5
million in recoveries from a litigation settlement regarding a 2005 transformer
failure.
 60
 KCP&L
Depreciation and Amortization
 KCP&L’s
depreciation and amortization costs increased $7.0 million for the three months
ended and $14.2 million year to date June 30, 2008, compared to the same periods
in 2007 due to additional amortization pursuant to rate case orders of $5.5
million for the three months ended and $10.9 million year to date June 30, 2008,
combined with normal depreciation activity for capital additions.
  KCP&L
Income Taxes
 KCP&L’s
income taxes increased $11.9 million for the three months ended June 30, 2008,
compared to the same period in 2007.  The increase was primarily due
to an increase in deferred tax balances of $20.3 million as a result of an
increase in the composite tax rate reflecting the sale of Strategic
Energy.  The impact of the composite tax rate change was partially
offset by lower pre-tax income and increased wind
credits.  KCP&L’s income tax expense increased $14.6 million year
to date June 30, 2008, compared to the same period in 2007 primarily due to an
increase in deferred tax balances of $20.3 million as a result of the composite
tax rate change, partially offset by increased wind credits and a $2.0 million
increase in the allocation of tax benefits from holding company
losses.  See Note 10 to the consolidated financial statements for a
reconciliation of effective income tax rates for the comparative
periods.
  GREAT
PLAINS ENERGY AND KCP&L SIGNIFICANT BALANCE SHEET CHANGES (June 30,
2008 compared to December 31, 2007)
  ·
                  Great
      Plains Energy’s and KCP&L’s fuel inventories increased $11.9 million
      primarily due to increased coal inventory quantities resulting from plant
      outages as well as increased coal and coal transportation
      costs.
  ·
                  Great
      Plains Energy’s and KCP&L’s refundable income taxes increased $29.1
      million and $39.2 million, respectively, reflecting $39.7 million of
      advanced coal credits recorded in the second quarter of
      2008.  See Note 10 to the consolidated financial statements for
      additional information on the advanced coal
  credits.
  ·
                  Great
      Plains Energy’s and KCP&L’s combined deferred income taxes – current
      assets increased $11.9 million and $11.5 million, respectively, reflecting
      $11.8 million of advanced coal credits recorded in the second quarter of
      2008.  See Note 10 to the consolidated financial statements for
      additional information on the advanced coal
  credits.
  ·
                  Great
      Plains Energy’s and KCP&L’s construction work in progress increased
      $270.3 million primarily due to a $263.6 million increase related to
      KCP&L’s Comprehensive Energy Plan, including $184.6 million related to
      the construction of Iatan No. 2 and $79.0 million for environmental
      upgrades.
  ·
                  Great
      Plains Energy’s other – deferred charges and other assets increased $16.9
      million due to $4.7 million of deferred costs associated with Great Plains
      Energy’s acquisition of Aquila and an increase at
      KCP&L.  KCP&L’s other – deferred charges and other
      assets increased $11.7 million primarily due to a $7.5 million long-term
      receivable related to the proceeds from KCP&L’s Series 2008 EIRR bonds
      issued in May 2008 that were deposited with a
  trustee.
  ·
                  Great
      Plains Energy’s notes payable decreased $42.0 million due to the repayment
      of short-term borrowings.
  ·
                  Great
      Plains Energy’s and KCP&L’s commercial paper decreased $172.9 million
      primarily due to the use of proceeds from the issuance of $350.0 million
      of unsecured Senior Notes at KCP&L offset by a $41.2 million payment
      to settle KCP&L’s T-Lock and additional borrowings to support
      expenditures related to the Comprehensive Energy
  Plan.
 61
 ·
                  Great
      Plains Energy’s and KCP&L’s accrued taxes increased $22.8 million and
      $17.4 million, respectively, primarily due to an increase in property tax
      accruals at KCP&L due to the timing of tax
  payments.
  ·
                  Great
      Plains Energy’s and KCP&L’s accrued interest increased $10.5 million
      and $9.6 million, respectively, primarily due to the issuance of
      KCP&L’s $350.0 million of 6.375% Senior Notes in March 2008 and to the
      timing of interest payments at
KCP&L.
  ·
                  Great
      Plains Energy’s derivative instruments – current liabilities decreased
      $16.0 million due to a decrease at KCP&L partially offset by a $12.0
      million increase in the fair value of Great Plains Energy’s
      FSS.  KCP&L’s derivative instruments – current liabilities
      decreased $28.0 million due to the settlement of a T-Lock simultaneously
      with the issuance of $350.0 million of 6.375% Senior Notes in March
      2008.
  ·
                  Great
      Plains Energy’s and KCP&L’s deferred investment tax credits increased
      $50.8 million due to recognition of $51.5 million of advanced coal
      credits.  See Note 10 to the consolidated financial statements
      for additional information on the advanced coal
  credits.
  ·
                  Great
      Plains Energy’s and KCP&L’s asset retirement obligations increased
      $17.9 million primarily due to changes in cost estimates and timing used
      in computing the present value of certain asbestos AROs.  See
      Note 15 to the consolidated financial statements for additional
      information.
  ·
                  Great
      Plains Energy’s and KCP&L’s regulatory liabilities decreased $23.8
      million primarily due to a reclassification to accumulated depreciation,
      consistent with ratemaking treatment, for the regulatory liability for
      additional Wolf Creek amortization (Missouri) of $14.6
      million.
  ·
                  Great
      Plains Energy’s other – deferred credits and other liabilities decreased
      $11.5 million primarily due to the payment against and release of the
      remaining legal reserve.
  ·
                  Great
      Plains Energy’s and KCP&L’s long-term debt increased $373.5 million
      and $373.4, respectively, million due to KCP&L’s issuance of $350.0
      million of 6.375% Senior Notes in March 2008 and $23.4 million of Series
      2008 EIRR bonds in May 2008.
  CAPITAL
REQUIREMENTS AND LIQUIDITY
  Great
Plains Energy operates through its subsidiaries and has no material assets other
than the stock of its subsidiaries.  Great Plains Energy’s ability to
make payments on its debt securities and its ability to pay dividends is
dependent on its receipt of dividends or other distributions from its
subsidiaries and proceeds from the issuance of its securities.
  Great
Plains Energy’s capital requirements are principally comprised of debt
maturities and KCP&L’s utility construction and other capital
expenditures.  These items as well as additional cash and capital
requirements for the companies are discussed below.
  On July
14, 2008, Great Plains Energy closed its acquisition of Aquila.  The
future capital requirements of KCP&L GMO will further increase Great Plains
Energy’s capital requirements.  KCP&L GMO expects to meet
day-to-day cash flow requirements with internally generated
funds.  See Note 2 to the consolidated financial statements for
additional information.
  Great
Plains Energy's liquid resources at June 30, 2008, consisted of $33.7 million of
cash and cash equivalents on hand, including $6.8 million at KCP&L, and
$795.2 million of unused bank lines of credit.  The unused lines
consisted of $395.2 million from KCP&L's revolving credit facility and
$400.0 million from Great Plains Energy's revolving credit
facility.  See Note 8 to the consolidated financial statements for
more information on these agreements.
 62
 KCP&L
currently expects to fund its Comprehensive Energy Plan from a combination of
internal and external sources including, but not limited to, contributions from
rate increases, capital contributions to KCP&L from Great Plains Energy's
security issuances and new short and long-term debt
financing.  KCP&L’s capital requirements are expected to be
substantial over the next several years.
  KCP&L
expects to meet day-to-day cash flow requirements including interest payments,
construction requirements (excluding its Comprehensive Energy Plan), dividends
to Great Plains Energy and pension benefit plan funding requirements, discussed
below, with internally generated funds.  KCP&L may not be able to
meet these requirements with internally generated funds because of the effect of
inflation on operating expenses, the level of MWh sales, regulatory actions,
compliance with environmental regulations and the availability of generating
units.  The funds Great Plains Energy and KCP&L need to retire
maturing debt will be provided from operations, the issuance of long and
short-term debt and/or the issuance of equity or equity-linked
instruments.  In addition, the Company may issue debt, equity and/or
equity-linked instruments to finance growth or take advantage of new
opportunities.
  Cash
Flows from Operating Activities
 Great
Plains Energy and KCP&L generated positive cash flows from operating
activities for the periods presented.  The timing of the Wolf Creek
outage affects the deferred refueling outage costs, deferred income taxes and
amortization of nuclear fuel.  Other changes in working capital
detailed in Note 3 to the consolidated financial statements also impacted
operating cash flows.  The individual components of working capital
vary with normal business cycles and operations.  Additionally,
KCP&L’s payment of $41.2 million to settle T-Locks upon the issuance of
$350.0 million of 6.375% Senior Notes impacted operating cash
flows.
  Cash
Flows from Investing Activities
 Great
Plains Energy’s and KCP&L’s cash used for investing activities varies with
the timing of utility capital expenditures and purchases of investments and
nonutility property.  Investing activities are offset by the proceeds
from the sale of properties and insurance recoveries.
  Great
Plains Energy’s and KCP&L’s utility capital expenditures increased $184.1
million year to date June 30, 2008, compared to the same period in 2007
primarily due to an increase in KCP&L’s cash utility expenditures
of  $156.0 million related to KCP&L’s Comprehensive Energy
Plan.
  On June
2, 2008, Great Plains Energy completed the sale of Strategic Energy and received
gross cash proceeds of $305.3 million.  At the time of the sale
Strategic Energy has $88.9 million of cash resulting in proceeds from sale of
Strategic Energy, net of cash sold of $216.4 million.
  Cash
Flows from Financing Activities
 Great
Plains Energy’s and KCP&L’s cash flows from financing activities year to
date June 30, 2008, reflect KCP&L’s issuance of $350.0 million of 6.375%
unsecured Senior Notes that mature in 2018, with the proceeds used to repay
short-term borrowings.  KCP&L has incurred additional short-term
borrowings year to date June 30, 2008, to support expenditures related to
Comprehensive Energy Plan projects.
  Great
Plains Energy’s cash flows from financing activities year to date June 30, 2007,
reflect KCP&L’s repayment and issuance of Senior Notes, an increase in
short-term borrowings and the $12.3 million settlement of an equity forward
contract at Great Plains Energy.  KCP&L’s financing activities
year to date June 30, 2007, reflect KCP&L’s repayment of its $225.0 million
6.00% Senior Notes at maturity, issuance, at a discount, of $250.0 million 5.85%
Senior Notes that mature in 2017 and an increase in short-term
borrowings.
  Financing
Authorization
 Under
stipulations with the MPSC and KCC, Great Plains Energy and KCP&L maintain
common equity at not less than 30% and 35%, respectively, of total
capitalization.  KCP&L’s long-term financing activities are
subject
 63
 to the
authorization of the MPSC.  In 2005, the MPSC authorized KCP&L to
issue up to $635.0 million of long-term debt and enter into interest rate
hedging instruments in connection with such debt through December 31,
2009.  In February 2008, KCP&L received authorization from the
MPSC to increase the $635.0 million authorization to $1.4 billion through
December 31, 2009.  KCP&L utilized $850.0 million of this amount
with the issuance of its 6.05% unsecured Senior Notes maturing in 2035, its
5.85% unsecured Senior Notes maturing in 2017 and its 6.375% unsecured Senior
Notes maturing in 2018, leaving $550.0 million of authorization
remaining.
  In
December 2007, FERC authorized KCP&L to have outstanding at any time up to a
total of $800.0 million in short-term debt instruments through December
2009.  The authorization is subject to four restrictions: (i) proceeds
of debt backed by utility assets must be used for utility purposes; (ii) if any
utility assets that secure authorized debt are divested or spun off, the debt
must follow the assets and also be divested or spun off; (iii) if any proceeds
of the authorized debt are used for non-utility purposes, the debt must follow
the non-utility assets (specifically, if the non-utility assets are divested or
spun off, then a proportionate share of the debt must follow the divested or
spun off non-utility assets); and (iv) if utility assets financed by the
authorized short-term debt are divested or spun off to another entity, a
proportionate share of the debt must also be divested or spun off.  At
June 30, 2008, there was $607.1 million available under this
authorization.
  Significant
Financing Activities
 KCP&L
has an effective shelf registration statement providing for the sale of
investment grade notes and general mortgage bonds that became effective in
January 2008.  There is currently $550.0 million of capacity under
this registration statement.  This is intended to preserve KCP&L’s
flexibility to access the debt capital markets.
  In 2007,
Great Plains Energy entered into three T-Locks with a notional amount of $350.0
million, to hedge against interest rate fluctuations on the U.S. Treasury rate
component on future issuances of long-term debt.  Following a change
in financing plans, Great Plains Energy assigned the T-Locks to
KCP&L.  In March 2008, KCP&L issued $350.0 million of 6.375%
unsecured Senior Notes, maturing in 2018.  KCP&L settled the
T-Locks simultaneously with the issuance of its $350.0 million 10-year long-term
debt and paid $41.2 million in cash for the settlement.
  In March
and April 2008, KCP&L remarketed several series of EIRR bonds that were
auction rate securities, i.e. the interest rates were periodically reset through
an auction process.
  In March
2008, KCP&L remarketed the following:
  ·
                  secured
      Series 1992 EIRR bonds maturing in 2017 totaling $31.0 million at a fixed
      rate of 5.25% through March 31,
2013,
  ·
                  secured
      Series 1993A EIRR bonds maturing in 2023 totaling $40.0 million at a fixed
      rate of 5.25% through March 31, 2013,
and
  ·
                  unsecured
      Series 2007B EIRR bonds maturing in 2035 totaling $73.2 million at a fixed
      rate of 5.375% through March 31,
2013.
  In April
2008, KCP&L remarketed the following:
  ·
                  secured
      Series 1993B EIRR bonds maturing in 2023 totaling $39.5 million at a fixed
      rate of 5.00% through March 31, 2011,
and
  ·
                  unsecured
      Series 2007A EIRR bonds maturing in 2035 into two series: Series 2007A-1
      totaling $63.3 million at a fixed rate of 5.125% through March 31, 2011
      and Series 2007A-2 totaling $10.0 million at a fixed rate of 5.00% through
      March 31, 2010.
  After
these remarketing activities, none of KCP&L’s EIRR bonds remain in auction
rate mode.
 64
 In May
2008, KCP&L’s Series 2008 EIRR bonds totaling $23.4 million maturing in 2038
were issued.  Proceeds of the bonds will be used to pay for a portion
of the costs at the Iatan Nos. 1 and 2 projects included in KCP&L’s
Comprehensive Energy Plan.  The proceeds were deposited with a
trustee, and will be used to reimburse KCP&L for qualifying
expenditures.  KCP&L recorded a $15.9 million short-term
receivable and a $7.5 million long-term receivable for the proceeds that were
deposited with the trustee.  The bonds have an initial long-term
interest rate of 4.90% until June 30, 2013.  At the end of the initial
long-term interest rate period, the bonds are subject to mandatory tender;
however, KCP&L is not obligated to pay the purchase price of the bonds on
the mandatory tender date.  If the bonds are not successfully
remarketed, the bonds will bear an interest at a daily rate equal to 10% per
annum until all the bonds are successfully remarketed.
  Debt
Agreements
 See Note
8 to the consolidated financial statements for discussion of Great Plains
Energy’s and KCP&L’s revolving credit facilities.
  Projected
Utility Capital Expenditures
 KCP&L’s
utility capital expenditures projected for the next three years, excluding
allowance for funds used during construction, are detailed in the following
table.
 2008
                  2009
                  2010Base
      utility construction expenditures
                  (millions)Generating
      facilities
                  $
                  79.1
                  
                  $
                  84.6
                  
                  $
                  103.8Distribution
      and transmission facilities
                  
                  101.0
                  
                  
                  89.2
                  
                  
                  101.3General
      facilities
                  
                  29.6
                  
                  
                  41.7
                  
                  
                  33.8Total
      base utility construction expenditures
                  
                  209.7
                  
                  
                  215.5
                  
                  
                  238.9Comprehensive
      Energy Plan capital expendituresIatan
      No. 2
                  
                  328.5
                  
                  
                  307.9
                  
                  
                  164.8Environmental
                  
                  151.8
                  
                  
                  120.4
                  
                  
                  68.9Customer
      programs & asset management
                  
                  18.5
                  
                  
                  17.4
                  
                  
                  11.0Total
      Comprehensive Energy Plan capital expenditures
                  
                  498.8
                  
                  
                  445.7
                  
                  
                  244.7Nuclear
      fuel
                  
                  16.0
                  
                  
                  17.5
                  
                  
                  32.0Other
      environmental
                  
                  3.0
                  
                  
                  34.8
                  
                  
                  100.1Total
      utility capital expenditures
                  $
                  727.5
                  
                  $
                  713.5
                  
                  $
                  615.7
 KCP&L’s
utility capital expenditure plan is subject to continual review and change and
includes utility capital expenditures related to KCP&L’s Comprehensive
Energy Plan for environmental investments and new capacity.
  KCP&L
GMO’s projected capital expenditures are approximately $780 million for the
remainder of 2008 through 2010.  This estimate is subject to continued
review and change.
  Pensions
 The
Company maintains defined benefit plans for substantially all employees of
KCP&L, Services and WCNOC and incurs significant costs in providing the
plans, with the majority incurred by KCP&L.  Funding of the plans
equals or exceeds the minimum requirements of the Employee Retirement Income
Security Act of 1974 (ERISA).
  Year to
date June 30, 2008, the Company contributed $15.1 million to the plans, all of
which was paid by KCP&L, and expects to contribute an additional $14.3
million in 2008 to satisfy the funding requirements of ERISA.  The
remaining contributions will be paid by KCP&L whom management believes has
adequate access to capital resources through cash flows from operations or
through existing lines of credit to support the funding
requirements.
 65
 Credit
Ratings
 On July
14, 2008, following the completion of Great Plains Energy’s acquisition of
Aquila, Standard & Poor’s affirmed Great Plains Energy’s credit ratings and
removed Great Plains Energy from CreditWatch with negative
implications.  Standard & Poor’s also affirmed KCP&L’s
long-term debt credit rating, raised the short-term corporate credit rating to
“A-2” from “A-3” and removed KCP&L from CreditWatch with negative
implications.  Standard & Poor’s also raised KCP&L GMO’s
corporate credit rating to “BBB” from “BB-”, its senior secured debt credit
rating to “BBB+” from “BB+” and its senior unsecured debt credit rating to “BBB”
from “BB-”.
  On July
15, 2008, following the completion of Great Plains Energy’s acquisition of
Aquila, Moody’s Investors Service affirmed all of its ratings of Great Plains
Energy and KCP&L, and raised KCP&L GMO’s senior unsecured rating to
“Baa2” from “Ba3”.  Moody’s assigned a negative rating outlook to all
three companies.
  The
ratings presented reflect the current views of these rating agencies and are
subject to change.  Great Plains Energy and KCP&L view maintenance
of strong credit ratings as extremely important and to that end an active and
ongoing dialogue is maintained with the agencies with respect to results of
operations, financial position and future prospects.  While a decrease
in these credit ratings would not cause any acceleration of Great Plains
Energy’s or KCP&L’s debt, it could increase interest charges under Great
Plains Energy’s 6.875% Senior Notes due 2017 and Great Plains Energy’s and
KCP&L’s revolving credit agreements.  A decrease in credit ratings
could also have an adverse impact on Great Plains Energy’s and KCP&L’s
access to capital, its cost of funds, the amounts of collateral required under
power supply agreements and Great Plains Energy’s ability to provide credit
support for its subsidiaries.
  The MPSC
approval of the Aquila acquisition is conditioned on the requirement that any
post-merger financial effects of a credit downgrade of Great Plains Energy,
KCP&L or KCP&L GMO occurring as a result of the acquisition would be
borne by shareholders and not utility customers.  The Company has
agreed to not seek rate recovery of KCP&L GMO interest costs in excess of
equivalent investment-grade debt.
  Supplemental
Capital Requirements and Liquidity Information
 The
following table updates selected items from Great Plains Energy’s and
KCP&L’s contractual commitments in the 2007 Form 10-K to reflect significant
changes.
 Remainder
      of2008
                  2009
                  2010
                  2011
                  2012
                  After
      2012
                  
                  Total(millions)Fuel
                  $
                  74.2
                  
                  $
                  105.1
                  
                  $
                  72.4
                  
                  $
                  12.4
                  
                  $
                  15.5
                  
                  $
                  195.2
                  
                  
                  $
                  474.8Comprehensive
      Energy Plan
                  
                  386.2
                  
                  
                  331.2
                  
                  
                  68.0
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  
                  785.4
 Fuel
commitments consist of commitments for nuclear fuel, coal, coal transportation
costs and natural gas.  Comprehensive Energy Plan represents
KCP&L’s contractual commitments for projects included in its Comprehensive
Energy Plan including jointly owned units.  KCP&L expects to be
reimbursed by other owners for their respective share of Iatan No. 2 and
environmental retrofit costs included in the Comprehensive Energy Plan
contractual commitments.
  Off-Balance
Sheet Arrangements
 In the
normal course of business, Great Plains Energy and certain of its subsidiaries
enter into various agreements providing financial or performance assurance to
third parties on behalf of certain subsidiaries.  Such agreements
include, for example, guarantees, stand-by letters of credit and surety
bonds.  These agreements are entered into primarily to support or
enhance the creditworthiness otherwise attributed to a subsidiary on a
stand-alone basis,
 66
 thereby
facilitating the extension of sufficient credit to accomplish the subsidiaries’
intended business purposes.  KCP&L’s guarantees were relatively
unchanged at June 30, 2008, compared to December 31, 2007.
  In July
2008, Great Plains Energy issued guaranties relating to approximately $1 billion
of KCP&L GMO’s outstanding long-term debt.  These guaranties
collectively cover substantially all of KCP&L GMO’s outstanding long-term
debt.  The guaranties provide Great Plains Energy’s unconditional
guaranty, as a primary obligor, of the payment and performance of KCP&L
GMO’s obligations.
  The
following KCP&L GMO credit facilities are guaranteed by Great Plains Energy
guaranties dated as of July 14, 2008.
  ·
                  $65
      million revolving line of credit dated April 22, 2005, with Union Bank of
      California, expiring April 22, 2009.  This facility is secured
      by the accounts receivable from KCP&L GMO’s Missouri regulated utility
      operations.  There is currently approximately $37 million in
      outstanding borrowings under this
facility.
  ·
                  $131
      million credit agreement dated August 31, 2005, with Union Bank of
      California, expiring August 31, 2010.  This facility is secured
      by a mortgage on the assets of KCP&L GMO’s Missouri Public Service
      electric utility division and is intended to provide financing for
      KCP&L GMO’s participation in the Iatan Nos. 1 and 2 projects that are
      part of KCP&L’s Comprehensive Energy Plan.  There are
      currently no borrowings outstanding under this
  facility.
  None of
the guaranteed obligations are subject to default or prepayment as a result of
downgrading of KCP&L GMO securities, although such a downgrading has in the
past, and could in the future, increase interest charges under KCP&L GMO’s
revolving line of credit and credit agreement and KCP&L GMO’s 11.875% Senior
Notes due 2012 and 7.95% Senior Notes due 2011.
  New
Accounting Standards
 See Note
19 to the consolidated financial statements for information regarding new
accounting standards.
  ITEM
3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
  Great
Plains Energy and KCP&L are exposed to market risks associated with
commodity price and supply, interest rates and equity prices.  Market
risks are handled in accordance with established policies, which may include
entering into various derivative transactions.  In the normal course
of business, Great Plains Energy and KCP&L also face risks that are either
non-financial or non-quantifiable.  Such risks principally include
business, legal, regulatory, operational and credit risks and are discussed
elsewhere in this document as well as in the 2007 Form 10-K and therefore are
not represented here.
  Great
Plains Energy and KCP&L interim period disclosures about market risk
included in quarterly reports on Form 10-Q address material changes, if any,
from the most recently filed annual report on Form 10-K.  Therefore,
these interim period disclosures should be read in connection with Item 7A.
Quantitative and Qualitative Disclosures About Market Risk, included in the 2007
Form 10-K of each of Great Plains Energy and KCP&L, incorporated herein by
reference.
  ITEM
4.  CONTROLS AND PROCEDURES
  Disclosure
Controls and Procedures
 Great
Plains Energy carried out evaluations of its disclosure controls and procedures
(as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of
1934, as amended).  These evaluations were conducted under the
supervision, and with the participation, of the Company’s management, including
the chief executive officer, chief financial officer, and the Company’s
disclosure committee.
 67
 Based
upon these evaluations, the chief executive officer and chief financial officer
of Great Plains Energy have concluded as of the end of the period covered by
this report that the disclosure controls and procedures of Great Plains Energy
are functioning effectively to provide reasonable assurance that: (i) the
information required to be disclosed by the Company in the reports that it files
or submits under the Securities Exchange Act of 1934, as amended, is recorded,
processed, summarized and reported within the time periods specified in the
SEC’s rules and forms; and (ii) the information required to be disclosed by the
Company in the reports that it files or submits under the Securities Exchange
Act of 1934, as amended, is accumulated and communicated to their respective
management, including the principal executive and principal financial officers,
as appropriate to allow timely decisions regarding required
disclosure.
  Changes
in Internal Control Over Financial Reporting
 There has
been no change in Great Plains Energy’s internal control over financial
reporting that occurred during the quarterly period ended June 30, 2008, that
has materially affected, or is reasonably likely to materially affect, its
internal control over financial reporting.  Great Plains Energy has
made certain changes in its internal control over financial reporting during the
quarter as a result of the disposition of Strategic Energy on June 2,
2008.
  ITEM
4T.  CONTROLS AND PROCEDURES
  Disclosure
Controls and Procedures
 KCP&L
carried out evaluations of its disclosure controls and procedures (as defined in
Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as
amended).  These evaluations were conducted under the supervision, and
with the participation, of KCP&L’s management, including the chief executive
officer and chief financial officer, and KCP&L’s disclosure
committee.
  Based
upon these evaluations, the chief executive officer and chief financial officer
of KCP&L have concluded as of the end of the period covered by this report
that the disclosure controls and procedures of KCP&L are functioning
effectively to provide reasonable assurance that: (i) the information required
to be disclosed by KCP&L in the reports that it files or submits under the
Securities Exchange Act of 1934, as amended, is recorded, processed, summarized
and reported within the time periods specified in the SEC’s rules and forms; and
(ii) the information required to be disclosed by KCP&L in the reports that
it files or submits under the Securities Exchange Act of 1934, as amended, is
accumulated and communicated to their respective management, including the
principal executive and principal financial officers, as appropriate to allow
timely decisions regarding required disclosure.
  Changes
in Internal Control Over Financial Reporting
 There has
been no change in KCP&L’s internal control over financial reporting that
occurred during the quarterly period ended June 30, 2008, that has materially
affected, or is reasonably likely to materially affect, its internal control
over financial reporting.
  PART
II –OTHER
INFORMATION
  ITEM
1.  LEGAL PROCEEDINGS
  Other
Proceedings
 The
companies are parties to various lawsuits and regulatory proceedings in the
ordinary course of their respective businesses.  For information
regarding material lawsuits and proceedings, see Notes 2, 5, 13 and 14 to the
consolidated financial statements.  Such descriptions are incorporated
herein by reference.
 68
 ITEM
1A.  RISK FACTORS
  Changes
in Risk Factors Resulting from the Sale of Strategic Energy
 On June
2, 2008, Great Plains Energy completed the sale of Strategic Energy to Direct
Energy.  As a result, the Strategic Energy-specific risk factors
identified below, as well as all references to Strategic Energy in the risk
factors contained in Item 1A. Risk Factors in the 2007 Form 10-K, as modified by
Part II, Item 1A. Risk Factors in the 10-Q for the quarter ended March 31, 2008,
are no longer applicable.  These specific risk factors
are:
  ·
                  The
      ability of Strategic Energy to compete in states offering retail choice
      may be materially affected by state regulations and host public utility
      rates.
 ·
                  The
      announced review of alternatives for Strategic Energy may cause business
      uncertainties, which could adversely affect Great Plains Energy’s results
      of operation.
 ·
                  Strategic
      Energy operates in competitive retail electricity markets, which could
      impact financial results.
 ·
                  Strategic
      Energy supplier and customer credit risk may adversely affect financial
      results.
 
 Changes
in Risk Factors Resulting from the Acquisition of Aquila
 On July
14, 2008, Great Plains Energy closed its acquisition of Aquila.  As a
result, the risk factors of Great Plains Energy now reflect risks associated
with the ownership and operations of KCP&L GMO.  Many of these
risks are similar to those of KCP&L, Great Plains Energy’s other regulated
public utility, with the exception of the following risk factor, which is
discussed in more detail below.
  ·
                  Great
      Plains Energy has guaranteed substantially all of the outstanding debt of
      KCP&L GMO, and payments under these guaranties may adversely affect
      Great Plains Energy’s liquidity.
 
 Updated
and Restated Risk Factors
 The
Strategic Energy sale and the Aquila acquisition have resulted in numerous
changes to Great Plains Energy’s risk factors, as summarized
above.  Given the extent of the changes to the risk factors as
presented in Item 1A. Risk Factors in the 2007 Form 10-K, and as modified by
Part II, Item 1A. Risk Factors in the Form 10-Q for the quarter ended March 31,
2008, Great Plains Energy and KCP&L have updated and restated these risk
factors in their entirety.
 
 Actual
results in future periods for Great Plains Energy and KCP&L could differ
materially from historical results and the forward-looking statements contained
in this report.  The companies’ business is influenced by many factors
that are difficult to predict, involve uncertainties that may materially affect
actual results and are often beyond the companies’
control.  Additional risks and uncertainties not presently known or
that the companies’ management currently believes to be immaterial may also
adversely affect the companies.  The information presented below
updates and restates the risk factors described in the 2007 Form 10-K, as
modified in the Form 10-Q for the quarter ended March 31, 2008, of each of Great
Plains Energy and KCP&L.  This information, as well as the other
information included in this report and in the other documents filed with the
SEC, should be carefully considered before making an investment in the
securities of Great Plains Energy and KCP&L.  Risk factors of
KCP&L and KCP&L GMO are also risk factors for Great Plains
Energy.
  Complex
utility and environmental regulation could adversely affect Great Plains
Energy’s and KCP&L’s results of operations, financial position and cash
flows.
 KCP&L
and KCP&L GMO are subject to, or affected by, extensive federal and state
utility regulation.  They must also comply with environmental
legislation and associated regulations.  In the Company’s business
planning and management of operations, it must address the effects of existing
and proposed regulation on its businesses and changes in the regulatory
framework, including initiatives by federal and state legislatures, regional
transmission organizations, utility regulators and taxing
authorities.  Failure of KCP&L or KCP&L GMO to obtain adequate
rates or regulatory approvals, in a timely manner, adoption of new regulations
by federal or state
 69
 agencies,
or changes to current regulations and interpretations of such regulations may
materially affect Great Plains Energy’s and KCP&L’s business and results of
operations, financial position and cash flows.
 
 The
outcome of retail rate proceedings could have a material impact on the business
and is largely outside the Company’s control.
 The rates
that KCP&L and KCP&L GMO are allowed to charge their customers are the
single most important item influencing their results of operations, financial
position and cash flows.  These rates are subject to the
determination, in large part, of governmental entities outside of KCP&L and
KCP&L GMO’s control, including the MPSC, KCC (for KCP&L) and
FERC.  KCP&L and KCP&L GMO are also exposed to cost-recovery
shortfalls due to the inherent lag in the rate-setting process, especially
during periods of significant cost inflation.
  As a part
of the Missouri and Kansas stipulations approved by the MPSC and KCC in 2005,
KCP&L began implementation of its Comprehensive Energy
Plan.  Under the Comprehensive Energy Plan, KCP&L agreed to
undertake certain projects, including building and owning a portion of Iatan No.
2, installing a new wind-powered generating facility, installing environmental
upgrades to certain existing plants, infrastructure improvements and demand
management, distributed generation, and customer efficiency and affordability
programs.  In March 2007, KCP&L entered into a Collaboration
Agreement with the Sierra Club and Concerned Citizens of Platte County that
provides for increases in KCP&L’s wind generation capacity and energy
efficiency initiatives, reductions in certain emission permit levels at its
Iatan and LaCygne generating stations, and projects to offset certain carbon
dioxide emissions.  Most, but not all, of these commitments are
conditioned on regulatory approval.
  A
reduction or rejection by the MPSC or KCC of rate increase requests reflecting
the costs of projects under the Comprehensive Energy Plan or Collaboration
Agreement, or other costs and expenses, could lead to lowered credit ratings,
reduced access to capital markets, increased financing costs, lower flexibility
due to constrained financial resources and increased collateral security
requirements, which could materially and adversely affect KCP&L’s and Great
Plains Energy’s results of operations, financial position, and cash
flows.  In response to competitive, economic, political, legislative
and regulatory pressures, KCP&L and KCP&L GMO may be subject to rate
moratoriums, rate refunds, limits on rate increases or rate reductions,
including phase-in plans designed to spread the impact of rate increases over an
extended period of time for the benefit of customers.  Any or all of
these could have a significant adverse effect on KCP&L’s and Great Plains
Energy’s results of operations, financial position and cash flows.
  Regulatory
requirements regarding utility operations may increase costs and may expose
KCP&L and KCP&L GMO to compliance penalties.
 The MPSC
and KCC have the authority to implement utility operational standards and
requirements, such as vegetation management standards, facilities inspection
requirements, and quality of service standards.  KCP&L agreed to
quality of service standards in Kansas in connection with the Aquila
acquisition.  The costs of new or modified operational standards and
requirements could have an adverse effect on KCP&L and Great Plains Energy’s
results of operations, financial position and cash flows as a result of
increased operations, maintenance and capital expenditures for new facilities,
or to repair or improve existing facilities.  Failure to meet quality
of service, operational or other standards and requirements could expose
KCP&L or KCP&L GMO to penalties or other adverse rate
consequences.
  Financial
market disruptions and declines in the credit ratings of Great Plains Energy,
KCP&L or KCP&L GMO may increase financing costs or limit access to the
credit markets, which may adversely affect liquidity and results.
 KCP&L’s
capital requirements are expected to be substantial over the next several
years.  The acquisition of Aquila has further increased the Company’s
overall capital requirements, and the capital requirements of KCP&L GMO over
the next several years are expected to be substantial as that company implements
generation and environmental projects.  The Company relies on access to
both short-term money markets and long-term capital markets as significant
sources of liquidity for capital requirements not satisfied by cash flows
from
 70
 operations.  The
Company also relies on the financial markets for credit support, such as letters
of credit, to support operations. The amount of credit support required for
KCP&L and KCP&L GMO operations varies with a number of factors,
including the amount and price of wholesale power purchased or
sold.
  Great
Plains Energy, KCP&L, KCP&L GMO and certain of their securities are
rated by Moody's Investors Service and Standard &
Poor's.  These ratings impact the companies’ cost of funds and Great
Plains Energy’s ability to provide credit support for its subsidiaries.The interest rates on a substantial portion of Great Plains Energy’s and
KCP&L GMO’s debt are subject to increase as their respective credit ratings
decrease.  The Company has agreed to not seek rate recovery of
KCP&L GMO interest costs in excess of equivalent investment-grade debt, and
the MPSC approval of the Aquila acquisition is conditioned on the requirement
that any post-merger financial effects of a credit downgrade of Great Plains
Energy, KCP&L or KCP&L GMO occurring as a result of the acquisition
would be borne by shareholders and not utility customers.  The amount
of collateral or other credit support required under power supply agreements is
also dependent on credit ratings.
  Changes
in financial or other market conditions, or a decrease in credit ratings would
have an adverse impact on the Company’s access to capital, its cost of funds,
the amount of collateral or other credit support obligations required to be
posted with contractual counterparties, rate recovery of costs and Great Plains
Energy’s ability to provide credit support for its subsidiaries and, therefore,
adversely affect Great Plains Energy’s and KCP&L’s results of operations,
financial position and cash flows.
  Great
Plains Energy has guaranteed substantially all of the outstanding debt of
KCP&L GMO and payments under these guaranties may adversely affect Great
Plains Energy’s liquidity.
 In
connection with the Aquila acquisition, Great Plains Energy issued its
guaranties of substantially all of the outstanding debt of KCP&L
GMO.  The guaranties were a factor in KCP&L GMO receiving
investment-grade ratings; however, the guaranties obligate Great Plains Energy
directly to pay amounts owed by KCP&L GMO to the holders of the guaranteed
debt in the event KCP&L GMO defaults on its payment
obligations.  Any guaranty payments could adversely affect Great
Plains Energy’s liquidity.
  Only
a portion of the costs associated with the Aquila acquisition will be recovered
through utility rates, and the expected non-utility cost benefits of the Aquila
transaction may not be realized, which could adversely affect Great Plains
Energy’s business and results of operations, financial position and cash
flows.
 The MPSC
order approving the Aquila transaction provides that the transaction costs will
not be recovered through utility rates, and that transition costs (estimated to
be approximately $59 million) will be recoverable through utility rates only to
the extent the costs are offset by benefits resulting from the
acquisition.
  The
Company expects to achieve various benefits, including cost savings and
operating efficiencies in connection with the
acquisition.  Approximately half of the total estimated cost savings
over the first five years following the Aquila acquisition are expected to come
from reductions in KCP&L GMO’s corporate overhead and other costs that are
not being recovered, and are not expected to be recovered, through KCP&L
GMO’s Missouri utility rates.  If the Company is not able to eliminate
these non-Missouri utility costs as anticipated, its results of operations,
financial position and cash flows will be negatively impacted.
  The
benefits of integrating KCP&L’s and KCP&L GMO’s utility businesses may
be less than expected, which could adversely affect the Company’s business,
regulatory treatment and results of operations, financial position and cash
flows.
 The
Company also expects to achieve synergies through the integration of KCP&L
and KCP&L GMO utility operations.  This integration poses
significant challenges due to the size and complexity of each
organization.  The Company has dedicated substantial efforts and
resources since the proposed transaction was announced to plan for an efficient
and successful integration of utility operations.  The Company
believes that it will have the necessary employees to successfully operate the
integrated utility operations, and that it will achieve the anticipated
benefits.  However, there is no assurance that the utility operations
integration will be completed
 71
 successfully
or in a timely manner, or result in the anticipated benefits.  Failure
to achieve the anticipated cost reductions or customer service levels could
result in adverse regulatory actions and could negatively affect Great Plains
Energy’s and KCP&L’s results of operations, financial position and cash
flows.
  As
a service provider to KCP&L GMO, KCP&L may have exposure to KCP&L
GMO’s financial performance and operations.
 KCP&L
GMO has no employees of its own.  KCP&L employees operate and
manage KCP&L GMO’s properties, and KCP&L charges KCP&L GMO for the
cost of these services.  These arrangements may pose risks to
KCP&L, including possible claims arising from actions of KCP&L employees
in operating KCP&L GMO’s properties and providing other services to
KCP&L GMO.  KCP&L’s claims for reimbursement for services
provided to KCP&L GMO are unsecured and rank equally with other unsecured
obligations of KCP&L GMO.  KCP&L’s ability to be reimbursed
for the costs incurred for the benefit of KCP&L GMO depends on the financial
ability of KCP&L GMO to make such payments.
  The
Company is subject to current and potential environmental laws and the
incurrence of environmental liabilities, any or all of which may adversely
affect the Company’s business and financial results.
 The
Company is subject to regulation by federal, state and local authorities with
regard to air quality and other environmental matters, primarily through
KCP&L and KCP&L GMO’s operations.  The generation,
transmission and distribution of electricity produces and requires disposal of
certain hazardous products, which are subject to these laws and
regulations.  In addition to imposing continuing compliance
obligations, these laws and regulations authorize the imposition of substantial
penalties for noncompliance, including fines, injunctive relief and other
sanctions.  Failure to comply with these laws and regulations could
have a material adverse effect on Great Plains Energy’s and consolidated
KCP&L’s results of operations, financial position and cash
flows.
  There is
also a risk of new environmental laws and regulations, and judicial
interpretations of environmental laws and regulations, affecting KCP&L and
KCP&L GMO’s operations.  In particular, various stakeholders,
including legislators, regulators, shareholders and non-governmental
organizations, as well as utilities and other companies in many business
sectors, are considering ways to address climate change.  These
include regulation of carbon dioxide and other greenhouse gas emissions and
efforts to encourage or mandate the use of renewable resources, energy
efficiency and demand response management.  Federal and/or state
legislation or regulation to reduce greenhouse gas emissions may be enacted in
the near future.  The Kansas Department of Health and Environment has
indicated that it intends to engage industries and stakeholders to establish
goals for reducing CO2 emissions
and strategies to achieve those goals.  KCP&L’s current generation
capacity is primarily coal-fired, and is estimated to produce about one ton of
CO2per MWh, or approximately 17 million tons per year.  KCP&L
GMO’s current generation capacity also is primarily coal-fired, and is estimated
to produce approximately 6 million tons of CO2per
year.Efforts to reduce greenhouse gas emissions may cause
KCP&L and KCP&L GMO to incur material costs to reduce the greenhouse gas
emissions from their operations (through additional environmental control
equipment, retiring and replacing existing generation, or selecting more costly
generation alternatives), procure emission allowance credits, or incur taxes,
fees or other governmental impositions on account of such
emissions.  Rules governing emissions of mercury, nitrous oxides and
sulfur dioxides are also in a state of flux.  Rules issued by the
Environmental Protection Agency (EPA) regarding these emissions were reversed by
the courts, and it is unclear what standards will be imposed in the future, or
when KCP&L and KCP&L GMO may have to comply with any new
standards.  KCP&L’s and KCP&L GMO’s projected capital
expenditures for environmental compliance are subject to significant
uncertainties, including the timing of implementation of new or modified
environmental requirements, the emissions limits imposed by these requirements
and the types and costs of the compliance alternatives selected by KCP&L and
KCP&L GMO.  As a result, costs to comply with environmental
requirements cannot be estimated with certainty, and actual costs could be
significantly different than the projections.  Other new environmental
laws and regulations affecting KCP&L and KCP&L GMO’s operations may be
adopted, and new interpretations of existing laws and regulations could be
adopted or become applicable to KCP&L and KCP&L GMO or their facilities,
any of which may adversely affect the Company’s business and substantially
increase its environmental expenditures in the future.
 72
 New
facilities, or modifications of existing facilities, may require new
environmental permits or amendments to existing permits.  Delays in
the environmental permitting process, denials of permit applications, conditions
imposed in permits and the associated uncertainty may materially affect the cost
and timing of the environmental retrofit projects included in the Comprehensive
Energy Plan, among other projects, and thus materially affect the Company’s
results of operations, financial position and cash flows.
  Under
current law, KCP&L and KCP&L GMO are also generally responsible for any
on-site liabilities associated with the environmental condition of their
facilities, including those that they have previously owned or operated,
regardless of whether the liabilities arose before, during or after the time
they owned or operated the facilities.  KCP&L and KCP&L GMO
may not be able to recover all of their costs for environmental expenditures
through rates in the future.  The incurrence of material environmental
costs or liabilities, without related rate recovery, could have a material
adverse effect on KCP&L or Great Plains Energy’s results of operations,
financial position and cash flows.  See the notes to the consolidated
financial statements for additional information regarding environmental
matters.
  The
Federal Clean Air Act requires companies to obtain permits and, if necessary,
install control equipment to reduce emissions when making a major modification
or a change in operation of an existing facility if either is expected to cause
a significant net increase in regulated emissions.  The Sierra Club
and Concerned Citizens of Platte County have claimed that modifications were
made to Iatan No. 1 in violation of Clean Air Act
regulations.  Although KCP&L has entered into a Collaboration
Agreement with those parties that provides, among other things, for the release
of such claims, the Collaboration Agreement does not bind any other
entity.  KCP&L is aware of subpoenas issued by a Federal grand jury to
certain third parties seeking documents relating to capital projects at Iatan
Unit No. 1.  In May 2008, KCP&L received a subpoena requiring
the production of documents.  KCP&L is preparing a response to the
subpoena.  KCP&L believes that it is in compliance in all material
respects with all relevant laws and regulations; however, the ultimate outcome
of these grand jury activities cannot presently be determined, nor can the
liability that could potentially result from a negative outcome presently be
reasonably estimated.  There is no assurance these costs, if any,
could be recovered in rates.
 
 The
inability of Great Plains Energy’s subsidiaries to provide sufficient dividends
to allow Great Plains Energy to pay dividends to its shareholders and meet its
financial obligations would have an adverse effect.
 Great
Plains Energy is a holding company with no significant operations of its
own.  The primary source of funds for payment of dividends to its
shareholders and its financial obligations is dividends paid to it by its
subsidiaries, particularly KCP&L and KCP&L GMO.  KCP&L has
committed to its state regulatory commissions to maintain a 35% equity to total
capitalization ratio, and has similar covenants in its revolving credit
facility.  KCP&L GMO’s credit facilities contain covenants restricting
its ability to pay dividends if certain financial ratios are not met or if
KCP&L GMO’s credit ratings are below BB/Ba2.  The ability of Great
Plains Energy’s subsidiaries to pay dividends or make other distributions, and
accordingly Great Plains Energy’s ability to pay dividends on its common stock
and meet its financial obligations, principally depends on the actual and
projected earnings and cash flow, capital requirements and general financial
position of its subsidiaries, as well as on regulatory factors, financial
covenants, general business conditions and other matters.
  Changes
in customer demand, due to sustained downturns or sluggishness in the economy
and weather conditions may adversely affect KCP&L’s and Great Plains
Energy’s business and financial results.
 The
results of operations, financial position and cash flows of KCP&L and Great
Plains Energy can be materially affected by changes in weather and customer
demand.  KCP&L and KCP&L GMO estimate customer demand based on
historical trends, to procure fuel and purchased power.  Sustained
downturns or sluggishness in the economy generally affects the markets in which
KCP&L and KCP&L GMO operate.  Declines in economic conditions
may reduce overall electricity sales and/or increase bad debt expense, which
could materially affect KCP&L’s and Great Plains Energy’s results of
operations, financial position and cash flows.
 73
 Weather
conditions directly influence the demand for electricity and natural gas and
affect the price of energy commodities. KCP&L and KCP&L GMO are
significantly impacted by seasonality, with approximately one-third of their
retail electric revenues recorded in the third quarter.  In addition,
severe weather, including but not limited to tornados, snow, rain and ice storms
can be destructive causing outages and property damage that can potentially
result in additional expenses and lower revenues.  Some of KCP&L’s
and KCP&L GMO’s stations use water from the Missouri River for cooling
purposes. Low water and flow levels, which have been experienced in recent
years, can increase maintenance costs at these stations and, if these levels
were to get low enough, could cause modifications to plant
operations.
  The
use of derivative contracts in the normal course of business could result in
financial losses that could negatively impact Great Plains Energy’s and
KCP&L’s results of operations, financial position and cash
flows.
 Great
Plains Energy, KCP&L and KCP&L GMO use derivative instruments, such as
swaps, options, futures and forwards, to manage commodity and financial
risks.  Financial losses could be recognized as a result of volatility
in the market values of these contracts, if a counterparty fails to perform, or
if the underlying transactions which the derivative instruments are intended to
hedge fail to materialize.  In the absence of actively quoted market
prices and pricing information from external sources, the valuation of these
financial instruments can involve management’s judgment or use of
estimates.  As a result, changes in the underlying assumptions or use
of alternative valuation methods could affect the reported fair value of these
contracts.
  Changes
in commodity prices could have an adverse effect on Great Plains Energy’s and
KCP&L’s business and financial condition.
 KCP&L
and KCP&L GMO engage in the wholesale and retail marketing of electricity
and are exposed to risks associated with the price of
electricity.  KCP&L and KCP&L GMO generate, purchase and sell
electricity in the retail and wholesale markets.  To the extent that
exposure to the price of electricity is not hedged, Great Plains Energy and
KCP&L could experience losses associated with the changing market price for
electricity.
  Increases
in fuel and transportation prices could have an adverse impact on KCP&L and
Great Plains Energy’s costs.
 KCP&L’s
Kansas retail rates contain an energy cost adjustment (ECA)
mechanism.  KCP&L’s Missouri retail rates do not contain a similar
provision.  Missouri retail rates reflect a set level of non-firm
wholesale electric sales margin.  KCP&L will not recover any
shortfall in non-firm wholesale electric sales margin, but any amount above the
level reflected in Missouri retail rates will be returned to retail customers in
a future rate case.  KCP&L GMO’s Missouri rates contain a fuel
adjustment clause mechanism under which 95% of the variance in fuel costs from
the amount provided in base rates is passed along to KCP&L GMO’s
customers.  This exposes KCP&L and KCP&L GMO to risk from
changes in the market prices of coal, natural gas, nuclear fuel and purchased
power.  Changes in KCP&L’s or KCP&L GMO’s fuel mix due to
electricity demand, plant availability, transportation issues, fuel prices, fuel
availability and other factors can also adversely affect KCP&L’s or
KCP&L GMO’s fuel and purchased power costs.
  KCP&L
and KCP&L GMO do not hedge their respective entire exposure from fuel and
transportation price volatility.  Forward prices for coal have
increased, principally due to international demand, and management expects
prices will continue to increase.  Management also expects cost of
nuclear fuel to increase significantly from 2009 through
2018.  Consequently, KCP&L’s and Great Plains Energy’s results of
operations, financial position and cash flows may be materially impacted by
changes in these prices until increased costs are recovered in Missouri retail
rates.
  Wholesale
electricity prices affect costs and revenues, creating earnings
volatility.
 The
levels of KCPL and KCP&L GMO wholesale sales depend on the wholesale market
price, transmission availability and the availability of generation for
wholesale sales, among other factors.  A substantial portion of
wholesale sales are made in the spot market, and thus KCP&L and KCP&L
GMO have immediate exposure to
 74
 wholesale
price changes.  KCP&L and KCP&L GMO are also exposed to price
risk because at times they purchase power to meet customers’
needs.  The cost of these purchases may be affected by the timing of
customer demand and/or unavailability of KCP&L and KCP&L GMO’s
lower-priced generating units.  Wholesale power prices can be volatile
and generally increase in times of high regional demand and high natural gas
prices.  While an allocated portion of wholesale purchases and sales
are reflected in KCP&L’s Kansas ECA, KCP&L’s Missouri rates are set on
an estimated amount of wholesale sales and purchases.  KCP&L will
not recover any shortfall in non-firm wholesale electric sales margin, but any
amount above the level reflected in Missouri retail rates will be returned to
retail customers in a future rate case.  KCP&L GMO’s Missouri fuel
adjustment clause passes along to its customers only 95% of the variance in
purchased power costs from the amount provided in base
rates.  Declines in wholesale market price or availability of
generation or transmission constraints in the wholesale markets could reduce
KCP&L’s and KCP&L GMO 's wholesale sales.  Increases in the
amounts or prices of power purchased by KCP&L or KCP&L GMO to serve
their retail customers could increase costs over the levels reflected in their
rates.  These events could adversely affect KCP&L and Great Plains
Energy’s results of operations, financial position and cash flows.
  Operations
risks may adversely affect the Company’s business and financial
results.
 The
operation of KCP&L and KCP&L GMO’s electric generation, transmission and
distribution systems involves many risks, including breakdown or failure of
equipment, processes and personnel performance; operating limitations that may
be imposed by equipment conditions, environmental or other regulatory
requirements; fuel supply or fuel transportation reductions or interruptions;
transmission scheduling constraints; and catastrophic events such as fires,
explosions, severe weather or other similar occurrences.  An equipment
outage or constraint can:
  ·
                  in
      the case of generation equipment, directly affect operating costs,
      increase purchased power needs and costs and reduce wholesale sales
      opportunities;
  ·
                  in
      the case of transmission equipment, affect operating costs, require
      changes in the source of generation and affect wholesale sales
      opportunities;
  ·
                  in
      the case of distribution systems, affect revenues and operating costs and
      the companies’ ability to meet regulatory service metrics and customer
      expectations.
  With the
exception of Hawthorn No. 5, which was substantially rebuilt in 2001, all of
KCP&L’s coal-fired generating units and its nuclear generating unit were
constructed prior to 1986.  All of KCP&L GMO’s coal-fired
generating units were constructed prior to 1984.  The age of these
generating units increases the risk of unplanned outages and higher maintenance
expense.  Training, preventive maintenance and other programs have
been implemented, but there is no assurance that these programs will prevent or
minimize future breakdowns or failures of KCP&L or KCP&L GMO generation
facilities.
  KCP&L
and KCP&L GMO currently have general liability and property insurance in
place to cover its facilities in amounts that management considers
appropriate.  Such policies are subject to certain limits and
deductibles and do not include business interruption
coverage.  Insurance coverage may not be available in the future at
current costs or on commercially reasonable terms, and the insurance proceeds
received for any loss of, or any damage to, any of KCP&L or KCP&L GMO’s
facilities may not be sufficient to restore the loss or damage.
  These and
other operating events may reduce KCP&L and Great Plains Energy’s revenues,
increase their costs, or both, and may materially affect KCP&L and Great
Plains Energy’s results of operations, financial position and cash
flows.
  The
cost and schedule of construction projects may materially change.
 KCP&L’s
Comprehensive Energy Plan includes the construction of Iatan No. 2, an estimated
850 MW coal-fired generating plant, and environmental retrofits at its existing
Iatan No. 1 and LaCygne No. 1 coal-fired units.
 75
 KCP&L
GMO also has ownership interests in the Iatan units, and its acquisition by
Great Plains Energy exposes the Company to greater risks associated with the
ongoing Iatan construction projects.  There are risks that actual
costs may exceed current estimates, delays may occur in obtaining permits and
materials, suppliers and contractors may not perform as required under their
contracts, there may be inadequate availability or increased cost of qualified
craft labor, the scope and timing of projects may change, and other events
beyond KCP&L’s control may occur that may materially affect the schedule,
budget and performance of these projects.
  The
construction projects contemplated in the Comprehensive Energy Plan rely upon
the supply of a significant percentage of materials from overseas
sources.  This global procurement subjects the delivery of procured
material to issues beyond what would be expected if such material were supplied
from sources within the United States.  These risks include, but are
not limited to, delays in clearing customs, ocean transportation, currency
exchange rates and potential civil unrest in sourcing countries, among
others.
  The
demand for environmental projects, similar to those in the Comprehensive Energy
Plan, has increased substantially with many utilities in the United States
starting similar projects to address changing environmental
regulations.  This demand has constrained labor and material resources
for such projects, and there is a risk that such constraints may
increase.
  These and
other risks could materially increase the estimated costs of these construction
projects, delay the in-service dates of these projects, adversely affect the
performance of the projects, and/or require KCP&L or KCP&L GMO to
purchase additional electricity to supply their respective retail customers
until the projects are completed.  KCP&L and KCP&L GMO are not
permitted to start recovering the costs of these projects until they are
completed and put into service.  Thus, these risks may materially
affect KCP&L’s and Great Plains Energy’s results of operations, financial
position and cash flows.
  Failure
of one or more generation plant co-owners to pay their share of construction,
operations and maintenance costs could increase KCP&L’s costs and capital
requirements.
 KCP&L
owns 47% of Wolf Creek, 50% of LaCygne Station, 70% of Iatan No. 1 and 55% of
Iatan No. 2.  KCP&L GMO owns 18% of both Iatan
units.  The remaining portions of these facilities are owned by other
utilities that are contractually obligated to pay their proportionate share of
capital and other costs and, in the case of Iatan No. 2, construction
costs.
  While the
ownership agreements provide that a defaulting co-owner’s share of the
electricity generated can be sold by the non-defaulting co-owners, there is no
assurance that the revenues received will recover the increased costs borne by
the non-defaulting co-owners.  The Iatan No. 2 co-owners have provided
financial assurances related to their respective construction cost obligations,
but there is a risk that such assurances may not be sufficient in the event of a
co-owner default.  During the construction period, the Iatan No. 2
agreements provide for re-allocations of part or all of a defaulting co-owner’s
share of the facility to the non-defaulting owners, which would increase the
capital requirements, operations and maintenance costs of the non-defaulting
owners.  Occurrence of these or other events could materially increase
KCP&L and Great Plains Energy’s costs and capital requirements.
  An
aging workforce and increasing demand for skilled craft labor poses operational
and planning challenges.
 Through
2011, approximately 22% of KCP&L employees (who manage both KCP&L and
KCP&L GMO operations) will be eligible to retire with full pension benefits.
This is a general industry issue, which has increased the demand for and cost of
skilled craft labor for both companies and contractors.  KCP&L and
KCP&L GMO use contractors for a substantial portion of their construction
and maintenance work.  Failure to hire and adequately train
replacement employees, including the transfer of significant internal historical
knowledge and expertise to the new employees, or the future availability and
cost of contract labor may adversely affect the ability to manage and operate
KCP&L’s and Great Plains Energy’s businesses.
 76
 Market
performance, increased retirements and changes in retirement plan regulations
could significantly impact retirement plan funding requirements and associated
cash needs and expenses.
 Substantially
all of KCP&L’s employees participate in defined benefit and post-retirement
plans.  If employees retire when they become eligible for retirement
through 2011, or if these plans experience adverse market returns on
investments, or if interest rates materially fall, KCP&L contributions to
the plans could rise substantially over historical levels.  In
addition, assumptions related to future costs, returns on investments, interest
rates and other actuarial assumptions, including projected retirements, have a
significant impact on KCP&L’s results of operations, financial position and
cash flows.  KCP&L GMO’s former employees have accrued benefits in
KCP&L GMO’s defined benefit and post-retirement plans, and KCP&L GMO
faces risks and uncertainties regarding these accrued benefits similar to those
of KCP&L.
  The
Pension Protection Act of 2006 alters the manner in which pension plan assets
and liabilities are valued for purposes of calculating required pension
contributions and changes the timing of required contributions to underfunded
plans.  The funding rules, which became effective in 2008, could
significantly affect the Company’s funding requirements.  In addition,
the Financial Accounting Standards Board (FASB) has a project to reconsider the
accounting for pensions and other post-retirement benefits.  This
project may result in accelerated expense.
  KCP&L
is exposed to risks associated with the ownership and operation of a nuclear
generating unit, which could result in an adverse effect on the Company’s and
KCP&L’s business and financial results.
 KCP&L
owns 47% (548 MW) of Wolf Creek.  The Nuclear Regulatory Commission
(NRC) has broad authority under federal law to impose licensing and
safety-related requirements for the operation of nuclear generation facilities,
including Wolf Creek.  In the event of non-compliance, the NRC has the
authority to impose fines, shut down the facilities, or both, depending upon its
assessment of the severity of the situation, until compliance is
achieved.  Any revised safety requirements promulgated by the NRC
could result in substantial capital expenditures at Wolf Creek.
  Wolf
Creek has the lowest fuel cost per MWh of any of KCP&L's generating
units.  Although not expected, an extended outage of Wolf Creek,
whether resulting from NRC action, an incident at the plant or otherwise, could
have a substantial adverse effect on KCP&L's results of operations,
financial position and cash flows in the event KCP&L incurs higher
replacement power and other costs that are not recovered through
rates.  If a long-term outage occurred, the state regulatory
commissions could reduce rates by excluding the Wolf Creek investment from rate
base.
  Ownership
and operation of a nuclear generating unit exposes KCP&L to risks regarding
decommissioning costs at the end of the unit's life.  KCP&L
contributes annually to a tax-qualified trust fund to be used to decommission
Wolf Creek.  The funding level assumes a projected level of return on
trust assets.  If the actual return on trust assets is below the
anticipated level, KCP&L could be responsible for the balance of funds
required; however, should this happen, management believes a rate increase would
be allowed ensuring full recovery of decommissioning costs over the remaining
life of the unit.
  KCP&L
is also exposed to other risks associated with the ownership and operation of a
nuclear generating unit, including, but not limited to, potential liability
associated with the potential harmful effects on the environment and human
health resulting from the operation of a nuclear generating unit and the
storage, handling and disposal of radioactive materials, and to potential
retrospective assessments and losses in excess of insurance
coverage.
  Participation
in regional transmission organizations (RTOs) could increase costs, reduce
revenues, and reduce KCP&L’s and KCP&L GMO’s control over their
transmission assets.
 Functional
control of the KCP&L transmission systems was transferred to the Southwest
Power Pool, Inc. (SPP) during the third quarter of 2006.  KCP&L
may be required to incur expenses or expand its transmission system, for which
it would seek recovery for through rates, according to decisions made by the SPP
rather than according
 77
 to its
internal planning process.  In addition, there is uncertainty
regarding the impact of ongoing RTO developments at FERC.
  KCP&L
GMO’s application to join the Midwest Independent System Operator (MISO) RTO is
pending MPSC ruling.  KCP&L GMO will face risks and uncertainties
regarding its participation in an RTO similar to those that KCP&L faces with
respect to the SPP.
  The
outcome of legal proceedings cannot be predicted.  An adverse finding
could have a material adverse effect on Great Plains Energy’s and KCP&L’s
financial condition.
 Great
Plains Energy, KCP&L and KCP&L GMO are party to various material
litigation and regulatory matters arising out of their business
operations.  The ultimate outcome of these matters cannot presently be
determined, nor, in many cases, can the liability that could potentially result
from a negative outcome in each case presently be reasonably
estimated.  The liability that Great Plains Energy, KCP&L and
KCP&L GMO may ultimately incur with respect to any of these cases in the
event of a negative outcome may be in excess of amounts currently reserved and
insured against with respect to such matters and, as a result, these matters may
have a material adverse effect on Great Plains Energy’s and KCP&L’s results
of operations, financial position and cash flows.
  ITEM 2.  UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  The
following table provides information regarding purchases by Great Plains Energy
of its equity securities during the second quarter of 2008.
 Issuer
      Purchases of Equity SecuritiesMaximum
      NumberTotal
      Number of
                  
                  (or
      ApproximateShares
      (or Units)
                  
                  Dollar
      Value) ofTotal
                  
                  Purchased
      as
                  
                  Shares
      (or Units)Number
      of
                  Average
                  Part
      of Publicly
                  
                  that
      May Yet BeShares
                  Price
      Paid
                  Announced
                  
                  Purchased
      Under(or
      Units)
                  per
      Share
                  Plans
      or
                  
                  the
      Plans orMonth
                  Purchased
                  (or
      Unit)
                  Programs
                  
                  ProgramsApril
      1 - 30
                  3,547
                  (1)
                  $   25.56
                  -
                  
                  N/AMay
      1 - 31
                  110
                  (1)
                  26.46
                  -
                  
                  N/AJune
      1 - 30
                  12,122
                  (1)
                  26.10
                  -
                  
                  N/ATotal
                  15,779
                  
                  $   25.98
                  -
                  
                  N/A(1)
      Represents
      shares of common stock surrendered to the Company by certain officers to
      pay taxes relatedto
      the vesting of restricted common shares and the issuance of performance
      shares.
  ITEM
3.  DEFAULTS UPON SENIOR SECURITIES
  None.
 78
 ITEM
4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  Great
Plains Energy’s annual meeting of shareholders was held on May 6,
2008.  The shareholders elected ten directors and ratified the
appointment of Deloitte & Touche LLP as independent registered public
accountants for 2008.
  The ten
persons named below were elected, as proposed in the proxy statement, to serve
as directors until Great Plains Energy’s annual meeting in 2009 and until their
successors are elected and qualified.
 
 Nominee
                  
                  Votes For
                  
                  Votes WithheldDavid
      L. Bodde
                  
                  74,485,413
                  
                  1,447,525Michael
      J. Chesser
                  
                  74,494,538
                  
                  1,438,400William
      H. Downey
                  
                  74,385,792
                  
                  1,547,147Mark
      A. Ernst
                  
                  74,556,061
                  
                  1,376,878Randall
      C. Ferguson, Jr.
                  
                  74,583,354
                  
                  1,349,585Luis
      A. Jimenez
                  
                  74,552,437
                  
                  1,380,502James
      A. Mitchell
                  
                  74,551,626
                  
                  1,381,313William
      C. Nelson
                  
                  73,816,717
                  
                  2,116,221Linda
      H. Talbott
                  
                  74,419,455
                  
                  1,513,484Robert
      H. West
                  
                  74,445,016
                  
                  1,487,922
 
 No votes
were cast against the nominees due to cumulative voting.
 
 Great
Plains Energy shareholders ratified the appointment of Deloitte & Touche LLP
as independent registered public accountants for 2008.  The voting
regarding the appointment was as follows:
  Votes For
                  
                  Votes Against
                  
                  Abstentions75,075,490
                  
                  614,324
                  
                  243,122
 
 KCP&L
 Great
Plains Energy is KCP&L’s sole shareholder.  By a unanimous written
consent dated as of May 6, 2008, Great Plains Energy, as the sole shareholder,
elected the following directors of Great Plains Energy as the directors of
KCP&L for the ensuing year and until their successors are duly elected and
qualified, or until their resignations:  David L. Bodde; Michael J.
Chesser; William H. Downey; Mark A. Ernst; Randall C. Ferguson, Jr.; Luis A.
Jimenez; James A. Mitchell; William C. Nelson and Linda H. Talbott.
 79
 ITEM
5.  OTHER INFORMATION
  The
following information is provided in this Quarterly Report in lieu of reporting
such information under Item 5.02, Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officer, of Form 8-K.
  On August
5, 2008, the boards of directors of Great Plains Energy and KCP&L took the
following officer appointment and compensation actions.  The board of
directors of KCP&L appointed John R. Marshall as Executive Vice President –
Utility Operations, and increased his annual base salary to $390,000 from
$355,000.  Prior to the appointment, Mr. Marshall was Senior Vice
President – Delivery of KCP&L.  Mr. Marshall is a “named executive
officer” of Great Plains Energy, as defined in applicable SEC
regulations.  The board of directors of KCP&L appointed Michael J.
Chesser as Chairman of the Board and Chief Executive Officer, and William H.
Downey as President and Chief Operating Officer.  Prior to these
appointments, Mr. Chesser was Chairman of the Board, and Mr. Downey was
President and Chief Executive Officer, of KCP&L.  The board of
directors of Great Plains Energy approved an enhanced supplemental retirement
and severance benefit for Mr. Downey, who is also President and Chief Operating
Officer and a “named executive officer” of Great Plains Energy.  Mr.
Downey will receive a $700,000 lump sum payment upon his voluntary separation
from service upon or after reaching age 65.  If Mr. Downey dies or
becomes disabled before reaching age 65, he will receive a proportionately
reduced lump sum based on the period of time he was actively employed between
August 5, 2008 and his 65th
birthday.  In addition, if his employment is terminated prior to his
65th
birthday other than for “Cause”, or if he terminates employment prior to his
65th
birthday for “Good Reason” (as those terms are defined in his Change in Control
Severance Agreement, which was filed as Exhibit 10.1.b to Great Plains Energy’s
Form 10-Q for the quarter ended September 30, 2006), he will be entitled to
receive the full lump sum payment.  The preceding description of the
enhanced supplemental retirement and severance benefit is a summary only, and is
qualified in its entirety by reference to the letter attached as Exhibit 10.1.X
to this report.  Except as described above, there were no changes to
the existing compensation or other compensatory arrangements for Messrs.
Chesser, Downey or Marshall.  The information required by Items
401(b), (d) and (e) and Item 404(a) respecting Messrs. Chesser and Downey can be
found in the 2007 10-K and/or Great Plains Energy’s annual meeting proxy
statement dated March 26, 2008.
  ITEM
6.  EXHIBITS
  Great
Plains Energy Documents
  Exhibit
                      Number
                    
                    Description
      of Document2.1.1
                    *
                    Mutual
      Notice of Extension among Aquila, Inc., Great Plains Energy Incorporated,
      Gregory Acquisition Corp., and Black Hills Corporation dated as of April
      29, 2008.  (Exhibit 10.1 to Form 8-K filed April 30,
      2008).3.1.1
                    *
                    By-laws
      of Great Plains Energy Incorporated, as amended April 1, 2008. (Exhibit
      3.1 to Form 8-K dated April 7, 2008).10.1.1
                    *
                    Letter
      Agreement dated as of January 30, 2008, to Asset Purchase Agreement and
      Partnership Interests Purchase Agreement by and among Aquila, Inc., Black
      Hills Corporation, Great Plains Energy Incorporated and Gregory
      Acquisition Corp. (Exhibit 10.1.41 to Form 10-K for the year ended
      December 31, 2007).10.1.2
                    *
                    Letter
      Agreement dated as of February 28, 2008, to Asset Purchase Agreement and
      Partnership Interests Purchase Agreement by and among Aquila, Inc., Black
      Hills Corporation, Great Plains Energy Incorporated and Gregory
      Acquisition Corp. (Exhibit 10.1.3 to Form 10-Q for the quarter ended March
      31, 2008).
 80
 10.1.3
                    *
                    Letter
      Agreement dated as of March 28, 2008, to Asset Purchase Agreement and
      Partnership Interests Purchase Agreement by and among Aquila, Inc., Black
      Hills Corporation, Great Plains Energy Incorporated and Gregory
      Acquisition Corp. (Exhibit 10.1.4 to Form 10-Q for the quarter ended March
      31, 2008).10.1.4
                    *
                    Letter
      Agreement dated as of April 28, 2008, to Asset Purchase Agreement and
      Partnership Interests Purchase Agreement by and among Aquila, Inc., Black
      Hills Corporation, Great Plains Energy Incorporated and Gregory
      Acquisition Corp. (Exhibit 10.1.5 to Form 10-Q for the quarter ended March
      31, 2008).10.1.5
                    
                    Letter
      Agreement dated as of May 29, 2008, to Asset Purchase Agreement and
      Partnership Interests Purchase Agreement by and among Aquila, Inc., Black
      Hills Corporation, Great Plains Energy Incorporated and Gregory
      Acquisition Corp.10.1.6
                    
                    Letter
      Agreement dated as of June 19, 2008, to Asset Purchase Agreement and
      Partnership Interests Purchase Agreement by and among Aquila, Inc., Black
      Hills Corporation, Great Plains Energy Incorporated and Gregory
      Acquisition Corp.10.1.7
                    
                    Letter
      Agreement dated as of June 27, 2008, to Asset Purchase Agreement and
      Partnership Interests Purchase Agreement by and among Aquila, Inc., Black
      Hills Corporation, Great Plains Energy Incorporated and Gregory
      Acquisition Corp.10.1.8
                    *
                    Purchase
      Agreement, dated as of April 1, 2008, by and among Custom Energy Holdings,
      L.L.C., Direct Energy Services, LLC and Great Plains Energy Incorporated
      (Exhibit 10.1 to Form 8-K filed April 2, 2008).10.1.9
                    *
                    Joint
      Motion and Settlement Agreement dated as of February 26, 2008, among Great
      Plains Energy Incorporated, Kansas City Power & Light Company, the
      Kansas Corporation Commission Staff, the Citizens’ Utility Ratepayers
      Board, Aquila, Inc. d/b/a Aquila Networks, Black Hills Corporation, and
      Black Hills/Kansas Gas Utility Company, LLC. (Exhibit 10.1.7 to Form 10-Q
      for the quarter ended March 31, 2008).10.1.10
                    *
                    First
      Amendment to Credit Agreement dated as of May 16, 2008, among Great Plains
      Energy Incorporated, the Lenders party thereto and Bank of America, N.A.,
      as Administrative Agent. (Exhibit 10.1 to Form 8-K filed on May 22,
      2008).10.1.11
                    *
                    Second
      Amendment to Credit Agreement dated as of May 16, 2008, among Great Plains
      Energy Incorporated, the Lenders party thereto and Bank of America, N.A.,
      as Administrative Agent. (Exhibit 10.2 to Form 8-K filed on May 22,
      2008).10.1.12
                    *
                    Third
      Amendment to Credit Agreement dated as of June 13, 2008, among Great
      Plains Energy Incorporated, the Lenders party thereto and Bank of America,
      N.A., as Administrative Agent. (Exhibit 10.1 to Form 8-K filed on June 19,
      2008).10.1.13
                    *
                    Guaranty
      dated as of July 14, 2008, between Great Plains Energy Incorporated and
      Union Bank of California, N.A., related to Financing Agreement dated as of
      April 22, 2005, as amended, among Aquila, Inc., the lenders from time to
      time party thereto, and Union Bank of California, N.A. as Agent. (Exhibit
      10.1 to Form 8-K filed July 18, 2008).10.1.14
                    *
                    Guaranty
      dated as of July 14, 2008, between Great Plains Energy Incorporated and
      Union Bank of California, N.A., related to Credit Agreement dated as of
      August 31, 2005, as amended, among Aquila, Inc., the banks named therein,
      and Union Bank of California, N.A., as Administrative Agent. (Exhibit 10.2
      to Form 8-K filed July 18, 2008).
 81
 
 10.1.15
                    *
                    Guaranty
      dated as of July 15, 2008, issued by Great Plains Energy Incorporated in
      favor of Union Bank of California, N.A., as successor trustee, and the
      holders of the Aquila, Inc., 11.875% Senior Notes due July 1, 2012.
      (Exhibit 10.3 to Form 8-K filed July 18, 2008).10.1.16
                    *
                    Guaranty
      dated as of July 15, 2008, issued by Great Plains Energy Incorporated in
      favor of Union Bank of California, N.A., as successor trustee, and the
      holders of the Aquila, Inc., 7.75% Senior Notes due June 15, 2011.
      (Exhibit 10.4 to Form 8-K filed July 18, 2008).10.1.17
                    *
                    Guaranty
      dated as of July 15, 2008, issued by Great Plains Energy Incorporated in
      favor of Union Bank of California, N.A., as successor trustee, and the
      holders of the Aquila, Inc., 7.95% Senior Notes due February 1, 2011.
      (Exhibit 10.5 to Form 8-K filed July 18, 2008).10.1.18
                    *
                    Guaranty
      dated as of July 15, 2008, issued by Great Plains Energy Incorporated in
      favor of Union Bank of California, N.A., as successor trustee, and the
      holders of the Aquila, Inc., 8.27% Senior Notes due November 15, 2021.
      (Exhibit 10.6 to Form 8-K filed July 18, 2008).10.1.19
                    *
                    Guaranty
      dated as of July 15, 2008, issued by Great Plains Energy Incorporated in
      favor of Union Bank of California, N.A., as successor trustee, and the
      holders of the Aquila, Inc., 7.625% Senior Notes due November 15, 2009.
      (Exhibit 10.7 to Form 8-K filed July 18, 2008).10.1.20
                    +
                    Form
      of Restricted Stock Agreement.10.1.21
                    +
                    Form
      of Performance Share Agreement.10.1.22
                    +
                    Great
      Plains Energy Incorporated/Kansas City Power & Light Company Annual
      Incentive Plan Amended effective as of January 1, 2007, and 2008
      objectives adopted as of May 6, 2008.10.1.23
                    +
                    Letter
      regarding enhanced supplemental retirement and severance benefit for
      William H. Downey, dated August 5, 2008.10.1.24
                    +
                    Description
      of Certain Former Director and Named Executive Officer Compensatory
      Arrangements.10.1.25
                    +
                    Great
      Plains Energy Incorporated Long-Term Incentive Plan Awards Standards and
      Performance Criteria effective as of May 6, 2008.12.1
                    
                    Computation
      of Ratio of Earnings to Fixed Charges.31.1.a
                    
                    Rule
      13a-14(a)/15d-14(a) Certifications of Michael J.
  Chesser.31.1.b
                    
                    Rule
      13a-14(a)/15d-14(a) Certifications of Terry Bassham.32.1
                    
                    Section
      1350 Certifications.
 *Filed
with the SEC as exhibits to prior SEC filings and are incorporated herein by
reference and made a part hereof.  The SEC filing and the exhibit
number of the documents so filed, and incorporated herein by reference, are
stated in parenthesis in the description of such exhibit.
  +
Indicates management contract or compensatory plan or arrangement.
  Copies of
any of the exhibits filed with the SEC in connection with this document may be
obtained from Great Plains Energy upon written request.
 82
 Great
Plains Energy agrees to furnish to the SEC upon request any instrument with
respect to long-term debt as to which the total amount of securities authorized
does not exceed 10% of total assets of Great Plains Energy and its subsidiaries
on a consolidated basis.
 
 KCP&L
Documents
  Exhibit
                      Number
                    
                    Description of
      Document3.2.2
                    *
                    By-laws
      of Kansas City Power & Light Company, as amended April 1, 2008.
      (Exhibit 3.2 to Form 8-K dated April 7, 2008).10.2.1
                    
                    Amendment
      No. 2 dated as of July 11, 2008, among Kansas City Power & Light
      Receivables Company, Kansas City Power & Light Company, The Bank of
      Tokyo-Mitsubishi UFJ, Ltd., New York Branch and Victory Receivables
      Corporation to the Receivables Sale Agreement dated as of July 1,
      2005.10.2.2
                    *
                    Joint
      Motion and Settlement Agreement dated as of February 26, 2008, among Great
      Plains Energy Incorporated, Kansas City Power & Light Company, the
      Kansas Corporation Commission Staff, the Citizens’ Utility Ratepayers
      Board, Aquila, Inc. d/b/a Aquila Networks, Black Hills Corporation, and
      Black Hills/Kansas Gas Utility Company, LLC. (Exhibit 10.1.7 to Form 10-Q
      for the quarter ended March 31, 2008).12.2
                    
                    Computation
      of Ratio of Earnings to Fixed Charges.31.2.a
                    
                    Rule
      13a-14(a)/15d-14(a) Certifications of Michael J.
  Chesser.31.2.b
                    
                    Rule
      13a-14(a)/15d-14(a) Certifications of Terry Bassham.32.2
                    
                    Section
      1350 Certifications.
 *Filed with the SEC as
exhibits to prior SEC filings and are incorporated herein by reference and made
a part hereof.  The SEC filings and the exhibit number of the
documents so filed, and incorporated herein by reference, are stated in
parenthesis in the description of such exhibit.
  Copies of
any of the exhibits filed with the SEC in connection with this document may be
obtained from KCP&L upon written request.
  KCP&L
agrees to furnish to the SEC upon request any instrument with respect to
long-term debt as to which the total amount of securities authorized does not
exceed 10% of total assets of KCP&L and its subsidiaries on a consolidated
basis.
 83
 SIGNATURES
  Pursuant
to the requirements of the Securities Exchange Act of 1934, Great Plains Energy
Incorporated and Kansas City Power & Light Company have duly caused
this report to be signed on its behalf by the undersigned thereunto duly
authorized.
  GREAT
      PLAINS ENERGY INCORPORATEDDated:  August
      8, 2008
                    By:  /s/Michael J. Chesser(Michael
      J. Chesser)(Chief
      Executive Officer)Dated:  August
      8, 2008
                    By:  /s/Lori A. Wright(Lori
      A. Wright)(Principal
      Accounting Officer)
 
 
  KANSAS
      CITY POWER & LIGHT COMPANYDated:  August
      8, 2008
                    By:  /s/ Michael J. Chesser(Michael
      J. Chesser)(Chief
      Executive Officer)Dated:  August
      8, 2008
                    By:  /s/Lori A. Wright(Lori
      A. Wright)(Principal
      Accounting Officer)
 
  
 84