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 September 30,
2009




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)1200
      Main StreetKansas
      City, Missouri 64105(816)
      556-2200www.greatplainsenergy.com000-51873
            
            KANSAS
      CITY POWER & LIGHT COMPANY
            
            44-0308720(A
      Missouri Corporation)1200
      Main StreetKansas
      City, Missouri 64105(816)
      556-2200www.kcpl.comFormer
      address if changed since last reportThe
      former address of both registrants is:
              1201
      Walnut StreetKansas
      City, Missouri 64106








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 has submitted electronically and
      posted on its corporate Web site, if any, every
  InteractiveData
      File required to be submitted and posted pursuant to Rule 405 of
      Regulation S-T (§232.405 of this chapter) during the preceding
      12months
      (or for such shorter period that the registrant was required to submit and
      post such files).Great
      Plains Energy Incorporated
            Yes
            _
            No
            _
            
            Kansas
      City Power & Light Company
            Yes        _
            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 Exchange Act.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
      October 23, 2009, Great Plains Energy Incorporated had 135,323,599 shares
      of common stock outstanding.  On October 23,
    2009,Kansas
      City Power & Light Company had one share of common stock outstanding,
      which was held by Great Plains Energy Incorporated.Kansas
      City Power & Light Company meets the conditions set forth in General
      Instruction (H)(1)(a) and (b) of Form 10-Q and istherefore
      filing this Form 10-Q with the reduced disclosure
  format.





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 KCP&L Greater Missouri Operations Company (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 its other subsidiaries have any obligation in respect of KCP&L’s debt
securities and holders of such securities should not consider Great Plains
Energy’s or its other subsidiaries’ 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 its other subsidiaries.




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 2008 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 regional, national and international markets and their effects on
sales, prices and costs, including but not limited to possible further
deterioration in economic conditions and the timing and extent of any economic
recovery; prices and availability of electricity in regional and national
wholesale markets; market perception of the energy industry, Great Plains
Energy, KCP&L and 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 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 nuclear
decommissioning trust and pension plan assets and costs; impairments of
long-lived assets or goodwill; 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, but not limited to, weather-related
damage and their effects on sales, prices and costs; 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, but not limited to, retirement compensation and benefits costs; the
ability to successfully integrate KCP&L and 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,
together with the risk factors included in the 2008 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
            
            DefinitionAFUDC
            
            Allowance
      for Funds Used During ConstructionARO
            
            Asset
      Retirement ObligationBART
            
            Best
      available retrofit technologyBlack
      Hills
            
            Black
      Hills CorporationBoard
            
            Great
      Plains Energy Board of DirectorsCAIR
            
            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 subsidiariesDOE
            
            Department
      of EnergyECA
            
            Energy
      Cost AdjustmentEIRR
            
            Environmental
      Improvement Revenue RefundingEPA
            
            Environmental
      Protection AgencyEPS
            
            Earnings
      per common shareERISA
            
            Employee
      Retirement Income Security Act of 1974, as amendedFAC
            
            Fuel
      Adjustment ClauseFASB
            
            Financial
      Accounting Standards BoardFERC
            
            The
      Federal Energy Regulatory CommissionFGIC
            
            Financial
      Guaranty Insurance CompanyFSS
            
            Forward
      Starting SwapsGAAP
            
            Generally
      Accepted Accounting PrinciplesGMO
            
            KCP&L
      Greater Missouri Operations Company, a wholly owned subsidiary
      of
              Great
      Plains Energy as of July 14, 2008Great
      Plains Energy
            
            Great
      Plains Energy Incorporated and its subsidiariesHSS
            
            Home
      Service Solutions Inc., a wholly owned subsidiary of KLT
    Inc.ISO
            
            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 EnergyKW
            
            KilowattkWh
            
            Kilowatt
      hourMAC
            
            Material
      Adverse ChangeMDNR
            
            Missouri
      Department of Natural ResourcesMGP
            
            Manufactured
      gas plantMISO
            
            Midwest
      Independent Transmission System Operator, Inc.MPS
      Merchant
            
            MPS
      Merchant Services, Inc., a wholly owned subsidiary of
  GMOMPSC
            
            Public
      Service Commission of the State of MissouriMW
            
            MegawattMWh
            
            Megawatt
      hour 3
 Abbreviation or Acronym
            
            DefinitionNERC
            
            North
      American Electric Reliability CorporationNOx
            
            Nitrogen
      OxideNPNS
            
            Normal
      Purchases and Normal SalesNRC
            
            Nuclear
      Regulatory CommissionOCI
            
            Other
      Comprehensive IncomePCB
            
            Polychlorinated
      biphenylsPRB
            
            Powder
      River BasinQCA
            
            Quarterly
      Cost AdjustmentReceivables
      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 Incorporated, a wholly owned subsidiary
      of
              Great
      Plain EnergySIP
            
            State
      Implementation PlanSO2
            
            Sulfur
      DioxideSPP
            
            Southwest
      Power Pool, Inc.STB
            
            Surface
      Transportation BoardStrategic
      Energy
            
            Strategic
      Energy, L.L.C., a former subsidiary of KLT Energy
  ServicesSyncora
            
            Syncora
      Guarantee Inc.T
      - Lock
            
            Treasury
      LockUnion
      Pacific
            
            Union
      Pacific Railroad CompanyWCNOC
            
            Wolf
      Creek Nuclear Operating CorporationWestar
            
            Westar
      Energy, Inc., a Kansas utility companyWolf
      Creek
            
            Wolf
      Creek Generating Station


4


PART
I – FINANCIAL INFORMATION


ITEM
1. CONSOLIDATED FINANCIAL STATEMENTS





Great
Plains Energy Incorporated


Unaudited
Consolidated Balance Sheets


Unaudited
Consolidated Statements of Income


Unaudited
Consolidated Statements of Cash Flows


Unaudited
Consolidated Statements of Common Shareholders’ Equity


Unaudited
Consolidated Statements of Comprehensive Income





Kansas
City Power & Light Company


Unaudited
Consolidated Balance Sheets


Unaudited
Consolidated Statements of Income


Unaudited
Consolidated Statements of Cash Flows


Unaudited
Consolidated Statements of Common Shareholder’s Equity


Unaudited
Consolidated Statements of Comprehensive Income





Combined
Notes to Unaudited Consolidated Financial Statements for Great Plains Energy
Incorporated and Kansas City Power & Light Company


Note
1:   Summary of Significant Accounting Policies


Note
2:   GMO Acquisition


Note 3:   Supplemental
Cash Flow Information


Note
4:   Receivables


Note 5:   Assets Held
For Sale


Note 6:   Nuclear
Plant


Note 7:   Regulatory
Matters


Note 8:   Pension Plans
and Other Employee Benefits


Note 9:   Equity
Compensation


Note 10:  Short-Term
Borrowings and Short-Term Bank Lines of Credit


Note 11:  Long-Term
Debt


Note 12:  Common
Shareholders’ Equity


Note 13:  Commitments and
Contingencies


Note 14:  Legal
Proceedings


Note 15:  Related Party
Transactions and Relationships


Note 16:  Derivative
Instruments


Note 17:  Fair Value
Measurements


Note 18:  Taxes


Note 19:  Segments and
Related Information


Note 20:  Discontinued
Operations


Note 21:  Subsequent
Events


Note 22:  New Accounting
Standards


5


GREAT
      PLAINS ENERGY INCORPORATEDConsolidated
      Balance Sheets(Unaudited)September
      30
            December
      312009
            2008ASSETS
            (millions,
      except share amounts)Current
      AssetsCash
      and cash equivalents
            $
            16.5
            
            $
            61.1Funds
      on deposit
            
            5.4
            
            
            10.8Receivables,
      net
            
            230.2
            
            
            242.3Fuel
      inventories, at average cost
            
            90.1
            
            
            87.0Materials
      and supplies, at average cost
            
            115.4
            
            
            99.3Deferred
      refueling outage costs
            
            8.1
            
            
            12.4Refundable
      income taxes
            
            19.1
            
            
            26.0Deferred
      income taxes
            
            33.7
            
            
            28.6Assets
      held for sale (Note 5)
            
            16.8
            
            
            16.3Derivative
      instruments
            
            1.3
            
            
            4.8Prepaid
      expenses
            
            10.2
            
            
            15.2Total
            
            546.8
            
            
            603.8Nonutility
      Property and InvestmentsAffordable
      housing limited partnerships
            
            13.4
            
            
            13.9Nuclear
      decommissioning trust fund
            
            109.7
            
            
            96.9Other
            
            41.1
            
            
            41.1Total
            
            164.2
            
            
            151.9Utility
      Plant, at Original CostElectric
            
            8,766.4
            
            
            7,940.8Less-accumulated
      depreciation
            
            3,714.4
            
            
            3,582.5Net
      utility plant in service
            
            5,052.0
            
            
            4,358.3Construction
      work in progress
            
            1,408.4
            
            
            1,659.1Nuclear
      fuel, net of amortization of $123.6 and $110.8
            
            71.1
            
            
            63.9Total
            
            6,531.5
            
            
            6,081.3Deferred
      Charges and Other AssetsRegulatory
      assets
            
            805.5
            
            
            824.8Goodwill
            
            169.0
            
            
            156.0Derivative
      instruments
            
            8.3
            
            
            13.0Other
            
            40.5
            
            
            38.5Total
            
            1,023.3
            
            
            1,032.3Total
            $
            8,265.8
            
            $
            7,869.3The
      accompanying Notes to Consolidated Financial Statements are an integral
      part of these statements.


6


GREAT
      PLAINS ENERGY INCORPORATEDConsolidated
      Balance Sheets(Unaudited)September
      30
            December
      312009
            2008LIABILITIES
      AND CAPITALIZATION
            (millions,
      except share amounts)Current
      LiabilitiesNotes
      payable
            $
            156.0
            
            $
            204.0Commercial
      paper
            
            38.0
            
            
            380.2Current
      maturities of long-term debt
            
            70.1
            
            
            70.7Accounts
      payable
            
            231.1
            
            
            418.0Accrued
      taxes
            
            84.2
            
            
            27.7Accrued
      interest
            
            71.2
            
            
            72.4Accrued
      compensation and benefits
            
            39.4
            
            
            29.7Pension
      and post-retirement liability
            
            4.7
            
            
            4.7Derivative
      instruments
            
            -
            
            
            86.2Other
            
            37.8
            
            
            43.8Total
            
            732.5
            
            
            1,337.4Deferred
      Credits and Other LiabilitiesDeferred
      income taxes
            
            368.1
            
            
            387.1Deferred
      tax credits
            
            132.2
            
            
            105.5Asset
      retirement obligations
            
            131.2
            
            
            124.3Pension
      and post-retirement liability
            
            465.3
            
            
            445.6Regulatory
      liabilities
            
            233.9
            
            
            209.4Other
            
            143.3
            
            
            112.8Total
            
            1,474.0
            
            
            1,384.7CapitalizationGreat
      Plains Energy common shareholders' equityCommon
      stock-250,000,000 shares authorized without par value135,534,441
      and 119,375,923 shares issued, stated value
            
            2,311.2
            
            
            2,118.4Retained
      earnings
            
            542.1
            
            
            489.3Treasury
      stock-243,407 and 120,677 shares, at cost
            
            (6.3
            )
            
            (3.6
            )Accumulated
      other comprehensive loss
            
            (49.1
            )
            
            (53.5
            )Total
            
            2,797.9
            
            
            2,550.6Noncontrolling
      interest
            
            1.2
            
            
            1.0Total
      common shareholders' equity
            
            2,799.1
            
            
            2,551.6Cumulative
      preferred stock $100 par value3.80%
      - 100,000 shares issued
            
            10.0
            
            
            10.04.50%
      - 100,000 shares issued
            
            10.0
            
            
            10.04.20%
      - 70,000 shares issued
            
            7.0
            
            
            7.04.35%
      - 120,000 shares issued
            
            12.0
            
            
            12.0Total
            
            39.0
            
            
            39.0Long-term
      debt (Note 11)
            
            3,221.2
            
            
            2,556.6Total
            
            6,059.3
            
            
            5,147.2Commitments
      and Contingencies (Note 13)Total
            $
            8,265.8
            
            $
            7,869.3The
      accompanying Notes to Consolidated Financial Statements are an integral
      part of these statements.


7


GREAT
      PLAINS ENERGY INCORPORATEDConsolidated
      Statements of Income(Unaudited)Three
      Months Ended
            Year
      to DateSeptember
      30
            September
      302009
            2008
            2009
            2008Operating
      Revenues
            (millions,
      except per share amounts)Electric
      revenues
            $
            587.7
            
            $
            593.6
            
            $
            1,487.4
            
            $
            1,226.2Operating
      ExpensesFuel
            
            118.1
            
            
            109.7
            
            
            302.5
            
            
            222.7Purchased
      power
            
            46.1
            
            
            69.3
            
            
            140.9
            
            
            138.3Utility
      operating expenses
            
            121.6
            
            
            109.9
            
            
            338.9
            
            
            262.2Maintenance
            
            31.5
            
            
            30.9
            
            
            105.4
            
            
            89.5Depreciation
      and amortization
            
            77.9
            
            
            65.4
            
            
            220.3
            
            
            166.4General
      taxes
            
            38.4
            
            
            37.4
            
            
            106.8
            
            
            96.2Other
            
            2.9
            
            
            1.4
            
            
            10.2
            
            
            10.6Total
            
            436.5
            
            
            424.0
            
            
            1,225.0
            
            
            985.9Operating
      income
            
            151.2
            
            
            169.6
            
            
            262.4
            
            
            240.3Non-operating
      income
            
            12.7
            
            
            7.6
            
            
            37.4
            
            
            22.5Non-operating
      expenses
            
            (0.7
            )
            
            (2.7
            )
            
            (2.9
            )
            
            (5.2
            )Interest
      charges
            
            (49.0
            )
            
            (23.6
            )
            
            (133.2
            )
            
            (75.6
            )Income
      from continuing operations before income tax expenseand
      loss from equity investments
            
            114.2
            
            
            150.9
            
            
            163.7
            
            
            182.0Income
      tax expense
            
            (35.6
            )
            
            (45.9
            )
            
            (26.3
            )
            
            (68.4
            )Loss
      from equity investments, net of income taxes
            
            (0.2
            )
            
            (0.3
            )
            
            (0.4
            )
            
            (1.1
            )Income
      from continuing operations
            
            78.4
            
            
            104.7
            
            
            137.0
            
            
            112.5Income
      (loss) from discontinued operations, net of income taxes (Note
      20)
            
            0.8
            
            
            0.3
            
            
            (2.3
            )
            
            35.0Net
      income
            
            79.2
            
            
            105.0
            
            
            134.7
            
            
            147.5Less:  Net
      income attributable to noncontrolling interest
            
            (0.1
            )
            
            -
            
            
            (0.2
            )
            
            -Net
      income attributable to Great Plains Energy
            
            79.1
            
            
            105.0
            
            
            134.5
            
            
            147.5Preferred
      stock dividend requirements
            
            0.4
            
            
            0.4
            
            
            1.2
            
            
            1.2Earnings
      available for common shareholders
            $
            78.7
            
            $
            104.6
            
            $
            133.3
            
            $
            146.3Average
      number of basic common shares outstanding
            
            134.6
            
            
            113.8
            
            
            127.5
            
            
            95.3Average
      number of diluted common shares outstanding
            
            134.9
            
            
            113.9
            
            
            127.6
            
            
            95.3Basic
      earnings (loss) per common shareContinuing
      operations
            $
            0.57
            
            $
            0.92
            
            $
            1.07
            
            $
            1.17Discontinued
      operations
            
            0.01
            
            
            -
            
            
            (0.02
            )
            
            0.37Basic
      earnings per common share
            $
            0.58
            
            $
            0.92
            
            $
            1.05
            
            $
            1.54Diluted
      earnings (loss) per common shareContinuing
      operations
            $
            0.57
            
            $
            0.92
            
            $
            1.06
            
            $
            1.17Discontinued
      operations
            
            0.01
            
            
            -
            
            
            (0.02
            )
            
            0.37Diluted
      earnings per common share
            $
            0.58
            
            $
            0.92
            
            $
            1.04
            
            $
            1.54Cash
      dividends per common share
            $
            0.2075
            
            $
            0.415
            
            $
            0.6225
            
            $
            1.245The
      accompanying Notes to Consolidated Financial Statements are an integral
      part of these statements.


8


GREAT
      PLAINS ENERGY INCORPORATEDConsolidated
      Statements of Cash Flows(Unaudited)Year
      to Date September 30
            2009
            2008Cash
      Flows from Operating Activities
            (millions)Net
      income
            $
            134.7
            
            $
            147.5Adjustments
      to reconcile income to net cash from operating activities:Depreciation
      and amortization
            
            220.3
            
            
            169.7Amortization
      of:Nuclear
      fuel
            
            12.8
            
            
            10.0Other
            
            (8.0
            )
            
            2.2Deferred
      income taxes, net
            
            (4.8
            )
            
            27.4Investment
      tax credit amortization
            
            (1.7
            )
            
            (1.3
            )Loss
      from equity investments, net of income taxes
            
            0.4
            
            
            1.1Fair
      value impacts from energy contracts - Strategic Energy
            
            -
            
            
            (189.1
            )Fair
      value impacts from interest rate hedging
            
            -
            
            
            9.2Loss
      on sale of Strategic Energy
            
            -
            
            
            116.2Other
      operating activities (Note 3)
            
            (91.9
            )
            
            33.1Net
      cash from operating activities
            
            261.8
            
            
            326.0Cash
      Flows from Investing ActivitiesUtility
      capital expenditures
            
            (683.6
            )
            
            (702.3
            )Allowance
      for borrowed funds used during construction
            
            (28.4
            )
            
            (20.3
            )Payment
      to Black Hills for asset sale working capital adjustment
            
            (7.7
            )
            
            -Proceeds
      from sale of Strategic Energy, net of cash sold
            
            -
            
            
            216.4GMO
      acquisition, net cash received
            
            -
            
            
            271.9Purchases
      of nuclear decommissioning trust investments
            
            (36.1
            )
            
            (35.1
            )Proceeds
      from nuclear decommissioning trust investments
            
            33.4
            
            
            32.4Other
      investing activities
            
            (2.5
            )
            
            (9.8
            )Net
      cash from investing activities
            
            (724.9
            )
            
            (246.8
            )Cash
      Flows from Financing ActivitiesIssuance
      of common stock
            
            217.9
            
            
            8.3Issuance
      of long-term debt
            
            700.5
            
            
            354.5Issuance
      fees
            
            (22.7
            )
            
            (4.5
            )Repayment
      of long-term debt
            
            (2.0
            )
            
            (169.2
            )Net
      change in short-term borrowings
            
            (390.2
            )
            
            (174.1
            )Dividends
      paid
            
            (82.0
            )
            
            (122.2
            )Credit
      facility termination fees
            
            -
            
            
            (12.5
            )Other
      financing activities
            
            (3.0
            )
            
            (2.3
            )Net
      cash from financing activities
            
            418.5
            
            
            (122.0
            )Net
      Change in Cash and Cash Equivalents
            
            (44.6
            )
            
            (42.8
            )Cash and Cash Equivalents at
      Beginning of Year (includes $43.1million
      of cash included in assets of discontinued operations in
    2008)
            
            61.1
            
            
            67.1Cash
      and Cash Equivalents at End of Period
            $
            16.5
            
            $
            24.3The
      accompanying Notes to Consolidated Financial Statements are an integral
      part of these statements.


9


GREAT
      PLAINS ENERGY INCORPORATEDConsolidated
      Statements of Common Shareholders' Equity(Unaudited)Year
      to Date September 30
            2009
            2008Shares
            Amount
            Shares
            AmountCommon
      Stock
            (millions,
      except share amounts)Beginning
      balance
            
            119,375,923
            
            $
            2,118.4
            
            
            86,325,136
            
            $
            1,065.9Issuance
      of common stock
            
            15,781,851
            
            
            218.2
            
            
            32,587,486
            
            
            1,034.9Common
      stock issuance fees
            
            -
            
            
            (7.0
            )
            
            -
            
            
            -Issuance
      of restricted common stock
            
            376,667
            
            
            5.4
            
            
            88,064
            
            
            2.3Equity
      compensation expense, net of forfeitures
            
            
            
            
            0.9
            
            
            
            
            
            5.2Unearned
      CompensationIssuance
      of restricted common stock
            
            
            
            
            (5.4
            )
            
            
            
            
            (2.3
            )Forfeiture
      of restricted common stock
            
            
            
            
            1.0
            
            
            
            
            
            -Compensation
      expense recognized
            
            
            
            
            2.7
            
            
            
            
            
            4.2Equity
      Units allocated fees and expenses and thepresent
      value of contract adjustment payments
            
            
            
            
            (22.5
            )
            
            
            
            
            -Other
            
            
            
            
            (0.5
            )
            
            
            
            
            (0.3
            )Ending
      balance
            
            135,534,441
            
            
            2,311.2
            
            
            119,000,686
            
            
            2,109.9Retained
      EarningsBeginning
      balance
            
            
            
            
            489.3
            
            
            
            
            
            506.9Net
      income attributable to Great Plains Energy
            
            
            
            
            134.5
            
            
            
            
            
            147.5Dividends:Common
      stock
            
            
            
            
            (80.8
            )
            
            
            
            
            (121.0
            )Preferred
      stock - at required rates
            
            
            
            
            (1.2
            )
            
            
            
            
            (1.2
            )Performance
      shares
            
            
            
            
            (0.1
            )
            
            
            
            
            (0.3
            )Performance
      shares amendment
            
            
            
            
            0.4
            
            
            
            
            
            -Ending
      balance
            
            
            
            
            542.1
            
            
            
            
            
            531.9Treasury
      StockBeginning
      balance
            
            (120,677
            )
            
            (3.6
            )
            
            (90,929
            )
            
            (2.8
            )Treasury
      shares acquired
            
            (125,488
            )
            
            (2.8
            )
            
            (39,856
            )
            
            (1.1
            )Treasury
      shares reissued
            
            2,758
            
            
            0.1
            
            
            9,215
            
            
            0.3Ending
      balance
            
            (243,407
            )
            
            (6.3
            )
            
            (121,570
            )
            
            (3.6
            )Accumulated
      Other Comprehensive Income (Loss)Beginning
      balance
            
            
            
            
            (53.5
            )
            
            
            
            
            (2.1
            )Derivative
      hedging activity, net of tax
            
            
            
            
            4.2
            
            
            
            
            
            (20.3
            )Change
      in unrecognized pension expense, net of tax
            
            
            
            
            0.2
            
            
            
            
            
            0.3Ending
      balance
            
            
            
            
            (49.1
            )
            
            
            
            
            (22.1
            )Total
      Great Plains Energy Common Shareholders' Equity
            
            
            2,797.9
            
            
            
            
            
            2,616.1Noncontrolling
      InterestBeginning
      balance
            
            
            
            
            1.0
            
            
            
            
            
            -Net
      income attributable to noncontrolling interest
            
            
            
            
            0.2
            
            
            
            
            
            -Ending
      balance
            
            
            
            
            1.2
            
            
            
            
            
            -Total
      Common Shareholders' Equity
            
            
            
            $
            2,799.1
            
            
            
            
            $
            2,616.1The
      accompanying Notes to Consolidated Financial Statements are an integral
      part of these statements.


10


GREAT
      PLAINS ENERGY INCORPORATEDConsolidated
      Statements of Comprehensive Income(Unaudited)Three
      Months Ended
            Year
      to DateSeptember
      30
            September
      302009
            2008
            2009
            2008(millions)Net
      income
            $
            79.2
            
            $
            105.0
            
            $
            134.7
            
            $
            147.5Other
      comprehensive income (loss)Gain
      (loss) on derivative hedging instruments
            
            (0.6
            )
            
            (9.0
            )
            
            0.1
            
            
            72.3Income
      tax benefit (expense)
            
            0.2
            
            
            3.5
            
            
            -
            
            
            (30.1
            )Net
      gain (loss) on derivative hedging instruments
            
            (0.4
            )
            
            (5.5
            )
            
            0.1
            
            
            42.2Reclassification
      to expenses, net of tax
            
            2.1
            
            
            (0.4
            )
            
            4.1
            
            
            (62.5
            )Derivative
      hedging activity, net of tax
            
            1.7
            
            
            (5.9
            )
            
            4.2
            
            
            (20.3
            )Defined
      benefit pension plansAmortization
      of net gains included in net periodicbenefit
      costs
            
            0.1
            
            
            -
            
            
            0.3
            
            
            0.2Less:  amortization
      of prior service costs included in netperiodic
      benefit costs
            
            -
            
            
            0.1
            
            
            -
            
            
            0.1Income
      tax expense
            
            -
            
            
            -
            
            
            (0.1
            )
            
            -Net
      change in unrecognized pension expense
            
            0.1
            
            
            0.1
            
            
            0.2
            
            
            0.3Comprehensive
      income
            
            81.0
            
            
            99.2
            
            
            139.1
            
            
            127.5Less:  comprehensive
      income attributable to noncontrolling interest
            
            (0.1
            )
            
            -
            
            
            (0.2
            )
            
            -Comprehensive
      income attributable to Great Plains Energy
            $
            80.9
            
            $
            99.2
            
            $
            138.9
            
            $
            127.5The
      accompanying Notes to Consolidated Financial Statements are an integral
      part of these statements.


11


KANSAS
      CITY POWER & LIGHT COMPANYConsolidated
      Balance Sheets(Unaudited)September
      30
            December
      312009
            2008ASSETS
            (millions,
      except share amounts)Current
      AssetsCash
      and cash equivalents
            $
            4.2
            
            $
            5.4Funds
      on deposit
            
            0.4
            
            
            -Receivables,
      net
            
            145.5
            
            
            161.6Fuel
      inventories, at average cost
            
            51.1
            
            
            51.7Materials
      and supplies, at average cost
            
            79.7
            
            
            68.3Deferred
      refueling outage costs
            
            8.1
            
            
            12.4Refundable
      income taxes
            
            -
            
            
            11.9Deferred
      income taxes
            
            5.4
            
            
            4.9Derivative
      instruments
            
            -
            
            
            0.6Prepaid
      expenses
            
            8.5
            
            
            11.8Total
            
            302.9
            
            
            328.6Nonutility
      Property and InvestmentsNuclear
      decommissioning trust fund
            
            109.7
            
            
            96.9Other
            
            5.1
            
            
            3.7Total
            
            114.8
            
            
            100.6Utility
      Plant, at Original CostElectric
            
            6,193.1
            
            
            5,671.4Less-accumulated
      depreciation
            
            2,843.3
            
            
            2,738.8Net
      utility plant in service
            
            3,349.8
            
            
            2,932.6Construction
      work in progress
            
            1,076.6
            
            
            1,148.5Nuclear
      fuel, net of amortization of $123.6 and $110.8
            
            71.1
            
            
            63.9Total
            
            4,497.5
            
            
            4,145.0Deferred
      Charges and Other AssetsRegulatory
      assets
            
            597.0
            
            
            609.1Other
            
            43.1
            
            
            45.5Total
            
            640.1
            
            
            654.6Total
            $
            5,555.3
            
            $
            5,228.8The
      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
      Balance Sheets(Unaudited)September
      30
            December
      312009
            2008LIABILITIES
      AND CAPITALIZATION
            (millions,
      except share amounts)Current
      LiabilitiesCommercial
      paper
            $
            38.0
            
            $
            380.2Current
      maturities of long-term debt
            
            0.2
            
            
            -Accounts
      payable
            
            216.4
            
            
            299.3Accrued
      taxes
            
            76.6
            
            
            20.5Accrued
      interest
            
            37.0
            
            
            18.1Accrued
      compensation and benefits
            
            39.4
            
            
            29.7Pension
      and post-retirement liability
            
            1.6
            
            
            1.6Derivative
      instruments
            
            -
            
            
            80.3Other
            
            8.2
            
            
            9.1Total
            
            417.4
            
            
            838.8Deferred
      Credits and Other LiabilitiesDeferred
      income taxes
            
            550.0
            
            
            596.2Deferred
      tax credits
            
            127.2
            
            
            99.9Asset
      retirement obligations
            
            118.0
            
            
            111.9Pension
      and post-retirement liability
            
            432.2
            
            
            410.6Regulatory
      liabilities
            
            124.5
            
            
            115.8Other
            
            77.9
            
            
            56.8Total
            
            1,429.8
            
            
            1,391.2CapitalizationCommon
      shareholder's equityCommon
      stock-1,000 shares authorized without par value1
      share issued, stated value
            
            1,563.1
            
            
            1,315.6Retained
      earnings
            
            408.1
            
            
            353.2Accumulated
      other comprehensive loss
            
            (42.9
            )
            
            (46.9
            )Total
            
            1,928.3
            
            
            1,621.9Long-term
      debt (Note 11)
            
            1,779.8
            
            
            1,376.9Total
            
            3,708.1
            
            
            2,998.8Commitments
      and Contingencies (Note 13)Total
            $
            5,555.3
            
            $
            5,228.8The
      disclosures regarding KCP&L included in the accompanying Notes to
      Consolidated Financial Statementsare
      an integral part of these
statements.


13


KANSAS
      CITY POWER & LIGHT COMPANYConsolidated
      Statements of Income(Unaudited)Three
      Months Ended
            Year
      to DateSeptember
      30
            September
      302009
            2008
            2009
            2008Operating
      Revenues
            (millions)Electric
      revenues
            $
            395.5
            
            $
            423.7
            
            $
            997.8
            
            $
            1,056.3Operating
      ExpensesFuel
            
            70.5
            
            
            79.6
            
            
            183.3
            
            
            192.6Purchased
      power
            
            19.8
            
            
            31.3
            
            
            58.6
            
            
            100.3Operating
      expenses
            
            86.6
            
            
            79.4
            
            
            238.6
            
            
            231.7Maintenance
            
            20.8
            
            
            21.3
            
            
            72.1
            
            
            78.1Depreciation
      and amortization
            
            59.3
            
            
            51.4
            
            
            166.1
            
            
            152.4General
      taxes
            
            32.6
            
            
            32.8
            
            
            90.2
            
            
            91.2Other
            
            -
            
            
            -
            
            
            (0.1
            )
            
            0.2Total
            
            289.6
            
            
            295.8
            
            
            808.8
            
            
            846.5Operating
      income
            
            105.9
            
            
            127.9
            
            
            189.0
            
            
            209.8Non-operating
      income
            
            8.6
            
            
            7.7
            
            
            24.7
            
            
            16.7Non-operating
      expenses
            
            (0.2
            )
            
            (1.2
            )
            
            (2.3
            )
            
            (3.7
            )Interest
      charges
            
            (22.3
            )
            
            (16.6
            )
            
            (62.7
            )
            
            (53.3
            )Income
      before income tax expense
            
            92.0
            
            
            117.8
            
            
            148.7
            
            
            169.5Income
      tax expense
            
            (26.4
            )
            
            (33.9
            )
            
            (39.8
            )
            
            (60.7
            )Net
      income
            $
            65.6
            
            $
            83.9
            
            $
            108.9
            
            $
            108.8The
      disclosures regarding KCP&L included in the accompanying Notes to
      Consolidated Financial Statements are an integral partof
      these statements.


14


KANSAS
      CITY POWER & LIGHT COMPANYConsolidated
      Statements of Cash Flows(Unaudited)Year
      to Date September 30
            2009
            2008Cash
      Flows from Operating Activities
            (millions)Net
      income
            $
            108.9
            
            $
            108.8Adjustments
      to reconcile income to net cash from operating activities:Depreciation
      and amortization
            
            166.1
            
            
            152.4Amortization
      of:Nuclear
      fuel
            
            12.8
            
            
            10.0Other
            
            13.9
            
            
            7.6Deferred
      income taxes, net
            
            (49.6
            )
            
            (3.6
            )Investment
      tax credit amortization
            
            (1.1
            )
            
            (1.1
            )Other
      operating activities (Note 3)
            
            32.9
            
            
            24.5Net
      cash from operating activities
            
            283.9
            
            
            298.6Cash
      Flows from Investing ActivitiesUtility
      capital expenditures
            
            (520.6
            )
            
            (605.2
            )Allowance
      for borrowed funds used during construction
            
            (23.6
            )
            
            (15.9
            )Purchases
      of nuclear decommissioning trust investments
            
            (36.1
            )
            
            (35.1
            )Proceeds
      from nuclear decommissioning trust investments
            
            33.4
            
            
            32.4Other
      investing activities
            
            1.5
            
            
            (8.9
            )Net
      cash from investing activities
            
            (545.4
            )
            
            (632.7
            )Cash
      Flows from Financing ActivitiesIssuance
      of long-term debt
            
            413.0
            
            
            354.5Issuance
      fees
            
            (4.0
            )
            
            (4.2
            )Net
      change in short-term borrowings
            
            (342.2
            )
            
            (111.1
            )Dividends
      paid to Great Plains Energy
            
            (54.0
            )
            
            (108.0
            )Equity
      contribution from Great Plains Energy
            
            247.5
            
            
            200.0Net
      cash from financing activities
            
            260.3
            
            
            331.2Net
      Change in Cash and Cash Equivalents
            
            (1.2
            )
            
            (2.9
            )Cash
      and Cash Equivalents at Beginning of Year
            
            5.4
            
            
            3.2Cash
      and Cash Equivalents at End of Period
            $
            4.2
            
            $
            0.3The
      disclosures regarding KCP&L included in the accompanying Notes to
      Consolidated FinancialStatements
      are an integral part of these
statements.


15


KANSAS
      CITY POWER & LIGHT COMPANYConsolidated
      Statements of Common Shareholder's Equity(Unaudited)Year
      to Date September 30
            2009
            2008Shares
            Amount
            Shares
            AmountCommon
      Stock
            (millions,
      except share amounts)Beginning
      balance
            1
            
            $
            1,315.6
            
            1
            
            $
            1,115.6Equity
      contribution from Great Plains Energy
            
            
            
            247.5
            
            
            
            
            200.0Ending
      balance
            1
            
            
            1,563.1
            
            1
            
            
            1,315.6Retained
      EarningsBeginning
      balance
            
            
            
            353.2
            
            
            
            
            371.3Net
      income
            
            
            
            108.9
            
            
            
            
            108.8Transfer
      of HSS to KLT Inc.
            
            
            
            -
            
            
            
            
            0.7Dividends:Common
      stock held by Great Plains Energy
            
            
            
            (54.0
            )
            
            
            
            (108.0
            )Ending
      balance
            
            
            
            408.1
            
            
            
            
            372.8Accumulated
      Other Comprehensive Income (Loss)Beginning
      balance
            
            
            
            (46.9
            )
            
            
            
            (7.5
            )Derivative
      hedging activity, net of tax
            
            
            
            4.0
            
            
            
            
            (6.6
            )Ending
      balance
            
            
            
            (42.9
            )
            
            
            
            (14.1
            )Total
      Common Shareholder's Equity
            
            
            $
            1,928.3
            
            
            
            $
            1,674.3The
      disclosures regarding KCP&L included in the accompanying Notes to
      Consolidated Financial Statements are anintegral
      part of these statements.


16


KANSAS
      CITY POWER & LIGHT COMPANYConsolidated
      Statements of Comprehensive Income(Unaudited)Three
      Months Ended
            Year
      to DateSeptember
      30
            September
      302009
            2008
            2009
            2008(millions)Net
      income
            $
            65.6
            
            $
            83.9
            
            $
            108.9
            
            $
            108.8Other
      comprehensive income (loss)Gain
      (loss) on derivative hedging instruments
            
            (0.6
            )
            
            (2.6
            )
            
            0.1
            
            
            (10.5
            )Income
      tax benefit
            
            0.2
            
            
            1.1
            
            
            -
            
            
            4.3Net
      gain (loss) on derivative hedging instruments
            
            (0.4
            )
            
            (1.5
            )
            
            0.1
            
            
            (6.2
            )Reclassification
      to expenses, net of tax
            
            2.0
            
            
            (0.5
            )
            
            3.9
            
            
            (0.4
            )Derivative
      hedging activity, net of tax
            
            1.6
            
            
            (2.0
            )
            
            4.0
            
            
            (6.6
            )Comprehensive
      income
            $
            67.2
            
            $
            81.9
            
            $
            112.9
            
            $
            102.2The
      disclosures regarding KCP&L included in the accompanying Notes to
      Consolidated Financial Statements are anintegral
      part of these statements. 17


GREAT
PLAINS ENERGY INCORPORATED


KANSAS
CITY POWER & LIGHT COMPANY




Notes
to Unaudited Consolidated Financial Statements




The notes
to unaudited 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 as
follows:




·
            KCP&L
      is an integrated, regulated electric utility that provides electricity to
      customers primarily in the states of Missouri and
      Kansas.  KCP&L has one active wholly owned subsidiary,
      Kansas City Power & Light Receivables Company (Receivables
      Company).




·
            KCP&L
      Greater Missouri Operations Company (GMO) is an integrated, regulated
      electric utility that primarily provides electricity to customers in the
      state of Missouri.  GMO also provides regulated steam service to
      certain customers in the St. Joseph, Missouri area.  GMO wholly
      owns MPS Merchant Services, Inc. (MPS Merchant), which has certain
      long-term natural gas contracts remaining from its former non-regulated
      trading operations.  Great Plains Energy acquired GMO on July
      14, 2008.  See Note 2 to the consolidated financial statements
      for additional information.




·
            Great
      Plains Energy Services Incorporated (Services) obtains certain goods and
      third-party services for its affiliated companies.  On December
      16, 2008, Services employees were transferred to
  KCP&L.




·
            KLT
      Inc. is an intermediate holding company that primarily holds investments
      in affordable housing limited
partnerships.




Great
Plains Energy’s sole reportable business segment is electric
utility.  See Note 19 for additional information.




Basic
and Diluted Earnings (Loss) per Common Share Calculation


To
determine basic EPS, preferred stock dividend requirements and net income
attributable to noncontrolling interest 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
performance shares, restricted stock, stock options and Equity
Units.


18


The
following table reconciles Great Plains Energy’s basic and diluted EPS from
continuing operations.


Three
      Months Ended
            
            
            Year
      to DateSeptember
      30
            
            
            September
      302009
            
            
            2008
            
            
            2009
            
            
            2008Income
            
            (millions,
      except per share amounts)Income
      from continuing operations
            
            $
            78.4
            
            
            $
            104.7
            
            
            $
            137.0
            
            
            $
            112.5Less:
      net income attributable to noncontrolling interest
            
            
            0.1
            
            
            
            -
            
            
            
            0.2
            
            
            
            -Less:
      preferred stock dividend requirements
            
            
            0.4
            
            
            
            0.4
            
            
            
            1.2
            
            
            
            1.2Income
      available for common shareholders
            
            $
            77.9
            
            
            $
            104.3
            
            
            $
            135.6
            
            
            $
            111.3Common
      Shares OutstandingAverage
      number of common shares outstanding
            
            
            134.6
            
            
            
            113.8
            
            
            
            127.5
            
            
            
            95.3Add:
      effect of dilutive securities
            
            
            0.3
            
            
            
            0.1
            
            
            
            0.1
            
            
            
            -Diluted
      average number of common shares outstanding
            
            
            134.9
            
            
            
            113.9
            
            
            
            127.6
            
            
            
            95.3Basic
      EPS from continuing operations
            
            $
            0.57
            
            
            $
            0.92
            
            
            $
            1.07
            
            
            $
            1.17Diluted
      EPS from continuing operations
            
            $
            0.57
            
            
            $
            0.92
            
            
            $
            1.06
            
            
            $
            1.17


The
computation of diluted EPS for the three months ended September 30, 2009,
excludes anti-dilutive shares consisting of 68,310 performance shares, 267,685
restricted stock shares and 247,383 stock options.





The
computation of diluted EPS year to date September 30, 2009, excludes
anti-dilutive shares consisting of 68,310 performance shares, 439,585 restricted
stock shares, 247,383 stock options and 5.8 million Equity Units.





The
computation of diluted EPS for the three months ended September 30, 2008,
excludes anti-dilutive shares consisting of 314,511 performance shares, 458,796
restricted stock shares and 329,055 stock options.  The computation of
diluted EPS year to date September 30, 2008, excludes anti-dilutive shares
consisting of 364,217 performance shares, 518,159 restricted stock shares and
272,055 stock options.





Dividends
Declared


In
October 2009, Great Plains Energy’s Board of Directors declared a quarterly
dividend of $0.2075 per share on Great Plains Energy’s common
stock.  The common dividend is payable December 21, 2009, to
shareholders of record as of November 30, 2009.  The Board of
Directors also declared regular dividends on Great Plains Energy’s preferred
stock, payable March 1, 2010, to shareholders of record as of February 5,
2010.




2.
            GMO
      ACQUISITION




On July
14, 2008, Great Plains Energy closed its acquisition of GMO.  The
total purchase price of the acquisition was approximately $1.7
billion.  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.  Immediately prior to Great Plains Energy’s acquisition
of GMO, Black Hills Corporation (Black Hills) acquired GMO’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 GMO, including its Missouri-based utility operations consisting of
the Missouri Public Service and St. Joseph Light & Power
divisions.  GMO is included in Great Plains Energy’s consolidated
financial statements beginning as of July 14, 2008.




The
regulatory approval order from the Public Service Commission of the State of
Missouri (MPSC) was received on July 1, 2008.  Certain parties filed
appeals and a motion to stay the order with the Cole County, Missouri, Circuit
Court, which affirmed the order in June 2009.  This decision has been
appealed.  The order remains in effect unless reversed by the
courts.


19


The MPSC
order provided for the deferral of transition costs to be amortized over a
five-year period to the extent that synergy savings exceed
amortization.  The Company settled its first post-transaction rate
cases and the settlement agreements were silent with respect to transition
costs.  The Company will continue to defer transition costs until
amortization is ordered by the MPSC.  The State Corporation Commission
of the State of Kansas (KCC) order approved the deferral of up to $10.0 million
of transition costs to be amortized over a five-year period beginning with rates
expected to be effective in 2010.  At September 30, 2009, Great Plains
Energy had $51.1 million of regulatory assets related to transition costs, which
included $29.1 million at KCP&L and $22.0 million at GMO.




The
acquisition was accounted for under the purchase method of
accounting.  As a result, the assets and liabilities of GMO were
recorded at their estimated fair values as of July 14, 2008.  The
following table shows the allocation of the purchase price to the assets
acquired and liabilities assumed at the date of the acquisition.


July
      142008Purchase
      Price Allocation
            
            (millions)Cash
            
            $
            677.7Common
      stock (32.2 million shares)
            
            
            1,026.1
            (a)Stock
      options (0.5 million options)
            
            
            2.7
            (b)Transaction
      costs
            
            
            
            35.6Total
      purchase price
            
            
            1,742.1Cash
      and cash equivalents
            
            
            949.6Receivables
            
            
            159.1Deferred
      income taxes
            
            
            511.0Other
      current assets
            
            
            131.4Utility
      plant, net
            
            
            1,627.4Nonutility
      property and investments
            
            
            131.4Regulatory
      assets
            
            
            146.6Other
      long-term assets
            
            
            
            76.0Total
      assets acquired
            
            
            3,732.5Current
      liabilities
            
            
            311.8Regulatory
      liabilities
            
            
            115.9Deferred
      income taxes
            
            
            241.5Long-term
      debt
            
            
            1,334.2Other
      long-term liabilities
            
            
            
            156.0Net
      assets acquired
            
            
            1,573.1Goodwill
            
            $
            169.0(a)The
      fair value was based on the average closing price of Great Plains Energy
      common stockof
      $31.88, the average during the period beginning two trading days before
      and ending twotrading
      days after February 7, 2007, the announcement of the acquisition, net of
      issuing costs.(b)The
      fair value was calculated by multiplying the stock options outstanding at
      July 14,2008,
      by the option exchange ratio of 0.1569, calculated as defined in the
      merger agreement.




Great
Plains Energy recorded $169.0 million of goodwill, all of which is included in
the electric utility segment.  None of the goodwill is tax
deductible.  The factors that contributed to a purchase price that
resulted in goodwill were strategic considerations and significant cost savings
and synergies including: expanded regulated electric utility business; adjacent
regulated electric utility territories; increased GMO financial strength and
flexibility; improved reliability and customer service and disposition of
non-strategic gas operations.  Changes to the initial allocation of
the purchase price consisted primarily of additional fair value adjustments to
certain real estate


20


properties,
increased unrecognized tax benefits related to prior year tax positions on GMO
tax returns, adjustment to regulatory assets due to the settlement of regulatory
treatment and net operating loss valuation allowance adjustments.




Goodwill
is required to be tested for impairment at least annually and more frequently
when indicators of impairment exist.  The goodwill impairment test is
a two step process, the first step of which is the comparison of the fair value
of a reporting unit to its carrying amount, including goodwill, to identify
potential impairment.  If the carrying amount exceeds the fair value
of the reporting unit, the second step of the test is performed, consisting of
assignment of the reporting unit’s fair value to its assets and liabilities to
determine an implied fair value of goodwill which is compared to the carrying
amount of goodwill to determine the impairment loss, if any, to be recognized in
the financial statements.  The annual impairment test for the GMO
acquisition goodwill was conducted on September 1, 2009.  The
determination of fair value of the reporting units consisted of two valuation
techniques: an income approach consisting of a discounted cash flow analysis and
a market approach consisting of a determination of reporting unit invested
capital using market multiples derived from the historical revenue, EBITDA and
net utility asset values and market prices of stock of electric and gas company
regulated peers.  The results of the two techniques were evaluated and
weighted to determine a point within the range that management considered
representative of fair value for the reporting units.  Fair value of
the reporting unit exceeded the carrying amount, including goodwill; therefore,
there was no impairment of goodwill.




The
following table provides unaudited pro forma results of operations for Great
Plains Energy for the three months ended and year to date September 30, 2008, as
if the acquisition had occurred January 1, 2008.  Pro forma results
are not necessarily indicative of the actual results that would have resulted
had the acquisition actually occurred on January 1, 2008.


Three
      Months
            
            Year
      toEnded
            
            DateSeptember
      30, 2008(millions,
      except per share amounts)Operating
      revenues
            
            $
            624.7
            
            
            $
            1,569.7Income
      from continuing operations
            
            $
            102.0
            
            
            $
            114.2Net
      income
            
            $
            102.3
            
            
            $
            149.2Earnings
      available for common shareholders
            
            $
            101.9
            
            
            $
            148.0Basic
      and diluted earnings per common share fromcontinuing
      operations
            
            $
            0.89
            
            
            $
            1.19Basic
      and diluted earnings per common share
            
            $
            0.89
            
            
            $
            1.56


21


3.
            SUPPLEMENTAL
      CASH FLOW INFORMATION




Great
      Plains Energy Other Operating ActivitiesYear
      to Date September 30
            
            2009
            
            
            2008Cash
      flows affected by changes in:
            
            (millions)Receivables
            
            $
            7.9
            
            
            $
            9.8Fuel
      inventories
            
            
            (3.1
            )
            
            
            (0.9
            )Materials
      and supplies
            
            
            (16.1
            )
            
            
            (2.7
            )Accounts
      payable
            
            
            (122.2
            )
            
            
            (1.4
            )Accrued
      taxes
            
            
            85.7
            
            
            
            116.4Accrued
      interest
            
            
            1.9
            
            
            
            19.2Deferred
      refueling outage costs
            
            
            4.3
            
            
            
            (8.8
            )Accrued
      plant maintenance costs
            
            
            2.2
            
            
            
            1.2Fuel
      adjustment clauses
            
            
            3.1
            
            
            
            (5.6
            )Pension
      and post-retirement benefit obligations
            
            
            43.0
            
            
            
            6.3Allowance
      for equity funds used during construction
            
            
            (29.6
            )
            
            
            (14.3
            )Deferred
      acquisition costs
            
            
            -
            
            
            
            (13.2
            )Forward
      Starting Swaps settlement
            
            
            (79.1
            )
            
            
            -T-Lock
      settlement
            
            
            -
            
            
            
            (41.2
            )Other
            
            
            10.1
            
            
            
            (31.7
            )Total
      other operating activities
            
            $
            (91.9
            )
            
            $
            33.1Cash
      paid during the period:Interest
            
            $
            162.8
            
            
            $
            50.9Income
      taxes
            
            $
            4.7
            
            
            $
            19.0Non-cash
      investing activities:Liabilities
      assumed for capital expenditures
            
            $
            56.8
            
            
            $
            73.5


KCP&L
      Other Operating ActivitiesYear
      to Date September 30
            
            2009
            
            
            2008Cash
      flows affected by changes in:
            
            (millions)Receivables
            
            $
            6.7
            
            
            $
            9.5Fuel
      inventories
            
            
            0.6
            
            
            
            (5.7
            )Materials
      and supplies
            
            
            (11.4
            )
            
            
            (3.4
            )Accounts
      payable
            
            
            (49.3
            )
            
            
            12.6Accrued
      taxes
            
            
            96.4
            
            
            
            102.1Accrued
      interest
            
            
            18.9
            
            
            
            12.5Deferred
      refueling outage costs
            
            
            4.3
            
            
            
            (8.8
            )Pension
      and post-retirement benefit obligations
            
            
            51.5
            
            
            
            -Allowance
      for equity funds used during construction
            
            
            (22.6
            )
            
            
            (14.3
            )Kansas
      Energy Cost Adjustment
            
            
            (0.2
            )
            
            
            (5.5
            )Forward
      Starting Swaps settlement
            
            
            (79.1
            )
            
            
            -T-Lock
      settlement
            
            
            -
            
            
            
            (41.2
            )Other
            
            
            17.1
            
            
            
            (33.3
            )Total
      other operating activities
            
            $
            32.9
            
            
            $
            24.5Cash
      paid during the period:Interest
            
            $
            44.0
            
            
            $
            40.7Income
      taxes
            
            $
            -
            
            
            $
            4.0Non-cash
      investing activities:Liabilities
      assumed for capital expenditures
            
            $
            55.2
            
            
            $
            67.4


22


Significant
Non-Cash Items


On July
14, 2008, Great Plains Energy closed its acquisition of GMO.  The
total purchase price of the acquisition was approximately $1.7
billion.  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.  See Note 2 for additional information.
  Year to
date September 30, 2008, KCP&L recorded a $15.6 million net 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 and an update
to the cost estimates to decommission Wolf Creek Generating Station (Wolf
Creek).  This activity had no impact on Great Plains Energy’s or
KCP&L’s 2008 cash flows.
  4.
              RECEIVABLES
  Great
Plains Energy’s and KCP&L’s receivables are detailed in the following
table.


September
      30
            December
      312009
            2008Great
      Plains Energy
            (millions)Customer
      accounts receivable - billed
            $       63.7
            
            
            
            $       61.3Customer
      accounts receivable - unbilled
            67.2
            
            
            
            69.9Allowance
      for doubtful accounts
            (3.4
            )
            
            
            (3.5)Other
      receivables
            102.7
            
            
            
            114.6Total
            $     230.2
            
            
            
            $     242.3KCP&LCustomer
      accounts receivable - billed
            $         5.2
            
            
            
            $       15.5Customer
      accounts receivable - unbilled
            44.8
            
            
            
            41.7Allowance
      for doubtful accounts
            (2.1
            )
            
            
            (1.2)Intercompany
      receivables
            16.5
            
            
            
            28.5Other
      receivables
            81.1
            
            
            
            77.1Total
            $     145.5
            
            
            
            $     161.6


Great
Plains Energy’s and KCP&L’s other receivables at September 30, 2009, and
December 31, 2008, 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
Generally Accepted Accounting Principles (GAAP) for transfers and servicing of
assets, 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 $95.0 million and $70.0
million at September 30, 2009 and December 31, 2008,
respectively.  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 in July 2009
and expires in July 2010.
 23
  Information
regarding KCP&L’s sale of accounts receivable to Receivables Company is
reflected in the following tables.


Receivables
            ConsolidatedThree
      Months Ended September 30, 2009
            
            KCP&L
            
            Company
            KCP&L(millions)Receivables
      (sold) purchased
            
            $
            (354.2
            )
            
            $
            354.2
            
            
            $
            -Gain
      (loss) on sale of accounts receivable (a)
            
            
            (4.5
            )
            
            
            4.4
            
            
            
            (0.1
            )Servicing
      fees
            
            
            0.9
            
            
            
            (0.9
            )
            
            
            -Fees
      to outside investor
            
            
            -
            
            
            
            (0.4
            )
            
            
            (0.4
            )Cash
      flows during the periodCash
      from customers transferred to Receivables Company
            
            
            (352.5
            )
            
            
            352.5
            
            
            
            -Cash
      paid to KCP&L for receivables purchased
            
            
            348.1
            
            
            
            (348.1
            )
            
            
            -Servicing
      fees
            
            
            0.9
            
            
            
            (0.9
            )
            
            
            -Interest
      on intercompany note
            
            
            0.1
            
            
            
            (0.1
            )
            
            
            -


Receivables
            ConsolidatedYear
      to Date September 30, 2009
            
            KCP&L
            
            Company
            KCP&L(millions)Receivables
      (sold) purchased
            
            $
            (892.0
            )
            
            $
            892.0
            
            
            $
            -Gain
      (loss) on sale of accounts receivable (a)
            
            
            (11.3
            )
            
            
            11.0
            
            
            
            (0.3
            )Servicing
      fees
            
            
            2.4
            
            
            
            (2.4
            )
            
            
            -Fees
      to outside investor
            
            
            -
            
            
            
            (0.9
            )
            
            
            (0.9
            )Cash
      flows during the periodCash
      from customers transferred to Receivables Company
            
            
            (880.3
            )
            
            
            880.3
            
            
            
            -Cash
      paid to KCP&L for receivables purchased
            
            
            869.3
            
            
            
            (869.3
            )
            
            
            -Servicing
      fees
            
            
            2.4
            
            
            
            (2.4
            )
            
            
            -Interest
      on intercompany note
            
            
            0.3
            
            
            
            (0.3
            )
            
            
            -


24


Receivables
            ConsolidatedThree
      Months Ended September 30, 2008
            
            KCP&L
            
            Company
            KCP&L(millions)Receivables
      (sold) purchased
            
            $
            (372.6
            )
            
            $
            372.6
            
            
            $
            -Gain
      (loss) on sale of accounts receivable (a)
            
            
            (4.7
            )
            
            
            4.5
            
            
            
            (0.2
            )Servicing
      fees
            
            
            1.0
            
            
            
            (1.0
            )
            
            
            -Fees
      to outside investor
            
            
            -
            
            
            
            (0.6
            )
            
            
            (0.6
            )Cash
      flows during the periodCash
      from customers transferred to Receivables Company
            
            
            (363.8
            )
            
            
            363.8
            
            
            
            -Cash
      paid to KCP&L for receivables purchased
            
            
            359.3
            
            
            
            (359.3
            )
            
            
            -Servicing
      fees
            
            
            1.0
            
            
            
            (1.0
            )
            
            
            -Interest
      on intercompany note
            
            
            0.8
            
            
            
            (0.8
            )
            
            
            -


Receivables
            ConsolidatedYear
      to Date September 30, 2008
            
            KCP&L
            
            Company
            KCP&L(millions)Receivables
      (sold) purchased
            
            $
            (896.2
            )
            
            $
            896.2
            
            
            $
            -Gain
      (loss) on sale of accounts receivable (a)
            
            
            (11.3
            )
            
            
            10.9
            
            
            
            (0.4
            )Servicing
      fees
            
            
            2.4
            
            
            
            (2.4
            )
            
            
            -Fees
      to outside investor
            
            
            -
            
            
            
            (1.9
            )
            
            
            (1.9
            )Cash
      flows during the periodCash
      from customers transferred to Receivables Company
            
            
            (873.9
            )
            
            
            873.9
            
            
            
            -Cash
      paid to KCP&L for receivables purchased
            
            
            863.0
            
            
            
            (863.0
            )
            
            
            -Servicing
      fees
            
            
            2.4
            
            
            
            (2.4
            )
            
            
            -Interest
      on intercompany note
            
            
            1.6
            
            
            
            (1.6
            )
            
            
            -(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.
              ASSETS
      HELD FOR SALE
  On July
14, 2008, Great Plains Energy closed its acquisition of GMO.  GMO has
several real estate properties that will not be used.  As a result,
these real estate properties are available for immediate sale in their present
condition and management is actively marketing these properties.  The
carrying amounts for these assets are presented at fair value less estimated
selling cost and are included in assets held for sale on Great Plains Energy’s
balance sheet.  Of the $16.8 million of assets held for sale at
September 30, 2009, $12.4 million is included in the electric utility segment
and the remaining $4.4 million is included in the other category.
 
 6.
              NUCLEAR
      PLANT
  KCP&L
owns 47% of Wolf Creek, its only nuclear generating unit.  Wolf Creek
is regulated by the Nuclear Regulatory Commission (NRC), with respect to
licensing, operations and safety-related requirements.
  Spent
Nuclear Fuel and High-Level 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.  The NRC continues its technical licensing review of a DOE
application, on file since June 2008, for authority to construct a national
repository for the disposal of spent nuclear fuel and high-level
 25
 radioactive
waste at Yucca Mountain, Nevada.  In October 2009, Congress passed and
sent to the President a fiscal 2010 budget that limits funding for Yucca
Mountain to those costs necessary to answer inquiries from the NRC while the
administration devises a new strategy for addressing nuclear waste
disposal.  Wolf Creek has an on-site storage facility designed to hold
all spent fuel generated at the plant through 2025, and believes it will be able
to expand on-site storage as needed past 2025.  Management cannot
predict when, or if, Yucca Mountain or an alternative disposal site will be
available to receive Wolf Creek’s spent nuclear fuel and will continue to
monitor this activity.  See Note 14 for a related legal
proceeding.
  Low-Level
Radioactive Waste
 Wolf
Creek disposes of most of its low-level radioactive waste (Class A waste) at an
existing third-party repository in Utah.  Wolf Creek previously
disposed of the remainder of its low-level radioactive waste (Class B and Class
C waste, which is higher in radioactivity but much lower in volume) at a
disposal site in Barnwell, South Carolina.  However, effective July 1,
2008, the state of South Carolina no longer accepts low-level radioactive waste
at Barnwell, except for waste from generators located in South Carolina,
Connecticut, and New Jersey.  Wolf Creek has storage capacity on site
for about four years generation of Class B and Class C
waste.   Management expects that the site located in Utah will
remain available to Wolf Creek for disposal of its Class A
waste.  Should disposal capability become unavailable, management
believes Wolf Creek will be able to store its low-level radioactive waste in an
on-site facility and that a temporary loss of low-level radioactive waste
disposal capability would not affect Wolf Creek’s continued
operation.
  Nuclear
Decommissioning Trust Fund
 The
following table summarizes the change in Great Plains Energy’s and KCP&L’s
decommissioning trust fund.  September
      30
                December
      312009
                2008Decommissioning
      Trust
                (millions)Beginning
      balance
                $     96.9
                
                $110.5Contributions
                2.8
                
                3.7Earned
      income, net of fees
                2.2
                
                3.3Net
      realized gains/(losses)
                (6.4)
                
                (8.2)Net
      unrealized gains/(losses)
                14.2
                
                (12.4)Ending
      balance
                $   109.7
                
                $96.9
 The
decommissioning trust is reported at fair value on the balance sheets and is
invested in assets as detailed in the following table.
 September
      30
                  
                  
                  December
      312009
                  
                  
                  2008Fair
                  
                  Unrealized
                  
                  Fair
                  
                  UnrealizedValue
                  
                  Gains/(Losses)
                  Value
                  
                  Gains/(Losses)(millions)Equity
      securities
                  
                  $
                  42.8
                  
                  
                  $
                  6.5
                  
                  
                  $
                  34.6
                  
                  
                  $
                  (5.3
                  )Debt
      securities
                  
                  
                  63.7
                  
                  
                  
                  3.4
                  
                  
                  
                  59.9
                  
                  
                  
                  1.0Other
                  
                  
                  3.2
                  
                  
                  
                  -
                  
                  
                  
                  2.4
                  
                  
                  
                  -Total
                  
                  $
                  109.7
                  
                  
                  $
                  9.9
                  
                  
                  $
                  96.9
                  
                  
                  $
                  (4.3
                  )


26


The
weighted average maturity of debt securities held by the trust at September 30,
2009, was approximately 7 years.  The costs of securities sold
are determined on the basis of specific identification.  The following
table summarizes the gains and losses from the sale of securities by the nuclear
decommissioning trust fund.
 Three
      Months
                
                Year
      toEnded
                
                DateSeptember
      30, 2009(millions)Realized
      Gains
                
                $
                0.5
                
                
                $
                1.2Realized
      Losses
                
                
                (0.9
                )
                
                
                (7.6
                )
 7.
              REGULATORY
      MATTERS
  Regulatory
Proceedings
 In
September 2008, KCP&L filed a request with the MPSC for an annual rate
increase of $101.5 million, with $15.1 million of that amount treated for
accounting purposes as additional amortization.  On June 10, 2009, the
MPSC issued its order approving in its entirety a stipulation and agreement
between KCP&L and other parties to KCP&L’s rate case before the
MPSC.  The stipulation and agreement provided for, among other things,
an increase in annual revenues of $95 million effective September 1, 2009, with
$10 million of that amount treated for accounting purposes as additional
amortization.  Parties may challenge the prudence of the cost of the
Iatan Unit No. 1 environmental project and the cost of facilities used in common
by Iatan Units No. 1 and No. 2 in KCP&L’s next rate case, but the Missouri
jurisdictional portion of any proposed rate base prudence disallowances will not
exceed $30 million in aggregate.
  In
September 2008, GMO filed a request with the MPSC for an annual electric rate
increase of $83.1 million ($66.0 million for GMO’s Missouri Public Service (MPS)
jurisdiction, and $17.1 million for GMO’s St. Joseph Light and Power (L&P)
jurisdiction).  On June 10, 2009, the MPSC issued its order approving
in its entirety a stipulation and agreement between GMO and other parties to
GMO’s electric rate case before the MPSC.  The stipulation and
agreement provided for, among other things, an increase in annual revenues of
$63 million ($48 million for GMO’s MPS jurisdiction, and $15 million for GMO’s
L&P jurisdiction) effective September 1, 2009.  Parties may challenge
the prudence of the cost of the Iatan Unit No. 1 environmental project and the
cost of facilities used in common by Iatan Units No. 1 and No. 2 in GMO’s next
rate case, but the GMO portion of any proposed rate base prudence disallowances
will not exceed $15 million in aggregate.  The order also continues the GMO
MPS and L&P Fuel Adjustment Clauses (FACs).
 
  In
September 2008, GMO filed a request with the MPSC for an annual steam rate
increase of $1.3 million.  On June 10, 2009, the MPSC issued its order
approving in its entirety a stipulation and agreement between GMO and other
parties to GMO’s steam rate case before the MPSC.  The stipulation and
agreement provided for an increase in annual revenues of approximately $1
million, effective July 1, 2009. The order allows for the Quarterly Cost
Adjustment (QCA) fuel sharing mechanism to be established at 85% above
the fuel cost included in base rates.  The previous sharing
mechanism was set at 80% above the fuel cost included
in base rates.
   In
September 2008, KCP&L filed a request with KCC for an annual rate increase
of $71.6 million, with $11.2 million of that amount treated for accounting
purposes as additional amortization.  On July 24, 2009, KCC issued its
order approving in its entirety a stipulation and agreement between KCP&L
and other parties to KCP&L’s rate case before KCC.  The
stipulation and agreement provided for, among other things, an increase in
annual revenues of $59 million effective August 1, 2009, with $18 million of
that amount treated for accounting purposes as additional
amortization.  Parties may challenge the prudence of the cost of the
Iatan Unit No. 1 environmental project and the costs of facilities used in
common by Iatan Units No. 1 and No. 2 in KCP&L’s next rate case, but the
Kansas jurisdictional portion of any proposed rate base prudence disallowances
will not exceed (i) $4.7 million for costs paid or approved for payment as of
April 30, 2009 and in-service as of July 4, 2009, and (ii) $2.8
 27
 million
for the first $56 million of costs not paid or approved for payment as of April
30, 2009.  There is no cap as to the amount of disallowances that may
be proposed for costs above this $56 million amount.
  KCP&L’s
Comprehensive Energy Plan and Collaboration Agreement
 In the
first quarter of 2009, KCP&L completed construction of the Iatan No. 1
environmental project and certain Iatan common facilities.  A
scheduled outage at Iatan No. 1 began in mid-October 2008 for a unit overhaul
and to tie in the environmental equipment.  Iatan No. 1 was originally
scheduled to be back on-line in February 2009, but during start-up a high level
of turbine vibration was experienced.  The turbine was repaired and
Iatan No. 1 came back on-line in April 2009.  During the second
quarter of 2009, KCP&L completed a cost and schedule reforecast for the
Iatan No. 2 project.  KCP&L continues to make progress on the
construction of Iatan No. 2.  The anticipated in-service date for
Iatan No. 2 is late summer of 2010.  The following table summarizes
the current cost estimates for Iatan No. 2, exclusive of Allowance for Funds
Used During Construction (AFUDC) and any costs for Iatan common facilities that
will be used by both Iatan No. 1 and Iatan No. 2.  The cost estimates
for Iatan common facilities identified for the start-up of Iatan No. 1 are
unchanged from the amounts disclosed in the 2008 Form 10-K.


Current
      Estimate
            
            Previous
      EstimateRange
            
            Range
            
            Change(millions)Great
      Plains Energy's 73% share of Iatan No. 2
            
            $
      1,153
            -
            $
      1,201
            
            $
      1,125
            -
            $
      1,201
            
            $      28
            -
            $        -KCP&L's
      55% share of Iatan No. 2
            
            868
            -
            904
            
            847
            -
            904
            
            21
            -
            -


In March
2007, KCP&L, the Sierra Club and the Concerned Citizens of Platte County
entered into a Collaboration Agreement.  KCP&L agreed in the
Collaboration Agreement to pursue increasing its wind generation capacity by
100MW by the end of 2010 and by an additional 300MW of wind generation capacity
by the end of 2012, subject to regulatory approval.  In 2008,
KCP&L entered into agreements to acquire 100MW of wind generation for
approximately $215 million, and subsequently provided notice to terminate the
contract and began discussions with the developer to explore
alternatives.  KCP&L entered into new agreements with the
developer in February 2009.  The developer assigned to KCP&L its
contract with the wind turbine manufacturer to purchase thirty-two turbines for
a purchase price of approximately $68 million, plus approximately $17 million to
be paid by KCP&L to the developer for various third party development and
assignment costs.  KCP&L’s deposit of approximately $42 million
under the original, terminated agreement was applied to the purchase
price.  KCP&L and the developer also entered into an agreement for
the construction of a thirty-five turbine project, with a May 31, 2010,
estimated project completion date, for an approximate price of $118
million.  KCP&L had an absolute and unconditional option to
terminate the agreement on or before September 30, 2009, for an upfront payment
of $7.5 million.  KCP&L exercised the option and the $7.5 million
payment was expensed in September 2009.  In April 2009, KCP&L
entered into a conditional 100 MW wind power
purchase agreement (PPA) with purchases expected to begin in January
2010.  The agreement was conditioned on the third party
obtaining acceptable project financing, KCP&L selling the wind turbines
and land to the third party at the price KCP&L has paid for those assets,
and the third party entering into acceptable project construction
agreements, among other conditions.  If all conditions were not
satisfied by September 1, 2009, the PPA was terminable at no cost to
KCP&L.  The conditions were not satisfied and the PPA was
terminated.  KCP&L continues to explore alternatives to increase
its wind generating capacity in 2010.
  KCP&L
agreed in the Collaboration Agreement to pursue other initiatives, including
energy efficiency, designed to offset CO2
emissions.  KCP&L and GMO are also evaluating energy efficiency
projects as one of the elements to meet future customer energy
needs.  A new Missouri law took effect in August 2009, requiring the
MPSC to allow electric utilities to recover the costs of approved energy
efficiency programs that result in energy savings.  The MPSC will
develop implementing rules, including cost recovery mechanisms.  Until
these rules are developed, and programs are approved, the effects on KCP&L
and GMO plans and future results cannot be reasonably
estimated.  However, management views this law as a positive
development in establishing a
 28
 regulatory
framework for energy efficiency programs and potentially allowing energy
efficiency costs to be recovered through rates similar to the recovery of
generation resource costs.
  GMO
Missouri 2007 Rate Case Appeal
 Appeals
of the May 2007 MPSC order approving an approximate $59 million increase in
annual revenues were filed in July and August of 2007 with the Circuit Court of
Cole County, Missouri, by the Office of Public Counsel, AG Processing, Sedalia
Industrial Energy Users’ Association and AARP seeking to set aside or remand the
order of the MPSC.  In February 2009, the Circuit Court affirmed the
MPSC order.  The Circuit Court’s decision was affirmed by the Court of
Appeals in August 2009, and the appellants have sought Missouri Supreme Court
review.  The order remains in effect unless reversed by the
courts.
  GMO
RTO Application
 GMO’s
application to transfer functional control of its transmission system to the
Midwest Independent Transmission System Operator, Inc. (MISO) Regional
Transmission Organization (RTO) was denied by the MPSC in October
2008.  In December 2008, GMO submitted a request to FERC to withdraw
from MISO based on this MPSC denial.  GMO and MISO negotiated an
agreement regarding this exit under which GMO would pay an insignificant amount
of exit fees to MISO.  This agreement was approved by FERC in May
2009.
  In
November 2008, GMO requested MPSC authorization to transfer functional control
of its transmission system to the Southwest Power Pool, Inc.
(SPP).  On February 4, 2009, the MPSC approved a Stipulation and
Agreement between GMO and several parties authorizing the transfer of functional
control.  GMO transferred functional control of its transmission
system to the SPP effective April 15, 2009.  On September 1, 2009, GMO
entered the SPP energy imbalance market.
  Great
Plains Energy’s Acquisition of GMO
 See Note
2 for a discussion of the pending appeals of the MPSC order authorizing the
acquisition.
 29
 Regulatory
Assets and Liabilities
 Great
Plains Energy’s and KCP&L’s regulatory assets and liabilities are detailed
in the following tables.


GreatSeptember
      30, 2009
            
            KCP&L
            
            
            
            GMO
            
            
            
            Plains
      EnergyRegulatory
      Assets
            
            (millions)Taxes
      recoverable through future rates
            
            $
            71.7
            
            
            
            $
            22.1
            
            (a)
            
            $
            93.8Loss
      on reacquired debt
            
            
            5.4
            
            (b)
            
            
            0.3
            
            (b)
            
            
            5.7Cost
      of removal
            
            
            7.0
            
            
            
            
            -
            
            
            
            
            7.0Asset
      retirement obligations
            
            
            22.9
            
            
            
            
            12.4
            
            
            
            
            35.3Pension
      settlements
            
            
            14.7
            
            (c)
            
            
            -
            
            
            
            
            14.7Pension
      and post-retirement costs
            
            
            391.1
            
            (d)
            
            
            82.2
            
            (d)
            
            
            473.3Deferred
      customer programs
            
            
            33.4
            
            (e)
            
            
            5.0
            
            
            
            
            38.4Rate
      case expenses
            
            
            5.4
            
            (f)
            
            
            1.3
            
            (f)
            
            
            6.7Skill
      set realignment costs
            
            
            6.5
            
            (g)
            
            
            -
            
            
            
            
            6.5Under-recovery
      of energy costs
            
            
            1.8
            
            (h)
            
            
            49.3
            
            (h)
            
            
            51.1Acquisition
      transition costs
            
            
            29.1
            
            
            
            
            22.0
            
            
            
            
            51.1St.
      Joseph Light & Power acquisition
            
            
            -
            
            
            
            
            3.2
            
            (h)
            
            
            3.2Storm
      damage
            
            
            -
            
            
            
            
            5.2
            
            (h)
            
            
            5.2Derivative
      instruments
            
            
            -
            
            
            
            
            3.9
            
            (h)
            
            
            3.9Other
            
            
            8.0
            
            (i)
            
            
            1.6
            
            (i)
            
            
            9.6Total
            
            $
            597.0
            
            
            
            $
            208.5
            
            
            
            $
            805.5Regulatory
      LiabilitiesEmission
      allowances
            
            $
            86.3
            
            
            
            $
            0.9
            
            
            
            $
            87.2Asset
      retirement obligations
            
            
            31.9
            
            
            
            
            -
            
            
            
            
            31.9Pension
            
            
            -
            
            
            
            
            34.2
            
            
            
            
            34.2Cost
      of removal
            
            
            -
            
            
            
            
            62.0
            
            (j)
            
            
            62.0Other
            
            
            6.3
            
            
            
            
            12.3
            
            
            
            
            18.6Total
            
            $
            124.5
            
            
            
            $
            109.4
            
            
            
            $
            233.9


(a)
              In
      GMO’s most recent rate case, GMO agreed not to seek recovery of the
      regulatory asset for previously flowed-through tax benefits on cost of
      removal timing deductions, which resulted in GMO recording a $28.9 million
      decrease in the regulatory asset, offset by deferred taxes of $11.1
      million and goodwill of $17.8
million.
 (b)
              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.
 (c)
              $8.1
      million not included in rate base and amortized through
    2012.
 (d)
              Represents
      the funded status of the pension plans more than offset by related
      liabilities.  Also represents financial and regulatory
      accounting method differences not included in rate base that will be
      eliminated over the life of the pension
plans.
 (e)
              $11.7
      million not included in rate base.
 (f)
              $5.3
      million at KCP&L and $1.3 million at GMO not included in rate base and
      amortized over various periods.
 (g)
              $3.3
      million not included in rate base and amortized through
    2017.
 (h)
              Not
      included in rate base.
 (i)
              Certain
      insignificant items are not included in rate base and amortized over
      various periods.
 (j)
              Estimated
      cumulative net provision for future removal
  costs.


30


GreatDecember
      31, 2008
            
            KCP&L
            
            
            GMO
            
            Plains
      EnergyRegulatory
      Assets
            
            (millions)Taxes
      recoverable through future rates
            
            $
            71.6
            
            
            $
            46.8
            
            
            $
            118.4Loss
      on reacquired debt
            
            
            5.7
            
            
            
            0.3
            
            
            
            6.0Cost
      of removal
            
            
            9.6
            
            
            
            -
            
            
            
            9.6Asset
      retirement obligations
            
            
            21.1
            
            
            
            12.0
            
            
            
            33.1Pension
      settlements
            
            
            18.0
            
            
            
            -
            
            
            
            18.0Pension
      and post-retirement costs
            
            
            417.6
            
            
            
            63.0
            
            
            
            480.6Deferred
      customer programs
            
            
            22.6
            
            
            
            0.4
            
            
            
            23.0Rate
      case expenses
            
            
            2.9
            
            
            
            0.6
            
            
            
            3.5Skill
      set realignment costs
            
            
            7.5
            
            
            
            -
            
            
            
            7.5Under-recovery
      of energy costs
            
            
            1.6
            
            
            
            52.0
            
            
            
            53.6Acquisition
      transition costs
            
            
            25.5
            
            
            
            17.6
            
            
            
            43.1St.
      Joseph Light & Power acquisition
            
            
            -
            
            
            
            3.6
            
            
            
            3.6Storm
      damage
            
            
            -
            
            
            
            6.4
            
            
            
            6.4Derivative
      instruments
            
            
            -
            
            
            
            9.7
            
            
            
            9.7Other
            
            
            5.4
            
            
            
            3.3
            
            
            
            8.7Total
            
            $
            609.1
            
            
            $
            215.7
            
            
            $
            824.8Regulatory
      LiabilitiesEmission
      allowances
            
            $
            86.5
            
            
            $
            1.0
            
            
            $
            87.5Asset
      retirement obligations
            
            
            22.7
            
            
            
            -
            
            
            
            22.7Pension
            
            
            -
            
            
            
            25.0
            
            
            
            25.0Cost
      of removal
            
            
            -
            
            
            
            58.1
            
            
            
            58.1Other
            
            
            6.6
            
            
            
            9.5
            
            
            
            16.1Total
            
            $
            115.8
            
            
            $
            93.6
            
            
            $
            209.4


8.
              PENSION
      PLANS AND OTHER EMPLOYEE BENEFITS
  The
Company maintains defined benefit pension plans for substantially all active and
inactive employees, including officers, of KCP&L, GMO, and Wolf Creek
Nuclear Operating Corporation (WCNOC) and incurs significant costs in providing
the plans.  Pension benefits under these plans reflect the employees’
compensation, years of service and age at retirement.
  KCP&L
and GMO record pension expense in accordance with rate orders from the MPSC and
KCC that allow the difference between pension costs under GAAP and pension costs
for ratemaking to be recognized as a regulatory asset or
liability.  This difference between financial and regulatory
accounting methods will be eliminated over the life of the pension
plans.
  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, GMO, and WCNOC.  The cost of
post-retirement benefits charged to KCP&L and GMO are accrued during an
employee's years of service and recovered through rates.
  As part
of the GMO acquisition in July 2008, Black Hills assumed the accrued pension
obligations owed to former employees of the electric and gas utility operations
Black Hills acquired.  Following the July 2008 close, approximately
$107.5 million of qualified benefit plan assets were transferred by GMO to a
comparable plan
 31
 established
by Black Hills.  In April 2009, the final plan asset transfer was
completed with $2.0 million transferred from the GMO plan to the Black Hills
plan.
  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.





Great
      Plains EnergyPension
      Benefits
            
            
            Other
      BenefitsThree
      Months Ended September 30
            
            2009
            
            
            2008
            
            
            2009
            
            
            
            2008Components
      of net periodic benefit costs
            
            (millions)Service
      cost
            
            $
            7.3
            
            
            $
            5.8
            
            
            $
            1.1
            
            
            
            $
            0.5Interest
      cost
            
            
            11.8
            
            
            
            10.7
            
            
            
            2.0
            
            
            
            
            1.7Expected
      return on plan assets
            
            
            (8.1
            )
            
            
            (11.0
            )
            
            
            (0.4
            )
            
            
            
            (0.3
            )Prior
      service cost
            
            
            1.0
            
            
            
            1.3
            
            
            
            1.9
            
            
            
            
            0.9Recognized
      net actuarial loss (gain)
            
            
            9.1
            
            
            
            8.1
            
            
            
            (0.1
            )
            
            
            
            0.1Transition
      obligation
            
            
            -
            
            
            
            -
            
            
            
            0.3
            
            
            
            
            0.3Net
      periodic benefit costs beforeregulatory
      adjustment
            
            
            21.1
            
            
            
            14.9
            
            
            
            4.8
            
            
            
            
            3.2Regulatory
      adjustment
            
            
            (7.2
            )
            
            
            (0.8
            )
            
            
            -
            
            
            
            
            (0.1
            )Net
      periodic benefit costs
            
            $
            13.9
            
            
            $
            14.1
            
            
            $
            4.8
            
            
            
            $
            3.1


Great
      Plains EnergyPension
      Benefits
            
            
            Other
      BenefitsYear
      to Date September 30
            
            2009
            
            
            2008
            
            
            2009
            
            
            2008Components
      of net periodic benefit costs
            
            (millions)Service
      cost
            
            $
            21.8
            
            
            $
            14.8
            
            
            $
            3.1
            
            
            $
            1.3Interest
      cost
            
            
            35.4
            
            
            
            26.6
            
            
            
            6.2
            
            
            
            3.9Expected
      return on plan assets
            
            
            (24.1
            )
            
            
            (27.1
            )
            
            
            (1.2
            )
            
            
            (0.7
            )Prior
      service cost
            
            
            3.0
            
            
            
            3.4
            
            
            
            5.2
            
            
            
            2.3Recognized
      net actuarial loss (gain)
            
            
            27.3
            
            
            
            24.2
            
            
            
            (0.3
            )
            
            
            0.4Transition
      obligation
            
            
            -
            
            
            
            -
            
            
            
            1.0
            
            
            
            0.9Settlement
      charge
            
            
            0.1
            
            
            
            -
            
            
            
            -
            
            
            
            -Net
      periodic benefit costs beforeregulatory
      adjustment
            
            
            63.5
            
            
            
            41.9
            
            
            
            14.0
            
            
            
            8.1Regulatory
      adjustment
            
            
            (20.3
            )
            
            
            (3.1
            )
            
            
            (0.2
            )
            
            
            (0.1
            )Net
      periodic benefit costs
            
            $
            43.2
            
            
            $
            38.8
            
            
            $
            13.8
            
            
            $
            8.0


32


KCP&LPension
      Benefits
            
            
            Other
      BenefitsThree
      Months Ended September 30
            
            2009
            
            
            2008
            
            
            2009
            
            
            2008Components
      of net periodic benefit costs
            
            (millions)Service
      cost
            
            $
            8.3
            
            
            $
            5.7
            
            
            $
            0.8
            
            
            $
            0.3Interest
      cost
            
            
            13.1
            
            
            
            10.3
            
            
            
            1.5
            
            
            
            1.3Expected
      return on plan assets
            
            
            (9.2
            )
            
            
            (10.5
            )
            
            
            (0.2
            )
            
            
            (0.2
            )Prior
      service cost
            
            
            1.2
            
            
            
            1.3
            
            
            
            0.8
            
            
            
            0.6Recognized
      net actuarial loss
            
            
            10.3
            
            
            
            8.0
            
            
            
            0.1
            
            
            
            0.1Transition
      obligation
            
            
            -
            
            
            
            -
            
            
            
            0.2
            
            
            
            0.3Net
      periodic benefit costs beforeregulatory
      adjustment
            
            
            23.7
            
            
            
            14.8
            
            
            
            3.2
            
            
            
            2.4Regulatory
      adjustment
            
            
            (11.6
            )
            
            
            (2.4
            )
            
            
            0.1
            
            
            
            (0.1
            )Net
      periodic benefit costs
            
            $
            12.1
            
            
            $
            12.4
            
            
            $
            3.3
            
            
            $
            2.3


KCP&LPension
      Benefits
            
            
            Other
      BenefitsYear
      to Date September 30
            
            2009
            
            
            2008
            
            
            2009
            
            
            2008Components
      of net periodic benefit costs
            
            (millions)Service
      cost
            
            $
            21.8
            
            
            $
            14.6
            
            
            $
            2.3
            
            
            $
            1.1Interest
      cost
            
            
            34.6
            
            
            
            26.0
            
            
            
            4.6
            
            
            
            3.5Expected
      return on plan assets
            
            
            (24.1
            )
            
            
            (26.4
            )
            
            
            (0.8
            )
            
            
            (0.6
            )Prior
      service cost
            
            
            3.1
            
            
            
            3.4
            
            
            
            2.3
            
            
            
            2.0Recognized
      net actuarial loss
            
            
            27.2
            
            
            
            23.9
            
            
            
            0.2
            
            
            
            0.4Transition
      obligation
            
            
            -
            
            
            
            -
            
            
            
            0.6
            
            
            
            0.9Net
      periodic benefit costs beforeregulatory
      adjustment
            
            
            62.6
            
            
            
            41.5
            
            
            
            9.2
            
            
            
            7.3Regulatory
      adjustment
            
            
            (25.7
            )
            
            
            (4.6
            )
            
            
            0.1
            
            
            
            (0.1
            )Net
      periodic benefit costs
            
            $
            36.9
            
            
            $
            36.9
            
            
            $
            9.3
            
            
            $
            7.2


9.
              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.  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 DateSeptember
      30
            
            September
      302009
            
            
            2008
            
            
            2009
            
            
            2008Great
      Plains Energy
            
            (millions)Compensation
      expense
            
            $
            1.7
            
            
            $
            2.0
            
            
            $
            4.2
            
            
            $
            6.9Income
      tax benefits
            
            
            0.5
            
            
            
            0.6
            
            
            
            1.0
            
            
            
            2.1KCP&LCompensation
      expense
            
            
            1.2
            
            
            
            1.7
            
            
            
            2.8
            
            
            
            4.7Income
      tax benefits
            
            
            0.4
            
            
            
            0.5
            
            
            
            0.5
            
            
            
            1.6


33


Amendment
to Performance Shares
 In May
2009, the independent members of the Great Plains Energy Board of Directors
(Board) approved amendments to certain outstanding performance share agreements
(Original Agreements) for the 2007-2009 and 2008-2010 performance
periods.  The Original Agreements, as so amended, are referred to as
the Amended Agreements.  Due to changes in economic and financial
market conditions since the Original Agreements were entered into, the
Compensation and Development Committee (Committee) and Board determined that the
Original Agreements no longer provided meaningful incentives.
  The
Original Agreements granted performance shares based on a single performance
metric – the Company’s total shareholder return (TSR) as compared to the Edison
Electric Institute TSR index for electric utility companies over the relevant
performance periods.  The Amended Agreements provide for a combination
of performance shares and time-based restricted stock.  In calculating
the number of performance shares and restricted stock under the Amended
Agreements, the value of the performance shares granted under the Original
Agreements (determined as of the date of the original awards) was first reduced
by two-thirds (for the 2007-2009 performance awards) and one-third (for the
2008-2010 performance awards).  The resulting amounts were then
divided by the fair market value (as defined in the Long-Term Incentive Plan) of
Great Plains Energy stock on the amendment date to arrive at a number of shares,
which was then divided equally between performance shares and restricted
stock.  The two equally weighted performance share award metrics under
the Amended Agreements are funds from operations as a percentage of total
adjusted debt and EPS, with the number of shares of common stock ultimately
issued varying depending on Great Plains Energy’s performance over stated
performance periods.
  The
performance shares under the Amended Agreements will be re-measured at fair
value each reporting period, with compensation cost to be recorded at the
greater of the grant-date fair value of the Original Agreements or the fair
value of the Amended Agreements for the portion for which the requisite service
has been rendered.  The amendment resulted in an insignificant amount
of incremental compensation cost for Great Plains Energy and
KCP&L.
  Performance
Shares
 Performance
share activity year to date September 30, 2009, 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 over stated performance periods.  Compensation
expense for performance shares issued subsequent to the amendment discussed
above is calculated by taking the change in fair value between reporting periods
for the portion for which the requisite service has been
rendered.


Performance
            
            Grant
      DateShares
            
            Fair
      Value*Beginning
      balance
            
            
            314,511
            
            $
            28.47Performance
      adjustment
            
            
            (88,056)Granted
            
            
            196,431
            
            
            14.35Amendment
      effect
            
            
            (101,589)
            
            
            29.28Forfeited
            
            
            (22,995)
            
            
            26.72Ending
      balance
            
            
            298,302
            
            
            19.12*  weighted-average


At
September 30, 2009, the remaining weighted-average contractual term was 1.8
years.  There were no performance shares granted for the three months
ended September 30, 2009.  The weighted-average grant-date fair value
of shares granted year to date September 30, 2009, was $14.35.  The
weighted-average grant-date fair value of shares granted for the three months
ended and year to date September 30, 2008, was $26.22.  At September
30, 2009, there was $3.9 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.  There were no shares of common stock issued related to
 34
 performance
shares for the three months and year to date September 30, 2009.  The
total fair value of shares of common stock issued related to performance shares
year to date September 30, 2008, was $1.6 million.
 
 Restricted
Stock
 Restricted
stock activity year to date September 30, 2009, is summarized in the following
table.


`Nonvested
            
            
            Grant
      DateRestricted
      stock
            
            
            Fair
      Value*Beginning
      balance
            
            
            458,796
            
            $
            30.54Amendment
      effect
            
            
            106,443
            
            
            14.39Granted
      and issued
            
            
            266,651
            
            
            14.50Vested
            
            
            (173,962)
            
            
            31.27Forfeited
            
            
            (38,072)
            
            
            28.81Ending
      balance
            
            
            619,856
            
            
            20.77*  weighted-average




At
September 30, 2009, the remaining weighted-average contractual term was 1.4
years.  The weighted-average grant-date fair value of shares granted
for the three months ended and year to date September 30, 2009, was $18.03 and
$14.50, respectively.  The weighted-average grant-date fair value of
shares granted for the three months ended and year to date September 30, 2008,
was $25.72 and $26.09, respectively.  At September 30, 2009, there was
$4.5 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 September 30, 2009, was insignificant and $5.4
million, respectively.  The total fair value of shares vested for the
three months ended and year to date September 30, 2008, was zero and $2.2
million, respectively.
  Stock
Options
 Stock
option activity under all plans year to date September 30, 2009, is summarized
in the following table.  All stock options are fully vested at
September 30, 2009.


ExerciseStock
      Options
            
            Shares
            
            
            Price*Beginning
      balance
            
            
            520,829
            
            
            $
            76.10Exercised
            
            
            (2,758
            )
            
            
            10.94Forfeited
      or expired
            
            
            (211,090
            )
            
            
            139.95Outstanding
      and exercisable at September 30, 2009
            
            
            306,981
            
            
            
            32.78*  weighted-average




The
weighted-average grant-date fair value of options exercised for the three months
ended and year to date September 30, 2009, was $10.65 and $10.94 per share,
respectively and $21.46 per share for the same periods in 2008.  The
aggregate intrinsic value and cash received for options exercised in 2009 and
2008 was insignificant.
 35
 The
following table summarizes all outstanding and exercisable stock options as of
September 30, 2009.


Outstanding
      and Exercisable OptionsWeighted
      AverageRemaining
            
            WeightedExercise
            
            Number
      of
            
            
            Contractual
      Life
            
            AveragePrice
      Range
            
            Shares
            
            
            in
      Years
            
            Exercise
      Price$9.21
      - $11.64
            
            59,598
            
            
            
            0.2
            
            
            $
            11.56$23.91
      - $27.73
            
            225,679
            
            
            
            2.2
            
            
            
            24.56$121.90
      - $181.11
            
            13,876
            
            
            
            0.8
            
            
            
            150.67$221.82
      - $251.86
            
            7,828
            
            
            
            1.6
            
            
            
            222.23Total
            
            
            306,981
            
            
            
            1.7


At
September 30, 2009, the aggregate intrinsic value of in the money outstanding
and exercisable options was insignificant.
 
 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.  Director Deferred Share Units activity
year to date September 30, 2009, is summarized in the following
table.


Share
            
            
            Grant
      DateUnits
            
            
            Fair
      Value*Beginning
      balance
            
            
            7,588
            
            
            $
            27.94Issued
            
            
            13,635
            
            
            
            19.29Ending
      balance
            
            
            21,223
            
            
            
            22.38*  weighted-average




The total
fair value of shares of Director Deferred Share Units issued for the three
months ended and year to date September 30, 2009 and 2008, was
insignificant.
  10.
              SHORT-TERM
      BORROWINGS AND SHORT-TERM BANK LINES OF
CREDIT
  Great
Plains Energy’s $400 Million Revolving Credit Facility
 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 September 30, 2009, Great Plains Energy
was in compliance with this
covenant.  At September 30, 2009, Great Plains Energy had $39.0
million of outstanding cash borrowings with a weighted-average interest rate of
0.70% and had issued letters of credit totaling $25.6 million under the credit
facility.  At December 31, 2008, Great Plains Energy had $30.0 million
of outstanding cash borrowings with a weighted-average interest rate of 1.22%
and had issued letters of credit totaling $34.9 million under the credit
facility.
  KCP&L’s
$600 Million Revolving 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 September 30, 2009, KCP&L was in compliance with
 36
 this
covenant.  At September 30, 2009, KCP&L had $38.0 million of
commercial paper outstanding, at a weighted-average interest rate of 0.516%,
$20.0 million of letters of credit outstanding and no outstanding cash
borrowings under the facility.  At December 31, 2008, KCP&L had
$380.2 million of commercial paper outstanding, at a weighted-average interest
rate of 5.34%, $11.9 million of letters of credit outstanding and no outstanding
cash borrowings under the facility.
  GMO’s
$400 Million Revolving Credit Facility
 GMO’s
$400 million revolving credit facility with a group of banks expires in
September 2011.  A default by GMO 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, GMO 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 September 30, 2009, GMO was in compliance with this
covenant.  At September 30, 2009, GMO had $117.0 million of
outstanding cash borrowings with a weighted-average interest rate of 1.50%, and
had issued letters of credit totaling $14.4 million under the credit
facility.  At December 31, 2008, GMO had $110.0 million of outstanding
cash borrowings with a weighted-average interest rate of 1.22%, and had issued
letters of credit totaling $1.2 million under the credit facility.
  GMO’s
$65 Million Revolving Credit Facility
 GMO’s $65
million revolving credit facility originally would have expired in April 2009,
but was extended until July 2009 and the aggregate amount available for
borrowing was reduced to $50 million.  On June 9, 2009, GMO terminated
this agreement.  At December 31, 2008, GMO had $64.0 million of
outstanding cash borrowings with a weighted-average interest rate of
2.16%.
 37
 11.
              LONG-TERM
      DEBT
  Great
Plains Energy’s and KCP&L’s long-term debt is detailed in the following
table.


September
      30
            
            
            December
      31Year
      Due
            
            
            2009
            
            
            2008KCP&L
            
            
            
            
            (millions)General
      Mortgage Bonds4.90%*
      EIRR bonds
            
            2012-2035
            
            
            $
            158.8
            
            
            $
            158.87.15%
      Series 2009A
            
            2019
            
            
            
            400.0
            
            
            
            -4.65%
      EIRR Series 2005
            
            2035
            
            
            
            50.0
            
            
            
            -5.125%
      EIRR Series 2007A-1
            
            2035
            
            
            
            63.3
            
            
            
            -5.00%
      EIRR Series 2007A-2
            
            2035
            
            
            
            10.0
            
            
            
            -5.375%
      EIRR Series 2007B
            
            2035
            
            
            
            73.2
            
            
            
            -Unamortized
      discount
            
            
            
            
            
            (0.4
            )
            
            
            -Senior
      Notes6.50%
      Series
            
            2011
            
            
            
            150.0
            
            
            
            150.05.85%
      Series
            
            2017
            
            
            
            250.0
            
            
            
            250.06.375%
      Series
            
            2018
            
            
            
            350.0
            
            
            
            350.06.05%
      Series
            
            2035
            
            
            
            250.0
            
            
            
            250.0Unamortized
      discount
            
            
            
            
            
            (1.8
            )
            
            
            (1.8
            )EIRR
      Bonds4.65%
      Series 2005
            
            
            
            
            
            -
            
            
            
            50.05.125%
      Series 2007A-1
            
            
            
            
            
            -
            
            
            
            63.35.00%
      Series 2007A-2
            
            
            
            
            
            -
            
            
            
            10.05.375%
      Series 2007B
            
            
            
            
            
            -
            
            
            
            73.24.90%
      Series 2008
            
            2038
            
            
            
            23.4
            
            
            
            23.4Other
            
            2018
            
            
            
            3.5
            
            
            
            -Current
      maturities
            
            
            
            
            
            (0.2
            )
            
            
            -Total
      KCP&L
            
            
            
            
            
            1,779.8
            
            
            
            1,376.9GMOFirst
      Mortgage Bonds9.44%
      Series
            
            2010-2021
            
            
            
            13.5
            
            
            
            14.6Pollution
      Control Bonds5.85%
      SJLP Pollution Control
            
            2013
            
            
            
            5.6
            
            
            
            5.60.344%
      Wamego Series 1996
            
            2026
            
            
            
            7.3
            
            
            
            7.32.133%
      State Environmental 1993
            
            2028
            
            
            
            5.0
            
            
            
            5.0Senior
      Notes7.625%
      Series
            
            2009
            
            
            
            68.5
            
            
            
            68.57.95%
      Series
            
            2011
            
            
            
            137.3
            
            
            
            137.37.75%
      Series
            
            2011
            
            
            
            197.0
            
            
            
            197.011.875%
      Series
            
            2012
            
            
            
            500.0
            
            
            
            500.08.27%
      Series
            
            2021
            
            
            
            80.9
            
            
            
            80.9Fair
      Value Adjustment
            
            
            
            
            
            92.8
            
            
            
            117.5Medium
      Term Notes7.16%
      Series
            
            2013
            
            
            
            6.0
            
            
            
            6.07.33%
      Series
            
            2023
            
            
            
            3.0
            
            
            
            3.07.17%
      Series
            
            2023
            
            
            
            7.0
            
            
            
            7.0Other
            
            2009
            
            
            
            0.3
            
            
            
            1.1Current
      maturities
            
            
            
            
            
            (69.9
            )
            
            
            (70.7
            )Total
      GMO
            
            
            
            
            
            1,054.3
            
            
            
            1,080.1Other
      Great Plains Energy6.875%
      Senior Notes
            
            2017
            
            
            
            100.0
            
            
            
            100.010.00%
      Equity Units Subordinated Notes
            
            2042
            
            
            
            287.5
            
            
            
            -Unamortized
      discount
            
            
            
            
            
            (0.4
            )
            
            
            (0.4
            )Total
      Great Plains Energy excluding current maturities
            
            
            
            
            $
            3,221.2
            
            
            $
            2,556.6*   Weighted-average
      interest rates at September 30, 2009.


38


Fair
Value of Long-Term Debt
 Fair
value of long-term debt is based on quoted market prices, with the incremental
borrowing rate for similar debt used to determine fair value if quoted market
prices were not available.  At September 30, 2009, the book value and
fair value of Great Plains Energy’s long-term debt, including current
maturities, was $3.3 billion and $3.5 billion, respectively.  At
September 30, 2009, the book value and fair value of KCP&L’s long-term debt,
including current maturities, was $1.8 billion and $1.9 billion,
respectively.  At December 31, 2008, the book value and fair value of
Great Plains Energy’s long-term debt, including current maturities, was $2.6
billion and $2.2 billion, respectively.  At December 31, 2008, the
book value and fair value of KCP&L’s long-term debt, including current
maturities, was $1.4 billion and $1.1 billion, respectively.
  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 DateSeptember
      30
            
            September
      302009
            
            
            2008
            
            
            2009
            
            
            2008(millions)KCP&L
            
            $
            0.5
            
            
            $
            0.4
            
            
            $
            1.5
            
            
            $
            1.2Other
      Great Plains Energy
            
            
            0.8
            
            
            
            0.3
            
            
            
            1.7
            
            
            
            0.6Total
      Great Plains Energy
            
            $
            1.3
            
            
            $
            0.7
            
            
            $
            3.2
            
            
            $
            1.8


KCP&L
General Mortgage Bonds and EIRR Bonds
 In March
2009, KCP&L issued $400.0 million of 7.15% Mortgage Bonds Series 2009A,
maturing in 2019.  As a result of amortizing the loss recognized in
Other Comprehensive Income (OCI) on KCP&L’s Forward Starting Swaps (FSS),
the effective interest rate on KCP&L’s $400.0 million of 7.15% Mortgage
Bonds Series 2009A is 8.591%.
  In
connection with the issuance of KCP&L’s $400.0 million 7.15% Mortgage Bonds
Series 2009A , KCP&L concurrently issued $50.0 million of Mortgage Bonds
Series 2005 Environmental Improvement Revenue Refunding (EIRR) Insurer due 2035
(2005 Insurer Bonds) to Syncora Guarantee Inc. (Syncora) and $146.5 million of
Mortgage Bonds Series 2007 EIRR Insurer due 2035 (2007 Insurer Bonds) to
Financial Guaranty Insurance Company (FGIC), as required under the applicable
insurance agreements described below.  The 2005 and 2007 Insurer Bonds
are not incremental debt for KCP&L, but collateralize Syncora’s and FGIC’s
claims on KCP&L if Syncora or FGIC were required to meet their obligations
under the insurance agreements.
  KCP&L
is the obligor with respect to $50.0 million aggregate principal amount of
EIRR Bonds Series 2005, which are insured by a municipal bond
insurance policy issued by Syncora.  The insurance agreement between
KCP&L and Syncora required KCP&L to deliver to Syncora
$50.0 million of mortgage bonds as collateral for KCP&L’s obligations
under the insurance agreement because KCP&L issued mortgage bonds (other
than refundings of outstanding mortgage bonds) in excess of certain
thresholds.
  KCP&L
is the obligor with respect to $146.5 million aggregate principal amount of
EIRR Bonds Series 2007A-1, Series 2007A-2 and Series 2007B,
which are insured by a municipal bond insurance policy issued by
FGIC.  The insurance agreement between KCP&L and FGIC required
KCP&L to deliver $146.5 million of mortgage bonds or similar securities to
FGIC as collateral for KCP&L’s obligations under the insurance agreement
because KCP&L issued mortgage bonds secured by liens not permitted by the
insurance agreement.
  Other
Great Plains Energy Long-Term Debt
 In May
2009, Great Plains Energy issued $287.5 million of Equity
Units.  Equity Units, each with a stated amount of $50, initially
consist of a 5% undivided beneficial interest in $1,000 principal amount of
10.00% subordinated notes due June 15, 2042, and a purchase contract requiring
the holder to purchase the Company’s common stock
 39
 by June
15, 2012 (the settlement date).  Each purchase contract obligates the
holder of the purchase contract to purchase, and Great Plains Energy to sell, no
later than June 15, 2012, for $50 in cash, newly issued shares of the Company’s
common stock equal to the settlement rate.  The purchase contracts may
be settled earlier at the option of the holder subject to certain conditions,
including but not limited to, the occurrence of a fundamental change (as defined
in the agreement) at least 20 business days prior to June 15,
2012.  The settlement rate will vary according to the applicable
market value of the Company’s common stock at the settlement
date.  Applicable market value will be measured by the average of the
closing price per share of the Company’s common stock on each of the 20
consecutive trading days ending on the third trading day immediately preceding
June 15, 2012.  The settlement rate will be applied to the 5,750,000
Equity Units at the settlement date to issue a number of common shares
determined as described in the following table.


Applicable
            Settlement
      rate
            
            Market
      valuemarket
      value
            (in
      common shares)
            
            per
      Equity Unit (a)$16.80
      or greater
            2.9762
      to 1
            
            Greater
      than $50 per Equity Unit$16.80
      to $14.00
            $50
      divided by the applicable
            
            Equal
      to $50 per Equity Unitmarket
      value to 1$14.00
      or less
            3.5714
      to 1
            
            Less
      than $50 per Equity Unit(a)
            Assumes
      that the market price of the Company's common stock on June 15,
      2012,is
      the same as the applicable market
value.


Great
Plains Energy makes quarterly contract adjustment payments at the rate of 2.00%
per year of the stated amount of $50 per Equity Unit and interest payments at
the rate of 10.00% per year on the subordinated notes.  Great Plains
Energy must attempt to remarket the subordinated notes, in whole but not in
part.  The proceeds from a successful remarketing will be used to
satisfy the holders’ obligation under the purchase contract.  If the
subordinated notes are not successfully remarketed by June 15, 2012, Great
Plains Energy will exercise its rights as a secured party to dispose of the
subordinated notes in accordance with applicable laws and satisfy in full each
holder’s obligation to purchase the Company’s common stock under the purchase
contracts.
 
 The
present value of the contract adjustment payments of $15.1 million was recorded
as a liability in other current liabilities and other deferred credits and other
liabilities with a corresponding amount recorded as capital stock premium and
expense on Great Plains Energy’s consolidated balance sheet.  Expenses
incurred with the offering of $4.2 million have been deferred and are being
recognized as interest expense over the term on the notes and $7.4 million were
recorded as capital stock premium and expense.
  12.
              COMMON
      SHAREHOLDERS’ EQUITY
  In May
2009, Great Plains Energy issued 11.5 million shares of common stock at $14.00
per share with $161.0 million in gross proceeds and issuance costs of $6.5
million.
  At the
May 5, 2009, annual shareholders meeting, the Great Plains Energy common stock
shareholders approved an amendment to the articles of incorporation, increasing
the authorized number of shares of common stock, no par value, to 250 million
from 150 million.
  In the
first quarter of 2009, Great Plains Energy sold 3.8 million shares of common
stock for $49.5 million in net proceeds under a Sales Agency Financing Agreement
with BNY Mellon Capital Markets, LLC.  Great Plains Energy used the
proceeds to make a $40.0 million capital contribution to KCP&L to fund
Comprehensive Energy Plan projects.
 40
 Great
Plains Energy’s articles of incorporation restrict the payment of common stock
dividends in the event common equity is 25% or less of total
capitalization.  In addition, if preferred stock dividends are not
declared and paid when scheduled, Great Plains Energy could not declare or pay
common stock dividends or purchase any common shares.  If the unpaid
preferred stock dividends equal four or more full quarterly dividends, the
preferred shareholders, voting as a single class, could elect the smallest
number of directors necessary to constitute a majority of the full
Board.  The MPSC and KCC orders issued in 2001 authorizing the holding
company structure contain certain conditions requiring Great Plains Energy and
KCP&L to maintain consolidated common equity of at least 30% and 35%,
respectively, of total capitalization.  The revolving credit
agreements of Great Plains Energy, KCP&L and GMO contain a covenant
requiring each company to maintain a consolidated indebtedness to consolidated
total capitalization ratio of not more than 0.65 to 1.00.  The
definition of total capitalization is not the same under the MPSC and KCC 2001
orders and the revolving credit agreements.  Under the Federal Power
Act, KCP&L and GMO generally can pay dividends only out of retained
earnings.  In addition, Great Plains Energy is prohibited from paying
dividends on its common and preferred stock in the event Equity Unit contract
payments or interest payments on the debt underlying the Equity Units are
deferred until such deferrals have been paid.
  As of
September 30, 2009, all of Great Plains Energy’s and KCP&L’s retained
earnings and net income were free of restrictions.  As a result of the
above restrictions, Great Plains Energy’s subsidiaries had restricted net assets
of approximately $2.8 billion as of September 30, 2009.  The
restrictions are not expected to affect the companies’ ability to pay dividends
at the current level in the foreseeable future.
  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 and GMO’s operations.  The generation, transmission and
distribution of electricity produces and requires proper management and disposal
of certain hazardous products and wastes that are subject to these laws and
regulations.  In addition to imposing extensive and 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.  KCP&L and GMO seek to use current environmental
technology.
  The
Company believes it is likely that additional federal or relevant state or local
laws or regulations could be enacted to address global climate
change.  Such laws or regulations could mandate measures to measure,
control or reduce the emission of greenhouse gases, such as CO2, which are
created in the combustion of fossil fuels.  Laws have recently been
passed in Missouri and Kansas, the states in which the Company’s retail electric
business is operated, setting renewable energy standards, and the Company
believes that national renewable energy standards are also
likely.  While the Company believes laws and/or regulations addressing
these matters will probably be enacted, the timing, requirements and impact of
such laws and/or regulations, including the cost to obtain and install new
equipment to achieve compliance, cannot be reasonably estimated at this
time.  Such laws and/or regulations could have the potential for a
significant financial and operational impact on KCP&L and
GMO.  KCP&L and GMO would seek recovery of capital costs and
expenses for compliance through rate increases; however, there can be no
assurance that such rate increases would be granted.
  Great
Plains Energy’s and KCP&L’s current estimates of capital expenditures
(exclusive of AFUDC and property taxes) to comply with the currently effective
Clean Air Interstate Rule (CAIR) and with the best available retrofit technology
(BART) rule is a range of approximately $0.8 billion - $1
billion.  The decrease in the cost estimates from the 2008 Form 10-K
of $1.3 billion - $1.7 billion and $1.1 billion - $1.4 billion for Great Plains
Energy and KCP&L, respectively, is a result of completing environmental
projects at Iatan No. 1 and GMO’s Sibley and Jeffrey stations.  As
discussed below, CAIR has been remanded to the EPA, but remains in effect until
the EPA issues rules consistent with the court’s order or until the court takes
further action.  It is not possible to predict
 41
 what
rules the EPA may issue as a result of this remand, when the rules may be
issued, or the costs associated with such rules.  The actual cost of
compliance with any future rules, and with BART, may be significantly different
from the cost estimates provided.
  The
potential capital costs of the Collaboration Agreement provisions relating to
NOx,
SO2
and particulate emission limits at the LaCygne generating station are within the
disclosed overall estimated capital cost ranges.  However, the ranges
do not reflect potential costs relating to other laws, including potential laws
regarding the control of mercury emissions (discussed below), and also do not
reflect costs relating to additional wind generation, energy efficiency and
other CO2 emission
offsets contemplated by the Collaboration Agreement or that may be required
under the Missouri or Kansas renewable energy standards, which are discussed
below.  Costs relating to the additional wind generation and energy
efficiency investments that are subject to regulatory approval cannot be
reasonably estimated at this time.  The ranges do not reflect the
non-capital costs KCP&L and GMO incur on an ongoing basis to comply with
environmental laws, which may in the future increase due to the implementation
of KCP&L’s Comprehensive Energy Plan and KCP&L’s and GMO’s ongoing
compliance with current or future environmental laws.  For instance,
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 continues to evaluate the available
operational and capital resource alternatives, and will select the most
cost-effective mix of actions to achieve this additional
offset.  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 CAIR
requires reductions in SO2 and
NOx
emissions in 28 states, including Missouri.  The reduction in both
SO2
and NOx emissions
is set to be accomplished through establishment of permanent statewide caps for
NOx
effective January 1, 2009, and SO2 effective
January 1, 2010.  More restrictive caps are scheduled to become
effective January 1, 2015.  KCP&L’s and GMO’s fossil
fuel-fired plants located in Missouri are subject to CAIR, while their fossil
fuel-fired plants in Kansas are 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 consistent with its
opinion.  The EPA and others sought rehearing of the Court’s
decision.  On December 23, 2008, the Court denied all petitions for
rehearing and issued an order remanding CAIR to the EPA to revise the rule
consistent with its July 2008 order.  The CAIR thus remains in effect
pending future EPA or court action.
 
 The EPA’s
future revisions to CAIR 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.  Great Plains
Energy and KCP&L cannot predict the outcome of the EPA’s revisions to CAIR,
but such revisions could have a significant effect on Great Plains Energy’s and
KCP&L’s results of operations, financial position and cash
flows.
 
 KCP&L
and GMO expect to meet the emissions reductions required by CAIR at their
Missouri plants through a combination of pollution control capital projects and
the purchase of emission allowances as needed.  Some of the control
technology for SO2 and
NOx
could also aid in the control of mercury.  CAIR currently establishes
a market-based cap-and-trade program with an emission allowance
allocation.  Facilities demonstrate compliance with CAIR by holding
sufficient allowances for each ton of SO2 and
NOx
emitted in any given year.  KCP&L and GMO are currently allowed to
utilize unused SO2 emission
allowances that they have either accumulated during previous years of the Acid
Rain Program or purchased to meet the more stringent CAIR
requirements.  At September 30, 2009, KCP&L had accumulated unused
SO2
emission allowances sufficient to support over 110,000 tons of SO2 emissions
(enough to support expected requirements under the current CAIR for the
foreseeable future) 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
 42
 Energy
Plan as approved by the MPSC and KCC.  At September 30, 2009, GMO had
accumulated unused SO2 emission
allowances sufficient to support just over 20,000 tons of SO2 emissions
(enough to support expected requirements under the current CAIR through 2011),
which it has received under the Acid Rain Program or purchased, which are
recorded in inventory at average cost.
  Analysis
of the current CAIR rule indicates that NOx and
SO2
control may be required for KCP&L’s Montrose Station and GMO’s Sibley and
Lake Road Stations 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 and GMO’s Sibley and Lake Road Stations
may be 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, an interim status report to update progress on
underlying studies was completed in 2008.  KCP&L is continuing to
evaluate compliance options in light of developing potential legislative and
regulatory environmental requirements.
  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
KCP&L’s LaCygne Nos. 1 and 2 in Kansas, KCP&L’s Iatan No. 1, in which
GMO has an interest, and KCP&L’s Montrose No. 3 in Missouri, GMO’s Sibley
Unit No. 3 and Lake Road Unit No. 6 in Missouri and Westar Energy, Inc.
(Westar)’s Jeffrey Unit Nos. 1 and 2 in Kansas, in which GMO has an 8%
interest.  Initially, in Missouri, compliance with CAIR will be
compliance with BART for individual sources.  Neither Missouri nor
Kansas has received EPA approval for their BART plans.
  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.  Also as provided in the Collaboration Agreement,
KCP&L issued, in 2008, requests for proposals for equipment required to
comply with BART.  KCP&L is continuing to evaluate compliance
options in light of developing potential legislative and regulatory
environmental requirements.
  New
Source Review
 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.  In May 2008, KCP&L received a subpoena from a federal
grand jury seeking documents relating to capital projects at Iatan No.
1.  In September 2009, KCP&L was informed by the Department of
Justice that it did not expect to seek criminal charges under the Clean Air Act
in connection with repair work, maintenance or modifications at Iatan No.
1.
  In
January 2004, Westar received notification from the EPA alleging that it had
violated new source review requirements and Kansas environmental regulations by
making modifications to the Jeffrey Energy Center without obtaining the proper
permits.  The Jeffrey Energy Center is a coal-fired plant located in
Kansas that is 92% owned by Westar and operated exclusively by
Westar.  GMO has an 8% interest in the Jeffrey Energy Center and is
generally responsible for its 8% share of the facility’s operating costs and
capital expenditures.  On February 4, 2009, the Attorney General of
the United States filed a complaint against Westar alleging that it violated the
Clean Air Act and related federal and state regulations by making major
modifications to the Jeffrey Energy Center beginning in 1994 without first
obtaining appropriate permits authorizing this construction and without
installing and operating best available control technology to control
emissions.  It is possible that Westar could be required to make
significant capital and other expenditures to install and operate new emission
control systems at the Jeffrey Energy Center, surrender emission allowances,
interrupt or shut-down operations at the Jeffrey Energy Center, apply for new or
modified permits, audit Jeffrey Energy Center operations, otherwise
 43
 mitigate
any harm to public health and the environment resulting from the alleged
violations, and pay a civil penalty of up to $37,500 per day for each
violation.  The ultimate outcome of this matter 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 effect on Great Plains Energy’s results of operations, financial
position and cash flows.
  Mercury
Emissions
 In
January 2009, the EPA issued a memorandum stating that new electric steam
generating units (EGUs) that began construction while the Clean Air Mercury Rule
(CAMR) was effective are subject to a new source maximum achievable control
technology (MACT) determination on a case-by-case basis.
  In July
2009, the EPA sent letters notifying KCP&L that MACT determinations and
schedules of compliance are required for coal and oil-fired EGUs that began
actual construction or reconstruction after December 15, 2000, and identified
Iatan No. 2 and Hawthorn No. 5 as affected EGUs.  This was an outcome
of the D.C. Court of Appeals’ vacatur of both the CAMR and the contemporaneously
promulgated rule removing EGUs from MACT requirements.  KCP&L
believes that Hawthorn No. 5 is not an affected EGU, and will provide supporting
documentation to the EPA.  It is not currently known how MACT
determinations and schedules of compliance will impact the permitting or
operating requirements for these two units, but it is possible a MACT
determination may ultimately require additional emission control equipment and
permit limits at Iatan No. 2, Hawthorn No. 5, or both.
  In
October 2009, the EPA reached a proposed settlement to develop proposed MACT
standards for mercury and potentially other hazardous air pollutant emissions by
March 2011 and final standards by November 2011.  These MACT standards, if
adopted, could impact both KCP&L’s and GMO’s new and existing
facilities.
  The
estimated required environmental expenditures of $0.8 billion - $1 billion,
discussed above, do not reflect any amounts for compliance with MACT
determinations and future MACT standards because management cannot predict the
outcome of further judicial, administrative or regulatory actions or their
financial or operational effects on Great Plains Energy and
KCP&L.  However, such actions could have a significant effect on
Great Plains Energy’s and KCP&L’s results of operations, financial position
and cash flows.
  Greenhouse
Gases
 Legislation
concerning the reduction of emissions of greenhouse gases, including CO2,is
being considered at the federal and state levels, and some initial steps toward
definitive regulation have been taken, all with various compliance dates and
reduction strategies.  In addition, laws have been enacted in Kansas
and Missouri, the states in which the Company’s electric utility subsidiaries
operate, establishing renewable resource standards.  Greenhouse gas
regulation has the potential of having significant financial and operational
impacts on KCP&L and GMO, including with respect to achieving compliance
with limits that may be established.  However, the ultimate financial
and operational consequences to Great Plains Energy and KCP&L cannot be
determined until legislation is passed or regulations
enacted.  Management will continue to monitor the progress of relevant
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.
  The
American Clean Energy and Security Act of 2009 (Act) passed the U.S. House of
Representatives in June 2009.  The Act would establish a 20 percent
renewable electricity standard (Federal RES) by 2020, starting with an initial 6
percent requirement by 2012.  The Act would also establish a
greenhouse gas cap and trade program, requiring KCP&L, GMO and other
affected entities to comply by surrendering allowances or offsets for each ton
of greenhouse gas emitted.  The number of allowances would be
initially set and then reduced over time, with the projected effect of reducing
greenhouse gasemissions below 2005 levels by3 percent, 17 percent, 42 percent, and 83
percent by 2012, 2020, 2030, and 2050, respectively.  In addition, the
Act would establish CO2emission
performance standards for new coal-fired units that receive an initial permit
after January 1, 2009.
 44
 The Act
is complex, and there are many aspects of the Act that cannot be reasonably
estimated, including the availability and price of allowances and offsets in the
market to be established by the Act.  As well, it is not possible to
reasonably project the provisions of greenhouse gas legislation that may
ultimately be enacted by Congress.  Subject to these qualifications
and uncertainties, management currently projects that KCP&L and GMO would be
allocated up to approximately 60% and 50%, respectively, fewer allowances than
needed to cover their projected 2012 CO2
emissions (assuming no change in operations).  KCP&L and GMO would
be required to reduce emissions, purchase allowances or offsets, or a
combination of both.  KCP&L and GMO would seek recovery of
compliance costs in rates; however, there is no assurance regarding the timing
or amount of compliance costs recovery.  The ultimate annual cost of
compliance with the Federal RES and the cap and trade program cannot be
estimated at this time, but could be in an initial range of about $300 million
to $800 million for Great Plains Energy, including $200 million to $600 million
for KCP&L.  These potential costs could require initial electric
rate increases aggregating about 15% to 45% for Great Plains Energy, including
20% to 50% for KCP&L.  As the number of allowances is reduced, and
the Federal RES increases over time, the costs and resulting electric rate
increases would increase from the initial levels.  Additional
greenhouse gas bills may be introduced in Congress, but the provisions of any
legislation that may be enacted, including when and to what extent such
legislation will regulate CO2, cannot be
determined at this time.
  Even if
there are no new Congressional mandates, the EPA is considering the regulation
of greenhouse gases under the existing Clean Air Act.  In 2007, the
U.S. Supreme Court determined that greenhouse gases are air pollutants covered
by the Clean Air Act.  The Court held that the EPA must determine
whether or not emissions of greenhouse gases from new motor vehicles cause or
contribute to air pollution which may reasonably be anticipated to endanger
public health or welfare.  In April 2009, the EPA proposed two
distinct findings regarding greenhouse gases under the Clean Air
Act.  In the first finding, referred to as the endangerment finding,
the EPA proposed that the current and projected concentrations of the mix of six
greenhouse gases, including CO2, in the
atmosphere threaten the public health and welfare of current and future
generations.  In the second finding, referred to as the cause or
contribute finding, the EPA proposed that the combined emissions of greenhouse
gases from new motor vehicles and motor vehicle engines contribute to the
atmospheric concentrations of these greenhouse gases and therefore, contribute
to the threat of climate change.  The EPA further indicated that this
proposed finding would not itself impose any requirements on industry because an
endangerment finding under one provision of the Clean Air Act would not by
itself automatically trigger regulation under the entire Clean Air
Act.
  In
December 2008, the EPA issued an interpretive memo declaring that CO2 is not
currently subject to regulation under the Federal Prevention of Significant
Deterioration (PSD) program; however, in September 2009, the EPA announced that
it plans to reconsider the interpretive memo and is seeking comments on various
interpretations of when a pollutant is subject to regulation under the Clean Air
Act for the purposes of triggering the PSD permitting
requirements.  In September 2009, the EPA issued a final rule for
mandatory greenhouse gas reporting from large greenhouse gas emissions sources
which would include most of KCP&L’s and GMO’s generating
facilities.  In addition, in September 2009, the EPA announced a
proposed rule that focuses on large facilities emitting over 25,000 tons of
greenhouse gas emissions per year.  The proposed rule would establish
new thresholds for greenhouse gas emissions defining when Clean Air Act permits
under the New Source Review and Title V operating permits programs would be
required for new or existing industrial facilities.  Most of
KCP&L’s and GMO’s generating facilities would be subject to the proposed New
Source Review program greenhouse gas provisions.  The EPA could also
propose rulemaking specific to New Source Performance Standards or other
programs as identified in the EPA’s July 2008 advanced notice of proposed
rulemaking on the ramifications of regulating greenhouse gas emissions under the
Clean Air Act.  These proposed and potential rules may ultimately
regulate greenhouse gas emissions, which may include such emissions from
KCP&L and GMO facilities.
  At the
state level, a Kansas law enacted in May 2009 requires Kansas public electric
utilities, including KCP&L, to have renewable energy generation capacity
equal to at least 10% of their three-year average Kansas peak retail demand by
2011.  The percentage increases to 15% by 2016 and 20% by
2020.  A Missouri law enacted in November 2008 requires at least 2% of
the electricity provided by Missouri investor-owned utilities (including
 45
 KCP&L
and GMO) to their Missouri retail customers to come from renewable resources,
including wind, solar, biomass and hydropower, by 2011, increasing to 5% in
2014, 10% in 2018, and 15% in 2021, with a small portion (estimated to be about
2 MW for each of KCP&L and GMO in 2011) required to come from solar
resources.  Regulations implementing these laws are being drafted by
the MPSC and KCC, and the ultimate impacts on KCP&L and GMO cannot be
reasonably estimated at this time.  However, there is a potential that
KCP&L could be required to add up to 115 MW in additional renewable energy
resources, including 2 MW of solar resources, by 2011, which could be satisfied
through ownership, purchase power agreements or renewable energy
credits.  See Note 7 for a discussion of the Collaboration Agreement
wind generation commitments and current wind project updates.  Subject
to the final MPSC regulations, GMO expects that its existing renewable resources
will achieve compliance with the Missouri standards until 2014, except for the
solar resources requirement.  KCP&L and GMO issued a request for
proposals for solar resources, and are evaluating the
responses.  Additionally, in November 2007, governors from six
Midwestern states, including Kansas, signed the Midwestern Greenhouse Gas
Reduction Accord, which has established the goal of reducing member states’
greenhouse gas emissions to 15% to 20% below 2005 levels by 2020, and 60% to 80%
below 2005 levels by 2050.
  Ozone
and NO2
 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 and
GMO’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 the violation but has
not yet acted.  At this time, management is unable to predict how the
EPA will respond or how that response will impact KCP&L’s and GMO’s
operations.  However, the EPA’s response could have a significant
effect on Great Plains Energy's and KCP&L's results of operations, financial
position and cash flows.
  In March
2008, the EPA significantly strengthened its NAAQS for ground-level
ozone.  The EPA revised the primary eight-hour ozone standard,
designed to protect public health, to a level of 0.075 parts per million
(ppm).  The EPA also strengthened 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,
were effectively 0.084 ppm.  In September 2009, the EPA announced it
would reconsider the 2008 NAAQS for ground-level ozone.  The EPA
indicated it will propose any needed revisions to the ozone standards in the
next year including a revised implementation schedule.
  In March
2009, the Missouri Department of Natural Resources (MDNR) and KDHE submitted to
the EPA their determinations that the Kansas City area is a nonattainment
area.  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’s and GMO’s
operations will not be known until after the final nonattainment designations
and the state implementation plans are submitted, it could have a significant
effect on Great Plains Energy’s and KCP&L’s results of operations, financial
position and cash flows.
  In June
2009, the EPA proposed to strengthen the primary NAAQS for nitrogen dioxide
(NO2).  The
EPA is proposing to establish a new 1-hour NO2 standard
at a level between 0.080 to 0.100 ppm.  The EPA is taking comment on
alternative levels for the 1-hour standard down to 0.065 ppm.  The EPA
is proposing to retain the current annual average NO2 standard
of 0.053 ppm.  As an alternative to the proposed approach, the EPA is
requesting comment on supplementing the current annual standard with a
community-wide 1-hour NO2 standard
in the range of 0.050 to 0.075 ppm.  Although the impact on
KCP&L’s and GMO’s operations will not be known until after the final rules
are promulgated, nonattainment designations approved, and the state
implementation plans submitted, it could have a significant effect on Great
Plains Energy’s and KCP&L’s results of operations, financial position and
cash flows.
 46
 Montrose
Station Notice of Violation
 In June
2009, KCP&L received notification from the MDNR alleging that its Montrose
Station had excess particulate matter emissions in 2008.  KCP&L is
working with the MDNR to resolve this issue and management believes the outcome
will have an insignificant impact to Great Plains Energy’s and KCP&L’s
results of operations, financial position and cash flows.
  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.  Section 316(b) of the Act is designed to protect aquatic
life from being killed or injured by 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 2009, the U.S. Supreme Court ruled that the EPA
permissibly relied on cost-benefit analysis in setting the national performance
standards and in providing for cost-benefit variances from those standards as
part of the applicable 316(b) regulations for minimizing adverse environmental
impact at cooling water intake structures.  At this time, management
is unable to predict how the EPA will respond or how that response will impact
KCP&L’s and GMO’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 Station and at GMO’s Sibley and Lake Road
Stations.
  In
September 2009, the EPA announced plans to revise the existing standards for
water discharges from coal-fired power plants.  Until a rule is
proposed and finalized, the financial and operational impacts to Great Plains
Energy and KCP&L cannot be determined.
  Coal
Combustion Products
 Since an
incident at an ash containment area in December 2008 at a Tennessee Valley
Authority site, federal legislation has been introduced and information requests
issued regarding the handling and disposal of coal combustion
products.  In addition, the EPA has indicated it will issue proposed
federal regulations for coal combustion product disposal by the end of this
year.  Coal combustion product-related legislation or regulation has
the potential of having a significant financial and operational impact on
KCP&L and GMO in connection with achieving compliance with the requirements
that may be established.  However, the financial and operational
consequences to Great Plains Energy and KCP&L cannot be determined until
final legislation is passed or regulations enacted.
  Environmental
Remediation
 Some
federal and state laws hold current and previous owners or operators of real
property, and any person who arranges for the disposal or treatment of hazardous
substances at a property, liable for the costs of cleaning up contamination at
or migrating from such real property, even if they did not know of and were not
responsible for such contamination.  Certain laws also authorize the
EPA and other agencies to issue orders compelling potentially responsible
parties to clean up sites that are determined to present an actual or potential
threat to human health or the environment.  GMO is named as a
potentially responsible party at two disposal sites for polychlorinated
biphenyls (PCBs), and retains some environmental liability for several
operations and investments it no longer owns.  In addition, GMO also
owns, or has acquired liabilities from companies that once owned or operated,
former manufactured gas plant (MGP) sites, which are subject to the supervision
of the EPA and various state environmental agencies.
 47
 At
September 30, 2009, and December 31, 2008, KCP&L had $0.3 million accrued
for environmental remediation expenses.  The accrual covers ground
water monitoring at a former MGP site.  At September 30, 2009, Great
Plains Energy had $0.5 million accrued for environmental remediation expenses,
which includes the $0.3 million at KCP&L, and additional potential
remediation and ground water monitoring costs relating to two GMO
sites.  The amounts accrued were established on an undiscounted basis
and Great Plains Energy and KCP&L do not currently have an estimated time
frame over which the accrued amounts may be paid.
  In
addition to the $0.5 million accrual above, at September 30, 2009, Great Plains
Energy had $2.0 million accrued for the future investigation and remediation of
certain additional GMO identified MGP sites, PCB sites and retained
liabilities.  This estimate was based upon review of the potential
costs associated with conducting investigative and remedial actions at
identified sites, as well as the likelihood of whether such actions will be
necessary.  There are also additional costs that are considered to be
less likely but still reasonably possible to be incurred at these
sites.  Based upon the results of studies at these sites and knowledge
and review of potential remedial actions, it is reasonably possible that these
additional costs could exceed the estimate by approximately $1.3
million.  This estimate could change materially after further
investigation, and could also be affected by the actions of environmental
agencies and the financial viability of other potentially responsible
parties.
  GMO has
pursued recovery of remediation costs from insurance carriers and other
potentially responsible parties.  As a result of a settlement with an
insurance carrier, approximately $2.1 million in insurance proceeds less an
annual deductible is available to GMO to recover qualified MGP remediation
expenses.  GMO would seek recovery of additional remediation costs and
expenses through rate increases; however, there can be no assurance that such
rate increases would be granted.
  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.  Union Pacific did not appeal the
decision.  KCP&L has received approximately $3.5 million for
reparations and interest for 2006 and 2007 coal
deliveries.  Reparations for 2008 will be calculated after the STB
determines the railroad cost of capital for 2008.  In August 2009,
KCP&L and Union Pacific executed a joint stipulation that defines the
methodology for calculating future rates.
  KCP&L
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.  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
held that Travelers is not entitled to any recovery from
KCP&L.  Travelers appealed this decision on March 11,
2009.
 48
 KCP&L
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
was on a court-ordered stay to allow for some of the earlier cases to be decided
first by an appellate court; however, the case entered the discovery phase
in May 2009 and could be set for trial sometime in 2010.  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.
  Iatan
Levee Litigation
 On May
22, 2009, several farmers filed suit against Great Plains Energy and KCP&L
in the Circuit Court of Platte County, Missouri, alleging negligence, private
nuisance, trespass and violations of the Missouri Crop Protection
Act.  These allegations stem from flooding at or near the Iatan
Station in 2007 and 2008.  The farmers allege the flooding was a
result of maintenance of a nearby levee.  The petition seeks class
certification from the courts.  Management cannot predict the outcome
of this matter.
  GMO
Price Reporting Litigation
 In
response to complaints of manipulation of the California energy market, in 2002
FERC issued an order requiring net sellers of power in the California markets
from October 2, 2000, through June 20, 2001, at prices above a FERC
determined competitive market clearing price to make refunds to net purchasers
of power in the California market during that time period.  Because
MPS Merchant was a net purchaser of power during the refund period it has
received approximately $8 million in refunds.  MPS Merchant estimates
that it is entitled to approximately an additional $10 million in refunds under
the standards FERC has used in this case.  FERC has stated that
interest will be applied to the refunds but the amount of interest has not yet
been determined.  However, various parties appealed the FERC order to
the United States Court of Appeals for the Ninth Circuit seeking review of a
number of issues, including changing the refund period to include periods prior
to October 2, 2000.  MPS Merchant was a net seller of power
during the period prior to October 2, 2000.  On August 2, 2006, the
U.S. Court of Appeals for the Ninth Circuit issued an order finding, among other
things, that FERC did not provide a sufficient justification for refusing to
exercise its remedial authority under the Federal Power Act to determine whether
market participants violated FERC-approved tariffs during the period prior to
October 2, 2000, and imposing a remedy for any such violations.  The
court remanded the matter to FERC to determine whether tariff violations
occurred and, if so, the appropriate remedy.  In March 2008, FERC
issued an order declining to order refunds for the period prior to October 2,
2000.  That order has been appealed to the U.S. Court of Appeals for
the Ninth Circuit.  If FERC ultimately includes that period, MPS
Merchant could be found to owe refunds.
  FERC
initiated a docket, generally referred to as the Pacific Northwest refund
proceeding, to determine if any refunds were warranted related to the potential
impact of the California market issues on buyers in the Pacific Northwest
between December 25, 2000, and June 20, 2001.  FERC rejected the
refund requests, but its decision was remanded by the Court of Appeals for FERC
to consider whether any acts of market manipulation support the imposition of
refunds.  Claims against MPS Merchant total $5.1 million.
  On
October 6, 2006, the MPSC filed suit in the Circuit Court of Jackson County,
Missouri against 18 companies, including GMO and MPS Merchant alleging that the
companies manipulated natural gas prices through the misreporting of natural gas
trade data and, therefore, violated Missouri antitrust laws.  The suit
does not specify alleged damages and was filed on behalf of all local
distribution gas companies in Missouri who bought and sold natural gas from June
2000 to October 2002.  The defendants’ motions to dismiss the case
were granted in January 2009.  The MPSC has appealed the dismissal to
the Missouri Court of Appeals for the Western District of Missouri.
 49
 The
ultimate outcome of these matters cannot be predicted.
  GMO
South Harper Peaking Facility
 GMO
constructed a 315 MW natural gas power plant and related substation in an
unincorporated area of Cass County, Missouri.  Cass County and local
residents filed suit claiming that county approval was required to construct the
project.  In April 2008, GMO entered into an agreement with Cass
County pursuant to which it filed and Cass County approved a land use
application for the South Harper facilities.  GMO entered into a final
settlement agreement with the members of StopAquila.org, an unincorporated
association of approximately 100 individuals who opposed the facilities, and has
settled all seven of the original private lawsuits filed by Cass County
residents alleging that the facilities constitute a public and private
nuisance.  In August 2008, a law took effect that granted the MPSC the
authority to retroactively approve the development and construction of the South
Harper facilities.  GMO filed an application with the MPSC and reached
a stipulation and agreement with the parties.  On March 18, 2009, the
MPSC issued an order approving the agreement.
  GMO
Coal Supply Litigation
 In the
spring of 2005, one of GMO’s coal suppliers, C.W. Mining, terminated a
long-term, fixed price coal supply agreement allegedly because of a force
majeure event.  GMO incurred significant costs procuring replacement
coal and disputed that the supplier was entitled to terminate the
contract.  GMO filed a lawsuit against the supplier in federal court
in Salt Lake City and the trial was held in February 2007.  On October
29, 2007, the United States District Court for the District of Utah, Central
Division held that C.W. Mining's performance under the coal contract was not
excused by a force majeure event and awarded GMO $24.8 million in
damages.  In order to preserve and recover on its claim, on January 8,
2008, GMO participated in the filing of an involuntary Chapter 11 bankruptcy
petition against C.W. Mining in the United States Bankruptcy Court in Salt Lake
City, Utah.  In September 2008, the Bankruptcy Court granted GMO’s
motions for partial summary judgment, effectively putting C.W. Mining into
bankruptcy.  On November 11, 2008, GMO’s Motion to Appoint a Trustee
was granted.
  Everest
Minority Shareholder Litigation
 On
October 11, 2006, minority shareholders of a former subsidiary of GMO brought
suit against GMO in Circuit Court in St. Charles County, Missouri, asserting
that they are entitled to put their shares to GMO for approximately $5 million
because the subsidiary failed to obtain 30,000 customers by the end of
2004.  Under the put agreement, if there was a dispute regarding the
customer count, it was to be resolved by an audit firm.  GMO has paid
$2.3 million to the minority shareholders under related market-based put
provisions.  The audit firm issued a report stating that the customer
count was met.  In October 2009, the parties settled this
case.  The settlement will not have a significant impact to Great
Plains Energy’s results of operations or financial position.
  SEC
Informal Inquiry
 The
enforcement staff of the SEC conducted an informal inquiry relating to common
stock relinquishments by certain officers on February 6 and 7, 2009, shortly
before issuance of the Company’s February 10, 2009, press release disclosing,
among other things, a reduction in its common stock dividend.  The
relinquished stock represented a portion of restricted shares issued in 2006 and
2007 pursuant to the Company’s Amended Long-Term Incentive Plan, all of which
vested on February 6 and 7, 2009.  The officers elected to relinquish
a portion of the vested shares, in lieu of paying cash, to the Company to meet
their withholding tax obligations which arose in connection with the vesting of
those shares.  On February 10, 2009, those officers with reporting
obligations under the federal securities laws filed Forms 4 with the SEC
disclosing their relinquishments.  On June 24, 2009, Great Plains
Energy was formally notified that the staff’s inquiry has been completed and
that staff does not intend to recommend any enforcement action by the
SEC.
  15.
              RELATED
      PARTY TRANSACTIONS AND
RELATIONSHIPS
  KCP&L
employees manage GMO’s business and operate its facilities at
cost.  These costs totaled $24.6 million and $75.2 million,
respectively, for the three months ended and year to date September 30, 2009,
and $23.0 million for the same periods in 2008.  Additionally,
KCP&L and GMO engage in wholesale electricity
 50
 transactions
with each other.  In 2008, KCP&L received various support and
administrative services from Services and for the three months ended and year to
date September 30, 2008, these costs totaled $2.7 million and $10.2 million,
respectively.  In December 2008, employees and assets of Services were
transferred to KCP&L.  KCP&L and GMO are also authorized to
participate in the Great Plains Energy money pool.  The money pool is
an internal financing arrangement in which funds deposited into the money pool
may be lent on a short-term basis to KCP&L and GMO.
  The
following table summarizes KCP&L’s related party receivables and
payables.


September
      30
            
            December
      312009
            
            2008(millions)Receivable
      from GMO
            
            $
            16.2
            
            
            $
            23.7Receivable
      from Services
            
            
            0.3
            
            
            
            4.8Payable
      to Great Plains Energy
            
            
            (26.2
            )
            
            
            (1.2
            )Payable
      to MPS Merchant
            
            
            (3.4
            )
            
            
            (3.4
            )


16.
              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.  Commodity
risk management activities, including the use of certain derivative instruments,
are subject to the management, direction and control of an internal risk
management committee.  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 purchase normal sale 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 of derivative instruments are
recognized currently in net income unless specific hedge accounting criteria are
met, except GMO utility operations hedges that are recorded to a regulatory
asset or liability consistent with MPSC regulatory orders, as discussed
below.
  The
Company has posted collateral, in the normal course of business, for the
aggregate fair value of all derivative instruments with credit risk-related
contingent features that are in a liability position.  If the credit
risk-related contingent features underlying these agreements were triggered, the
Company would be required to post an insignificant amount of collateral to its
counterparties.
  Interest
Rate Risk Management
 Forward
Starting Swaps
 In July
2007, Great Plains Energy entered into three 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 removed most of the interest
rate and credit spread uncertainty with respect to debt to be issued, thereby
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 GMO acquisition and were treated as economic hedges
(non-hedging derivatives).  Due to a change in financing plans during
the second quarter of 2008, Great Plains Energy redesignated the FSS from
economic hedges to cash flow hedges.  Prior to the redesignation, the
change in the fair value of the FSS increased interest expense by $9.2 million
year to date June 30, 2008.  Subsequent to the redesignation, the FSS
were accounted for
 51
 as cash
flow hedges and no ineffectiveness was recorded on the FSS since June 30,
2008.  Due to another change in financing plans, Great Plains Energy
assigned the FSS to KCP&L.  In the first quarter of 2009,
KCP&L issued $400.0 million of long-term debt and the FSS settled
simultaneously with the issuance of this long-term fixed rate debt.  A
pre-tax loss of $53.4 million was recorded to OCI and is being reclassified to
interest expense over the life of the ten-year debt.  For the three
months ended and year to date September 30, 2009, $1.2 million and $2.6 million,
respectively, of the loss has been reclassified from OCI to interest
expense.
  Treasury
Locks
 In the
first quarter of 2008, KCP&L issued $350.0 million of long-term debt and
settled three T-Locks 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 September 30, 2008, included 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 ten-year debt.  For the three months
ended and year to date September 30, 2009, $0.9 million and $3.0 million,
respectively, of the loss has been reclassified from OCI to interest
expense.  For the three months ended and year to date September 30,
2008, $1.0 million and $2.2 million, respectively, of the loss was reclassified
from OCI to interest expense.
  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 September 30, 2009, KCP&L has hedged 4% of both 2010
and 2011 projected natural gas usage for retail load and firm MWh sales,
primarily by utilizing futures 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, any ineffective portion of the change in fair market value would be
recorded currently in fuel expense.
  KCP&L
uses derivative instruments to mitigate its exposure to market price
fluctuations on a portion of the projected fuel oil purchases to meet the
startup requirements for Iatan No. 2.  At September 30, 2009,
KCP&L has hedged 24% of the projected fuel oil purchases for the startup of
Iatan No. 2 utilizing futures contracts.  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.
  GMO’s
price risk policy is to use derivative instruments to mitigate price exposure to
natural gas price volatility in the market.  This program extends
multiple years and the mark-to-market value of the portfolio relates to
financial contracts that will settle against actual purchases of natural gas and
purchased power in 2009 through 2011.  At September 30, 2009, GMO had
financial contracts in place to hedge approximately 45%, 31% and 2% of the
expected on-peak natural gas and natural gas equivalent purchased power price
exposure for the remainder of 2009, 2010 and 2011, respectively.  In
connection with GMO’s 2005 Missouri electric rate case, it was agreed that the
settlement costs of these contracts would be recognized in fuel
expense.  The settlement cost is included in GMO’s Missouri fuel
adjustment clause.  A regulatory asset has been recordedto reflect the change
in the timing of recognition authorized by the MPSC.  To the extent
that recovery of actual costs incurred is allowed, amounts will not impact
earnings, but will impact cash flows due to the timing of the recovery
mechanism.
  MPS
Merchant manages the daily delivery of its remaining contractual commitments to
reduce its exposure to changes in market prices with economic hedges
(non-hedging derivative).  Within the trading portfolio, MPS Merchant
takes certain positions to hedge physical sale or purchase
contracts.  MPS Merchant records trading energy contracts, both
physical and financial, at fair value in accordance with GAAP for derivatives
and hedging.  Changes in fair value are recorded in the consolidated
statements of income and on the consolidated balance sheets in derivative assets
or liabilities.
 52
 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.  The fair values below are gross values before netting of cash
collateral.


September
      30
            
            
            December
      312009
            
            
            2008Notional
            
            
            
            
            
            NotionalContract
            
            
            Fair
            
            
            Contract
            
            
            FairAmount
            
            
            Value
            
            
            Amount
            
            
            ValueGreat
      Plains Energy
            
            (millions)Swap
      contractsCash
      flow hedges
            
            $
            -
            
            
            $
            -
            
            
            $
            0.7
            
            
            $
            (0.2
            )Non-hedging
      derivatives
            
            
            -
            
            
            
            -
            
            
            
            46.2
            
            
            
            (7.4
            )Futures
      contractsCash
      flow hedges
            
            
            3.9
            
            
            
            0.2
            
            
            
            4.5
            
            
            
            0.6Non-hedging
      derivatives
            
            
            29.7
            
            
            
            (0.8
            )
            
            
            -
            
            
            
            -Forward
      contractsNon-hedging
      derivatives
            
            
            249.7
            
            
            
            9.6
            
            
            
            317.3
            
            
            
            7.8Option
      contractsNon-hedging
      derivatives
            
            
            2.0
            
            
            
            -
            
            
            
            28.2
            
            
            
            0.2Anticipated
      debt issuanceForward
      starting swap
            
            
            -
            
            
            
            -
            
            
            
            250.0
            
            
            
            (80.1
            )KCP&LSwap
      contractsCash
      flow hedges
            
            
            -
            
            
            
            -
            
            
            
            0.7
            
            
            
            (0.2
            )Future
      contractsCash
      flow hedges
            
            
            3.9
            
            
            
            0.2
            
            
            
            4.5
            
            
            
            0.6Anticipated
      debt issuanceForward
      starting swap
            
            
            -
            
            
            
            -
            
            
            
            250.0
            
            
            
            (80.1
            )


The fair
value of Great Plains Energy’s and KCP&L’s open derivative positions are
summarized in the following tables.  The tables contain derivative
instruments designated as hedging instruments as well as derivative instruments
not designated as hedging instruments (non-hedging derivatives) under GAAP for
derivatives.  The fair values below are gross values before netting of
cash collateral.


Great
      Plains EnergyBalance
      Sheet
              
              Asset
      Derivatives
              Liability
      DerivativesSeptember
      30, 2009
              
              Classification
              
              Fair
      Value
              Fair
      ValueDerivatives
      Designated as Hedging Instruments
              
              
              
              (millions)Commodity
      contracts
              
              Derivative
      instruments
              
              $       0.3
              
              $         0.1Derivatives
      Not Designated as Hedging InstrumentsCommodity
      contracts
              
              Derivative
      instruments
              
              10.1
              
              1.3Total
      Derivatives
              
              
              
              $     10.4
              
              $         1.4


KCP&LBalance
      Sheet
            
            Asset
      Derivatives
            Liability
      DerivativesSeptember
      30, 2009
            
            Classification
            
            Fair
      Value
            Fair
      ValueDerivatives
      Designated as Hedging Instruments
            
            
            
            (millions)Commodity
      contracts
            
            Derivative
      instruments
            $       0.3
            
            $         0.1


53


The
following tables summarize the amount of gain (loss) recognized in OCI or
earnings for interest rate and commodity hedges.


Derivatives
      in Cash Flow Hedging RelationshipGain
      (Loss) Reclassified fromAccumulated
      OCI into Income(Effective
      Portion)Amount
      of Gain(Loss)
      Recognizedin
      OCI on Derivatives
            
            Income
      StatementGreat
      Plains Energy
            
            (Effective
      Portion)
            
            Classification
            
            AmountThree
      Months Ended September 30, 2009
            
            (millions)
            
            
            
            (millions)Interest
      rate contracts
            
            $
            -
            
            Interest
      charges
            
            $
            (2.1
            )Commodity
      contracts
            
            
            (0.6)
            
            Fuel
            
            
            (1.1
            )Income
      tax benefit (expense)
            
            
            0.2
            
            Income
      tax benefit (expense)
            
            
            1.1Total
            
            $
            (0.4)
            
            Total
            
            $
            (2.1
            )Year
      to Date September 30, 2009Interest
      rate contracts
            
            $
            1.0
            
            Interest
      charges
            
            $
            (5.6
            )Commodity
      contracts
            
            
            (0.9)
            
            Fuel
            
            
            (1.1
            )Income
      tax benefit (expense)
            
            
            -
            
            Income
      tax benefit (expense)
            
            
            2.6Total
            
            $
            0.1
            
            Total
            
            $
            (4.1
            )KCP<hree
      Months Ended September 30, 2009Interest
      rate contracts
            
            $
            -
            
            Interest
      charges
            
            $
            (2.2
            )Commodity
      contracts
            
            
            (0.6)
            
            Fuel
            
            
            (1.1
            )Income
      tax benefit (expense)
            
            
            0.2
            
            Income
      tax benefit (expense)
            
            
            1.3Total
            
            $
            (0.4)
            
            Total
            
            $
            (2.0
            )Year
      to Date September 30, 2009Interest
      rate contracts
            
            $
            1.0
            
            Interest
      charges
            
            $
            (5.3
            )Commodity
      contracts
            
            
            (0.9)
            
            Fuel
            
            
            (1.1
            )Income
      tax benefit (expense)
            
            
            -
            
            Income
      tax benefit (expense)
            
            
            2.5Total
            
            $
            0.1
            
            Total
            
            $
            (3.9
            )


54


The
following tables summarize the amount of gain (loss) recognized in a regulatory
balance sheet account or earnings for GMO utility commodity
hedges.  GMO utility commodity derivatives fair value changes are
recorded to either a regulatory asset or liability consistent with MPSC
regulatory orders.


Derivatives
      in Regulatory Account RelationshipGain
      (Loss) Reclassified fromRegulatory
      AccountAmount
      of Gain (Loss)Recognized
      on RegulatoryAccount
      on Derivatives
            Income
      StatementGreat
      Plains Energy
            
            (Effective
      Portion)
            Classification
            AmountThree
      Months Ended September 30, 2009
            
            (millions)
            
            
            (millions)Commodity
      contracts
            
            $     (0.2)
            Fuel
            
            $   (10.9)Total
            
            
            $     (0.2)
            Total
            
            $   (10.9)Year
      to Date September 30, 2009Commodity
      contracts
            
            $   (11.1)
            Fuel
            
            $   (17.0)Total
            
            
            $   (11.1)
            Total
            
            $   (17.0)


Great
Plains Energy’s income statement reflects gains for the change in fair value of
the MPS Merchant commodity contract derivatives not designated as hedging
instruments of $1.4 million and $2.0 million for the three months ended and year
to date September 30, 2009, respectively.
  The
amounts recorded in accumulated OCI related to the cash flow hedges are
summarized in the following table.


Great
      Plains Energy
            
            
            KCP&LSeptember
      30
            
            December
      31
            
            September
      30
            
            December
      312009
            
            2008
            
            2009
            
            2008(millions)Current
      assets
            
            $
            13.2
            
            
            $
            13.7
            
            
            $
            13.2
            
            
            $
            13.7Current
      liabilities
            
            
            (87.1
            )
            
            
            (94.6
            )
            
            
            (83.5
            )
            
            
            (90.5
            )Deferred
      income taxes
            
            
            28.7
            
            
            
            31.5
            
            
            
            27.4
            
            
            
            29.9Total
            
            $
            (45.2
            )
            
            $
            (49.4
            )
            
            $
            (42.9
            )
            
            $
            (46.9
            )


Great
Plains Energy’s accumulated OCI in the table above at September 30, 2009,
includes $9.9 million that is expected to be reclassified to expenses over the
next twelve months.  KCP&L’s accumulated OCI includes $8.5 million
that is expected to be reclassified to expense over the next twelve
months.
 55
 The
amounts reclassified to expenses are summarized in the following
table.


Three
      Months Ended
            
            Year
      to DateSeptember
      30
            
            
            September
      302009
            
            
            2008
            
            
            2009
            
            
            2008Great
      Plains Energy
            
            (millions)Fuel
      expense
            
            $
            1.1
            
            
            $
            (1.6
            )
            
            $
            1.1
            
            
            $
            (2.3
            )Interest
      expense
            
            
            2.1
            
            
            
            0.9
            
            
            
            5.6
            
            
            
            2.0Income
      tax benefit (expense)
            
            
            (1.1
            )
            
            
            0.3
            
            
            
            (2.6
            )
            
            
            0.1Loss
      from discontinued operationsPurchased
      power expense
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (106.1
            )Income
      tax benefit (expense)
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            43.8OCI
            
            $
            2.1
            
            
            $
            (0.4
            )
            
            $
            4.1
            
            
            $
            (62.5
            )KCP&LFuel
      expense
            
            $
            1.1
            
            
            $
            (1.6
            )
            
            $
            1.1
            
            
            $
            (2.3
            )Interest
      expense
            
            
            2.2
            
            
            
            0.8
            
            
            
            5.3
            
            
            
            1.6Income
      tax benefit (expense)
            
            
            (1.3
            )
            
            
            0.3
            
            
            
            (2.5
            )
            
            
            0.3OCI
            
            $
            2.0
            
            
            $
            (0.5
            )
            
            $
            3.9
            
            
            $
            (0.4
            )


17.
              FAIR
      VALUE MEASUREMENTS
  GAAP
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.  GAAP 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 Great Plains Energy’s and KCP&L’s
various exchange traded derivative instruments and equity and U.S. Treasury
securities that are actively traded within KCP&L’s decommissioning trust
fund and GMO’s SERP rabbi 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 certain debt
securities within KCP&L’s decommissioning trust fund and GMO’s SERP rabbi
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 Great
Plains Energy’s various non-exchange traded derivative instruments traded in
over-the-counter markets and certain debt securities within KCP&L’s
decommissioning trust fund for which sufficiently observable market data is not
available to corroborate the valuation inputs.
 56
 The
following tables include Great Plains Energy’s and KCP&L’s balances of
financial assets and liabilities measured at fair value on a recurring basis at
September 30, 2009, and December 31, 2008.


Fair
      Value Measurements UsingDescription
            
            September
      30
              2009
            
            
            Netting(c)
            
            
            Quoted
      Prices in Active Markets for Identical Assets
              (Level
      1)
            
            
            Significant
      Other Observable Inputs
              (Level
      2)
            
            
            Significant
      Unobservable Inputs
              (Level
      3)KCP&L
            
            (millions)AssetsDerivative
      instruments (a)
            
            $
            -
            
            
            $
            (0.3
            )
            
            $
            0.3
            
            
            $
            -
            
            
            $
            -Nuclear
      decommissioning trust (b)Equity
      securities
            
            
            42.8
            
            
            
            -
            
            
            
            42.8
            
            
            
            -
            
            
            
            -Debt
      securitiesU.S.
      Treasury
            
            
            21.4
            
            
            
            -
            
            
            
            21.4
            
            
            
            -
            
            
            
            -U.S.
      Agency
            
            
            8.9
            
            
            
            -
            
            
            
            -
            
            
            
            6.1
            
            
            
            2.8State
      and local obligations
            
            
            4.4
            
            
            
            -
            
            
            
            -
            
            
            
            4.0
            
            
            
            0.4Corporate
      bonds
            
            
            22.7
            
            
            
            -
            
            
            
            -
            
            
            
            22.7
            
            
            
            -Mortgage
      backed securities
            
            
            5.6
            
            
            
            -
            
            
            
            -
            
            
            
            0.2
            
            
            
            5.4Foreign
      governments
            
            
            0.7
            
            
            
            -
            
            
            
            -
            
            
            
            0.7
            
            
            
            -Other
            
            
            1.2
            
            
            
            -
            
            
            
            -
            
            
            
            1.2
            
            
            
            -Total
      Nuclear Decommissioning Trust
            
            
            107.7
            
            
            
            -
            
            
            
            64.2
            
            
            
            34.9
            
            
            
            8.6Total
            
            
            107.7
            
            
            
            (0.3
            )
            
            
            64.5
            
            
            
            34.9
            
            
            
            8.6LiabilitiesDerivative
      instruments (a)
            
            
            -
            
            
            
            (0.1
            )
            
            
            -
            
            
            
            0.1
            
            
            
            -Total
            
            $
            -
            
            
            $
            (0.1
            )
            
            $
            -
            
            
            $
            0.1
            
            
            $
            -Other
      Great Plains EnergyAssetsDerivative
      instruments (a)
            
            $
            9.6
            
            
            $
            (0.5
            )
            
            $
            0.5
            
            
            $
            5.3
            
            
            $
            4.3SERP
      rabbi trust (b)Equity
      securities
            
            
            0.2
            
            
            
            -
            
            
            
            0.2
            
            
            
            -
            
            
            
            -Debt
      securities
            
            
            6.8
            
            
            
            -
            
            
            
            -
            
            
            
            6.8
            
            
            
            -Total
      SERP rabbi trust
            
            
            7.0
            
            
            
            -
            
            
            
            0.2
            
            
            
            6.8
            
            
            
            -Total
            
            
            16.6
            
            
            
            (0.5
            )
            
            
            0.7
            
            
            
            12.1
            
            
            
            4.3LiabilitiesDerivative
      instruments (a)
            
            
            -
            
            
            
            (1.3
            )
            
            
            1.3
            
            
            
            -
            
            
            
            -Total
            
            $
            -
            
            
            $
            (1.3
            )
            
            $
            1.3
            
            
            $
            -
            
            
            $
            -Great
      Plains EnergyAssetsDerivative
      instruments (a)
            
            $
            9.6
            
            
            $
            (0.8
            )
            
            $
            0.8
            
            
            $
            5.3
            
            
            $
            4.3Nuclear
      decommissioning trust (b)
            
            
            107.7
            
            
            
            -
            
            
            
            64.2
            
            
            
            34.9
            
            
            
            8.6SERP
      rabbi trust (b)
            
            
            7.0
            
            
            
            -
            
            
            
            0.2
            
            
            
            6.8
            
            
            
            -Total
            
            
            124.3
            
            
            
            (0.8
            )
            
            
            65.2
            
            
            
            47.0
            
            
            
            12.9LiabilitiesDerivative
      instruments (a)
            
            
            -
            
            
            
            (1.4
            )
            
            
            1.3
            
            
            
            0.1
            
            
            
            -Total
            
            $
            -
            
            
            $
            (1.4
            )
            
            $
            1.3
            
            
            $
            0.1
            
            
            $
            -


57


Fair
      Value Measurements UsingDescription
              
              December
      31
                2008
              
              
              Netting(c)
              
              
              Quoted
      Prices in Active Markets for Identical Assets
                (Level
      1)
              
              
              Significant
      Other Observable Inputs
                (Level
      2)
              
              
              Significant
      Unobservable Inputs
                (Level
      3)KCP&L
              
              (millions)AssetsDerivative
      instruments (a)
              
              $
              0.6
              
              
              $
              -
              
              
              $
              -
              
              
              $
              0.6
              
              
              $
              -Nuclear
      decommissioning trust (b)
              
              
              95.2
              
              
              
              -
              
              
              
              52.9
              
              
              
              35.5
              
              
              
              6.8Total
              
              
              95.8
              
              
              
              -
              
              
              
              52.9
              
              
              
              36.1
              
              
              
              6.8LiabilitiesDerivative
      instruments (a)
              
              
              80.3
              
              
              
              -
              
              
              
              -
              
              
              
              80.3
              
              
              
              -Total
              
              $
              80.3
              
              
              $
              -
              
              
              $
              -
              
              
              $
              80.3
              
              
              $
              -Other
      Great Plains EnergyAssetsDerivative
      instruments (a)
              
              $
              17.2
              
              
              $
              (0.7
              )
              
              $
              3.2
              
              
              $
              10.9
              
              
              $
              3.8SERP
      rabbi trust (b)
              
              
              6.7
              
              
              
              -
              
              
              
              0.2
              
              
              
              6.5
              
              
              
              -Total
              
              
              23.9
              
              
              
              (0.7
              )
              
              
              3.4
              
              
              
              17.4
              
              
              
              3.8LiabilitiesDerivative
      instruments (a)
              
              
              5.9
              
              
              
              (11.4
              )
              
              
              10.1
              
              
              
              7.2
              
              
              
              -Total
              
              $
              5.9
              
              
              $
              (11.4
              )
              
              $
              10.1
              
              
              $
              7.2
              
              
              $
              -Great
      Plains EnergyAssetsDerivative
      instruments (a)
              
              $
              17.8
              
              
              $
              (0.7
              )
              
              $
              3.2
              
              
              $
              11.5
              
              
              $
              3.8Nuclear
      decommissioning trust (b)
              
              
              95.2
              
              
              
              -
              
              
              
              52.9
              
              
              
              35.5
              
              
              
              6.8SERP
      rabbi trust (b)
              
              
              6.7
              
              
              
              -
              
              
              
              0.2
              
              
              
              6.5
              
              
              
              -Total
              
              
              119.7
              
              
              
              (0.7
              )
              
              
              56.3
              
              
              
              53.5
              
              
              
              10.6LiabilitiesDerivative
      instruments (a)
              
              
              86.2
              
              
              
              (11.4
              )
              
              
              10.1
              
              
              
              87.5
              
              
              
              -Total
              
              $
              86.2
              
              
              $
              (11.4
              )
              
              $
              10.1
              
              
              $
              87.5
              
              
              $
              -(a)  The
      fair value of derivative instruments is estimated using market quotes,
      over-the-counter forward priced and volatility curves
      andcorrelation
      among fuel prices, net of estimated credit
risk.(b)  Fair
      value is based on quoted market prices of the investments held by the fund
      and/or valuation models.  The total does not include
      cashand
      cash equivalents, which are not subject to the fair value
      requirements.(c)  Represents
      the difference between derivative contracts in an asset or liability
      position presented on a net basis by
      counterpartyon
      the consolidated balance sheet where a master netting agreement exists
      between the Company and the counterparty.At
      September 30, 2009, and December 31, 2008, Great Plains Energy netted $0.6
      million and $10.7 million, respectively, of
cashcollateral
      posted with
counterparties.


58


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 September 30, 2009 and
2008.


Fair
      Value Measurements Using Significant Unobservable Inputs (Level
      3)OtherGreat
            
            GreatPlains
            
            PlainsKCP&L
            
            
            Energy
            
            EnergyMortgageU.S.
            State
      & Local
            
            Backed
            
            
            
            
            
            DerivativeDescription
            
            Agency
            Obligations
            
            Securities
            
            
            Total
            
            
            Instruments
            
            Total(millions)Balance
      July 1, 2009
            
            $
            2.9
            
            
            $
            0.5
            
            
            $
            3.5
            
            
            $
            6.9
            
            
            $
            3.4
            
            
            $
            10.3Total
      realized/unrealized gains or (losses)Included
      in regulatory liability
            
            
            (0.1
            )
            
            
            -
            
            
            
            0.6
            
            
            
            0.5
            
            
            
            -
            
            
            
            0.5Included
      in non-operating income
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            1.0
            
            
            
            1.0Purchase,
      issuances, and settlements
            
            
            -
            
            
            
            -
            
            
            
            1.3
            
            
            
            1.3
            
            
            
            (0.1
            )
            
            
            1.2Transfers
      in and/or out of Level 3
            
            
            -
            
            
            
            (0.1
            )
            
            
            -
            
            
            
            (0.1
            )
            
            
            -
            
            
            
            (0.1
            )Balance
      September 30, 2009
            
            $
            2.8
            
            
            $
            0.4
            
            
            $
            5.4
            
            
            $
            8.6
            
            
            $
            4.3
            
            
            $
            12.9Total
      unrealized gains and (losses) included in non-operatingincome
      relating to assets and liabilities still on theconsolidated
      balance sheet at September 30, 2009
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            1.1
            
            
            $
            1.1


Fair
      Value Measurements Using Significant Unobservable Inputs (Level
      3)OtherGreat
            
            
            GreatPlains
            
            
            PlainsKCP&L
            
            
            Energy
            
            
            EnergyMortgageU.S.
            State
      & Local
            
            Backed
            
            
            
            
            
            DerivativeDescription
            
            Agency
            Obligations
            
            Securities
            
            
            Total
            
            
            Instruments
            
            Total(millions)Balance
      January 1, 2009
            
            $
            3.9
            
            
            $
            -
            
            
            $
            2.9
            
            
            $
            6.8
            
            
            $
            3.8
            
            
            $
            10.6Total
      realized/unrealized gains or (losses)Included
      in regulatory liability
            
            
            0.1
            
            
            
            -
            
            
            
            0.8
            
            
            
            0.9
            
            
            
            -
            
            
            
            0.9Included
      in non-operating income
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            1.2
            
            
            
            1.2Purchase,
      issuances, and settlements
            
            
            (1.2
            )
            
            
            -
            
            
            
            1.7
            
            
            
            0.5
            
            
            
            (0.7
            )
            
            
            (0.2
            )Transfers
      in and/or out of Level 3
            
            
            -
            
            
            
            0.4
            
            
            
            -
            
            
            
            0.4
            
            
            
            -
            
            
            
            0.4Balance
      September 30, 2009
            
            $
            2.8
            
            
            $
            0.4
            
            
            $
            5.4
            
            
            $
            8.6
            
            
            $
            4.3
            
            
            $
            12.9Total
      unrealized gains and (losses) included in non-operatingincome
      relating to assets and liabilities still on theconsolidated
      balance sheet at September 30, 2009
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            0.9
            
            
            $
            0.9


59


Fair
      Value Measurements Using Significant Unobservable Inputs (Level
      3)OtherGreat
            
            GreatPlains
            
            PlainsKCP&L
            Energy
            
            EnergyNuclearDecommissioning
            DerivativeDescription
            Trust
            Instruments
            
            Total(millions)Balance
      July 1, 2008
            
            $
            8.9
            
            
            $
            -
            
            
            $
            8.9GMO
      acquisition July 14, 2008
            
            
            -
            
            
            
            6.6
            
            
            
            6.6Total
      realized/unrealized gains or (losses)Included
      in regulatory liability
            
            
            (0.2
            )
            
            
            -
            
            
            
            (0.2
            )Included
      in non-operating income
            
            
            -
            
            
            
            (2.1
            )
            
            
            (2.1
            )Purchase,
      issuances, and settlements
            
            
            (0.5
            )
            
            
            1.4
            
            
            
            0.9Balance
      September 30, 2008
            
            $
            8.2
            
            
            $
            5.9
            
            
            $
            14.1Total
      unrealized gains and losses included in discontinuedoperations
      relating to assets still on the consolidatedbalance
      sheet at September 30, 2008
            
            $
            -
            
            
            $
            (2.1
            )
            
            $
            (2.1
            )


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
            
            
            $
            28.9GMO
      acquisition July 14, 2008
            
            
            -
            
            
            
            6.6
            
            
            
            6.6Total
      realized/unrealized gains or (losses)Included
      in regulatory liability
            
            
            (0.4
            )
            
            
            -
            
            
            
            (0.4
            )Included
      in non-operating income
            
            
            -
            
            
            
            (2.1
            )
            
            
            (2.1
            )Purchase,
      issuances, and settlements
            
            
            (1.6
            )
            
            
            1.4
            
            
            
            (0.2
            )Transfers
      in and/or out of Level 3
            
            
            3.7
            
            
            
            (16.4
            )
            
            
            (12.7
            )Discontinued
      operations
            
            
            -
            
            
            
            (6.0
            )
            
            
            (6.0
            )Balance
      September 30, 2008
            
            $
            8.2
            
            
            $
            5.9
            
            
            $
            14.1Total
      unrealized gains and losses included in discontinuedoperations
      relating to assets still on the consolidatedbalance
      sheet at September 30, 2008
            
            $
            -
            
            
            $
            (2.1
            )
            
            $
            (2.1
            )


On
January 1, 2009, Great Plains Energy and KCP&L adopted the fair value
measurement and disclosure requirements for 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.  Management evaluated the impact of adoption to those
nonfinancial assets and liabilities and determined there was no significant
impact on Great Plains Energy's and KCP&L's fair value measurement
processes.
 60
 In April
2009, the FASB issued additional guidance for estimating fair value when the
volume and level of activity for the asset or liability have significantly
decreased and guidance on identifying circumstances that indicate a transaction
is not orderly that became effective in the second quarter of 2009 for Great
Plains Energy and KCP&L.  Management determined there was no
significant impact on Great Plains Energy's and KCP&L's fair value
measurement processes.
  In August
2009, the FASB issued additional guidance to clarify the principles on fair
value measurement of liabilities.  Management determined there was no
significant impact on Great Plains Energy's and KCP&L's fair value
measurement processes upon adoption in the fourth quarter of 2009.
  18.
              TAXES
  Components
of income tax expense are detailed in the following tables.


Three
      Months Ended
            
            
            Year
      to DateSeptember
      30
            
            
            September
      30Great
      Plains Energy
            
            2009
            
            
            2008
            
            
            2009
            
            
            2008Current
      income taxes
            
            (millions)Federal
            
            $
            16.1
            
            
            $
            30.3
            
            
            $
            (1.3
            )
            
            $
            10.6State
            
            
            1.1
            
            
            
            (5.3
            )
            
            
            (2.6
            )
            
            
            1.0Foreign
            
            
            -
            
            
            
            -
            
            
            
            1.2
            
            
            
            -Total
            
            
            17.2
            
            
            
            25.0
            
            
            
            (2.7
            )
            
            
            11.6Deferred
      income taxesFederal
            
            
            (5.8
            )
            
            
            3.5
            
            
            
            (13.6
            )
            
            
            (13.1
            )State
            
            
            4.0
            
            
            
            9.3
            
            
            
            8.8
            
            
            
            40.5Total
            
            
            (1.8
            )
            
            
            12.8
            
            
            
            (4.8
            )
            
            
            27.4Noncurrent
      income taxesFederal
            
            
            7.7
            
            
            
            (1.7
            )
            
            
            6.8
            
            
            
            (0.4
            )State
            
            
            0.9
            
            
            
            (1.0
            )
            
            
            0.8
            
            
            
            (0.7
            )Foreign
            
            
            0.6
            
            
            
            -
            
            
            
            (1.9
            )
            
            
            -Total
            
            
            9.2
            
            
            
            (2.7
            )
            
            
            5.7
            
            
            
            (1.1
            )Investment
      tax creditDeferral
            
            
            12.2
            
            
            
            11.5
            
            
            
            28.4
            
            
            
            63.0Amortization
            
            
            (0.6
            )
            
            
            (0.6
            )
            
            
            (1.7
            )
            
            
            (1.3
            )Total
            
            
            11.6
            
            
            
            10.9
            
            
            
            26.7
            
            
            
            61.7Total
      income tax expense
            
            
            36.2
            
            
            
            46.0
            
            
            
            24.9
            
            
            
            99.6Less:  taxes
      on discontinued operationsCurrent
      tax expense
            
            
            -
            
            
            
            0.1
            
            
            
            -
            
            
            
            25.8Deferred
      tax expense (benefit)
            
            
            0.6
            
            
            
            -
            
            
            
            (1.4
            )
            
            
            4.5Noncurrent
      income tax expense
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            0.9Income
      tax expense on continuing operations
            
            $
            35.6
            
            
            $
            45.9
            
            
            $
            26.3
            
            
            $
            68.4


61


Three
      Months Ended
            
            
            Year
      to DateSeptember
      30
            
            
            September
      30KCP&L
            
            2009
            
            
            2008
            
            
            2009
            
            
            2008Current
      income taxes
            
            (millions)Federal
            
            $
            41.4
            
            
            $
            37.7
            
            
            $
            51.9
            
            
            $
            3.1State
            
            
            5.0
            
            
            
            1.6
            
            
            
            6.9
            
            
            
            1.9Total
            
            
            46.4
            
            
            
            39.3
            
            
            
            58.8
            
            
            
            5.0Deferred
      income taxesFederal
            
            
            (34.8
            )
            
            
            (15.8
            )
            
            
            (49.6
            )
            
            
            (37.4
            )State
            
            
            (1.0
            )
            
            
            2.6
            
            
            
            -
            
            
            
            33.8Total
            
            
            (35.8
            )
            
            
            (13.2
            )
            
            
            (49.6
            )
            
            
            (3.6
            )Noncurrent
      income taxesFederal
            
            
            3.6
            
            
            
            (2.9
            )
            
            
            2.9
            
            
            
            (2.3
            )State
            
            
            0.4
            
            
            
            (0.4
            )
            
            
            0.4
            
            
            
            (0.3
            )Total
            
            
            4.0
            
            
            
            (3.3
            )
            
            
            3.3
            
            
            
            (2.6
            )Investment
      tax creditDeferral
            
            
            12.2
            
            
            
            11.5
            
            
            
            28.4
            
            
            
            63.0Amortization
            
            
            (0.4
            )
            
            
            (0.4
            )
            
            
            (1.1
            )
            
            
            (1.1
            )Total
            
            
            11.8
            
            
            
            11.1
            
            
            
            27.3
            
            
            
            61.9Total
            
            $
            26.4
            
            
            $
            33.9
            
            
            $
            39.8
            
            
            $
            60.7


Income
Tax Expense and Effective Income Tax Rates
 Income
tax expense and the effective income tax rates reflected in continuing
operations in the financial statements and the reasons for their differences
from the statutory federal rates are detailed in the following
tables.


Great
      Plains Energy
            
            Income
      Tax Expense
            
            
            Income
      Tax RateThree
      Months Ended September 30
            
            2009
            
            
            2008
            
            
            2009
            
            2008(millions)Federal
      statutory income tax
            
            $
            39.9
            
            
            $
            52.7
            
            
            
            35.0
            %
            
            
            35.0
            %Differences
      between book and taxdepreciation
      not normalized
            
            
            (2.4
            )
            
            
            (1.2
            )
            
            
            (2.1
            )
            
            
            (0.8
            )Amortization
      of investment tax credits
            
            
            (0.6
            )
            
            
            (0.6
            )
            
            
            (0.5
            )
            
            
            (0.4
            )Federal
      income tax credits
            
            
            (1.9
            )
            
            
            (2.1
            )
            
            
            (1.7
            )
            
            
            (1.4
            )State
      income taxes
            
            
            4.0
            
            
            
            2.0
            
            
            
            3.5
            
            
            
            1.3Changes
      in uncertain tax positions, net
            
            
            0.8
            
            
            
            0.8
            
            
            
            0.6
            
            
            
            0.6GMO
      transaction costs
            
            
            -
            
            
            
            (1.6
            )
            
            
            -
            
            
            
            (1.0
            )Other
            
            
            (4.2
            )
            
            
            (4.1
            )
            
            
            (3.5
            )
            
            
            (2.8
            )Total
            
            $
            35.6
            
            
            $
            45.9
            
            
            
            31.3
            %
            
            
            30.5
            %


62


Great
      Plains Energy
            
            Income
      Tax Expense
            
            
            Income
      Tax RateYear
      to Date September 30
            
            2009
            
            
            2008
            
            
            2009
            
            2008(millions)Federal
      statutory income tax
            
            $
            57.1
            
            
            $
            63.3
            
            
            
            35.0
            %
            
            
            35.0
            %Differences
      between book and taxdepreciation
      not normalized
            
            
            (8.6
            )
            
            
            (2.5
            )
            
            
            (5.3
            )
            
            
            (1.4
            )Amortization
      of investment tax credits
            
            
            (1.7
            )
            
            
            (1.3
            )
            
            
            (1.0
            )
            
            
            (0.7
            )Federal
      income tax credits
            
            
            (6.5
            )
            
            
            (7.1
            )
            
            
            (4.0
            )
            
            
            (3.9
            )State
      income taxes
            
            
            5.4
            
            
            
            2.9
            
            
            
            3.3
            
            
            
            1.6Rate
      change on deferred taxes
            
            
            -
            
            
            
            19.3
            
            
            
            -
            
            
            
            10.7Changes
      in uncertain tax positions, net
            
            
            (72.5
            )
            
            
            0.2
            
            
            
            (44.5
            )
            
            
            0.1GMO
      transaction costs
            
            
            -
            
            
            
            (1.9
            )
            
            
            -
            
            
            
            (1.0
            )Valuation
      allowance
            
            
            56.5
            
            
            
            -
            
            
            
            34.6
            
            
            
            -Other
            
            
            (3.4
            )
            
            
            (4.5
            )
            
            
            (2.0
            )
            
            
            (2.6
            )Total
            
            $
            26.3
            
            
            $
            68.4
            
            
            
            16.1
            %
            
            
            37.8
            %


KCP&L
            
            Income
      Tax Expense
            
            
            Income
      Tax RateThree
      Months Ended September 30
            
            2009
            
            
            2008
            
            
            2009
            
            2008(millions)Federal
      statutory income tax
            
            $
            32.2
            
            
            $
            41.2
            
            
            
            35.0
            %
            
            
            35.0
            %Differences
      between book and taxdepreciation
      not normalized
            
            
            (3.0
            )
            
            
            (1.7
            )
            
            
            (3.2
            )
            
            
            (1.4
            )Amortization
      of investment tax credits
            
            
            (0.4
            )
            
            
            (0.4
            )
            
            
            (0.4
            )
            
            
            (0.3
            )Federal
      income tax credits
            
            
            (1.6
            )
            
            
            (1.9
            )
            
            
            (1.8
            )
            
            
            (1.6
            )State
      income taxes
            
            
            3.0
            
            
            
            2.6
            
            
            
            3.2
            
            
            
            2.2Changes
      in uncertain tax positions, net
            
            
            (0.1
            )
            
            
            0.1
            
            
            
            (0.1
            )
            
            
            0.1Parent
      company tax benefits (a)
            
            
            -
            
            
            
            (1.5
            )
            
            
            -
            
            
            
            (1.3
            )Other
            
            
            (3.7
            )
            
            
            (4.5
            )
            
            
            (4.0
            )
            
            
            (3.9
            )Total
            
            $
            26.4
            
            
            $
            33.9
            
            
            
            28.7
            %
            
            
            28.8
            %


KCP&L
            
            Income
      Tax Expense
            
            
            Income
      Tax RateYear
      to Date September 30
            
            2009
            
            
            2008
            
            
            2009
            
            2008(millions)Federal
      statutory income tax
            
            $
            52.0
            
            
            $
            59.3
            
            
            
            35.0
            %
            
            
            35.0
            %Differences
      between book and taxdepreciation
      not normalized
            
            
            (6.8
            )
            
            
            (3.0
            )
            
            
            (4.6
            )
            
            
            (1.8
            )Amortization
      of investment tax credits
            
            
            (1.1
            )
            
            
            (1.1
            )
            
            
            (0.7
            )
            
            
            (0.6
            )Federal
      income tax credits
            
            
            (5.8
            )
            
            
            (6.8
            )
            
            
            (3.9
            )
            
            
            (4.0
            )State
      income taxes
            
            
            4.8
            
            
            
            3.9
            
            
            
            3.2
            
            
            
            2.3Rate
      change on deferred taxes
            
            
            -
            
            
            
            20.3
            
            
            
            -
            
            
            
            12.0Changes
      in uncertain tax positions, net
            
            
            -
            
            
            
            (0.5
            )
            
            
            -
            
            
            
            (0.3
            )Parent
      company tax benefits (a)
            
            
            -
            
            
            
            (6.7
            )
            
            
            -
            
            
            
            (3.9
            )Other
            
            
            (3.3
            )
            
            
            (4.7
            )
            
            
            (2.2
            )
            
            
            (2.9
            )Total
            
            $
            39.8
            
            
            $
            60.7
            
            
            
            26.8
            %
            
            
            35.8
            %(a)The
      tax sharing agreement between Great Plains Energy and its subsidiaries was
      modified onJuly 14, 2008.  As part of the new agreement, parent company tax
      benefits are no longer allocatedto
      KCP&L or other subsidiaries.


63


Uncertain Tax
Positions
 At
September 30, 2009, and December 31, 2008, Great Plains Energy had $41.7 million
and $97.3 million, respectively, of liabilities related to unrecognized tax
benefits.  Of these amounts, $17.1 million at September 30, 2009, and
$80.2 million at December 31, 2008, are expected to impact the effective tax
rate if recognized.  The $55.6 million decrease in unrecognized tax
benefits is primarily due to a decrease of $74.5 million related to the Joint
Committee on Taxation approval of the IRS audit for GMO’s 2003-2004 tax years,
offset by an increase of $11.3 million of unrecognized tax benefits related to
prior year tax positions taken on GMO tax returns and a $7.5 million increase of
unrecognized tax benefits related to prior year tax positions taken on the Great
Plains Energy consolidated 2008 tax return.  The tax benefits
recognized related to the GMO 2003-2004 IRS audit were also offset by an
increase in valuation allowance for federal and state net operating losses of
$56.0 million and a reduction in deferred income tax assets of $2.5 million,
which resulted in an increase to net income of $16.0 million.
  At
September 30, 2009, and December 31, 2008, KCP&L had $20.9 million and $17.6
million, respectively, of liabilities related to unrecognized tax
benefits.  Of these amounts, $1.1 million at September 30, 2009, and
$1.2 million at December 31, 2008, are expected to impact the effective tax rate
if recognized.
  The
following table reflects activity for Great Plains Energy and KCP&L related
to the liability for unrecognized tax benefits.


Great
      Plains Energy
            
            
            KCP&LSeptember
      30
            December
      31
            September
      30
            December
      312009
            
            
            2008
            
            
            2009
            
            
            2008(millions)Beginning
      balance
            
            $
            97.3
            
            
            $
            21.9
            
            
            $
            17.6
            
            
            $
            19.6Additions
      for current year tax positions
            
            
            3.4
            
            
            
            5.3
            
            
            
            2.9
            
            
            
            3.8Additions
      for prior year tax positions
            
            
            7.5
            
            
            
            2.6
            
            
            
            3.2
            
            
            
            2.6Additions
      for GMO prior year tax positions
            
            
            11.9
            
            
            
            77.0
            
            
            
            -
            
            
            
            -Reductions
      for prior year tax positions
            
            
            (1.1
            )
            
            
            (0.8
            )
            
            
            (0.7
            )
            
            
            (0.7
            )Settlements
            
            
            (76.7
            )
            
            
            (8.5
            )
            
            
            (2.1
            )
            
            
            (7.5
            )Statute
      expirations
            
            
            -
            
            
            
            (0.2
            )
            
            
            -
            
            
            
            (0.2
            )Foreign
      currency translation adjustments
            
            
            (0.6
            )
            
            
            -
            
            
            
            -
            
            
            
            -Ending
      balance
            
            $
            41.7
            
            
            $
            97.3
            
            
            $
            20.9
            
            
            $
            17.6


Great
Plains Energy and KCP&L recognize interest accrued related to unrecognized
tax benefits in interest expense and penalties in non-operating
expenses.  At September 30, 2009, and December 31, 2008, accrued
interest related to unrecognized tax benefits for Great Plains Energy was $5.7
million and $2.6 million, respectively.  Amounts accrued for penalties
with respect to unrecognized tax benefits was $1.0 million at September 30,
2009.  For the three months ended and year to date September 30, 2009,
Great Plains Energy recognized an increase of $0.4 million and $1.1 million,
respectively, of interest expense related to unrecognized tax
benefits.  The remaining increase in accrued interest and the
penalties of $1.0 million were primarily associated with prior year GMO tax
return positions identified and recorded to goodwill.
  Year to
date September 30, 2009, KCP&L recognized a $0.1 million reduction of
interest expense related to unrecognized tax benefits.  KCP&L had
accrued interest related to unrecognized tax benefits of $1.6 million at
September 30, 2009, and $1.7 million at December 31, 2008.  Amounts
accrued for penalties with respect to unrecognized tax benefits for KCP&L
are insignificant.
  The IRS is currently auditing Great
Plains Energy and its subsidiaries for the 2006 tax year and the Company is
protesting an audit assessment by the Canada Revenue Authority (CRA) against a
former GMO subsidiary for the 2002 tax year.  It is reasonably
possible that a settlement may be reached for both audits within the next twelve
 64
 months.  The Company is
unable to estimate the amount of unrecognized tax benefits that may be
recognized in the next twelve months related to the IRS audit and other statute
expirations, but management estimates the Company will reduce unrecognized tax
benefits associated with the CRA audit by $0.3 million in the next twelve
months.
  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.  Additionally, in order to meet the
advanced clean coal standards and avoid forfeiture and/or the recapture of tax
credits in the future, KCP&L must meet or exceed certain environmental
performance standards for at least five years once the plant is placed in
service.
  For the
three months ended and year to date September 30, 2009, Great Plains Energy and
KCP&L recognized current federal tax benefits of $12.2 million and $28.4
million, respectively.  For the same periods in 2008, Great Plains
Energy and KCP&L recognized current federal tax benefits of $11.5 million
and $63.0 million, respectively.  However, tax laws require KCP&L
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 deferred advanced coal ITC expense to
offset the current federal tax benefit.  At September 30, 2009, Great
Plains Energy and KCP&L had $102.6 million of deferred advanced coal
ITC.  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.
  The
unaffiliated owners of Iatan No. 2, holding an aggregate 27% interest in the
unit, have asserted that they have proportionate rights to the credits, and have
commenced an arbitration action under the Iatan No. 2 ownership agreement
seeking to recover the proportionate value from KCP&L.  Discovery
is ongoing and the arbitration is currently scheduled for November
2009.
  19.
              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.  The one
reportable business segment is electric utility, consisting of KCP&L and
GMO’s regulated utility operations.  Other includes GMO activity other
than its regulated utility operations, 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 prior to
July 14, 2008.  GMO is only included for periods subsequent to July
14, 2008.  Segment performance is evaluated based on net income
attributable to Great Plains Energy.
 65
 The
following tables reflect summarized financial information concerning Great
Plains Energy’s reportable segment.


Three
      Months Ended
            
            Electric
            
            
            
            
            
            Great
      PlainsSeptember
      30, 2009
            
            Utility
            
            
            Other
            
            
            Energy(millions)Operating
      revenues
            
            $
            587.7
            
            
            $
            -
            
            
            $
            587.7Depreciation
      and amortization
            
            
            (77.9
            )
            
            
            -
            
            
            
            (77.9
            )Interest
      charges
            
            
            (38.6
            )
            
            
            (10.4
            )
            
            
            (49.0
            )Income
      tax benefit (expense)
            
            
            (42.2
            )
            
            
            6.6
            
            
            
            (35.6
            )Loss
      from equity investments
            
            
            -
            
            
            
            (0.2
            )
            
            
            (0.2
            )Discontinued
      operations
            
            
            -
            
            
            
            0.8
            
            
            
            0.8Net
      income (loss) attributable to Great Plains Energy
            
            
            83.9
            
            
            
            (4.8
            )
            
            
            79.1


Year
      to Date
            
            Electric
            
            
            
            
            
            Great
      PlainsSeptember
      30, 2009
            
            Utility
            
            
            Other
            
            
            Energy(millions)Operating
      revenues
            
            $
            1,487.4
            
            
            $
            -
            
            
            $
            1,487.4Depreciation
      and amortization
            
            
            (220.3
            )
            
            
            -
            
            
            
            (220.3
            )Interest
      charges
            
            
            (113.6
            )
            
            
            (19.6
            )
            
            
            (133.2
            )Income
      tax benefit (expense)
            
            
            (55.5
            )
            
            
            29.2
            
            
            
            (26.3
            )Loss
      from equity investments
            
            
            -
            
            
            
            (0.4
            )
            
            
            (0.4
            )Discontinued
      operations
            
            
            -
            
            
            
            (2.3
            )
            
            
            (2.3
            )Net
      income attributable to Great Plains Energy
            
            
            134.1
            
            
            
            0.4
            
            
            
            134.5


Three
      Months Ended
            
            Electric
            
            
            
            
            
            Great
      PlainsSeptember
      30, 2008
            
            Utility
            
            
            Other
            
            
            Energy(millions)Operating
      revenues
            
            $
            593.6
            
            
            $
            -
            
            
            $
            593.6Depreciation
      and amortization
            
            
            (65.4
            )
            
            
            -
            
            
            
            (65.4
            )Interest
      charges
            
            
            (27.0
            )
            
            
            3.4
            
            
            
            (23.6
            )Income
      tax benefit (expense)
            
            
            (46.0
            )
            
            
            0.1
            
            
            
            (45.9
            )Loss
      from equity investments
            
            
            -
            
            
            
            (0.3
            )
            
            
            (0.3
            )Discontinued
      operations
            
            
            -
            
            
            
            0.3
            
            
            
            0.3Net
      income attributable to Great Plains Energy
            
            
            102.5
            
            
            
            2.5
            
            
            
            105.0


Year
      to Date
            
            Electric
            
            
            
            
            
            Great
      PlainsSeptember
      30, 2008
            
            Utility
            
            
            Other
            
            
            Energy(millions)Operating
      revenues
            
            $
            1,226.2
            
            
            $
            -
            
            
            $
            1,226.2Depreciation
      and amortization
            
            
            (166.4
            )
            
            
            -
            
            
            
            (166.4
            )Interest
      charges
            
            
            (63.7
            )
            
            
            (11.9
            )
            
            
            (75.6
            )Income
      tax benefit (expense)
            
            
            (72.8
            )
            
            
            4.4
            
            
            
            (68.4
            )Loss
      from equity investments
            
            
            -
            
            
            
            (1.1
            )
            
            
            (1.1
            )Discontinued
      operations
            
            
            -
            
            
            
            35.0
            
            
            
            35.0Net
      income attributable to Great Plains Energy
            
            
            127.4
            
            
            
            20.1
            
            
            
            147.5


66


Electric
            
            
            
            
            
            
            
            
            Great
      PlainsUtility
            
            
            Other
            
            
            Eliminations
            
            
            EnergySeptember
      30, 2009
            
            (millions)Assets
            
            $
            8,643.0
            
            
            $
            99.1
            
            
            $
            (476.3
            )
            
            $
            8,265.8Capital
      expenditures (a)
            
            
            683.9
            
            
            
            -
            
            
            
            -
            
            
            
            683.9December
      31, 2008Assets
      (b)
            
            $
            8,161.9
            
            
            $
            141.7
            
            
            $
            (434.3
            )
            
            $
            7,869.3Capital
      expenditures (a)
            
            
            1,023.7
            
            
            
            1.2
            
            
            
            -
            
            
            
            1,024.9(a)Capital expenditures reflect year to date amounts for the periods
      presented.(b)Other includes assets of discontinued operations.


20.
              DISCONTINUED
      OPERATIONS
  On June
2, 2008, Great Plains Energy completed the sale of Strategic Energy to Direct
Energy Services, LLC (Direct Energy), a subsidiary of
Centrica.  Strategic Energy is reported as discontinued operations for
the periods presented.  During the second quarter of 2009, Great
Plains Energy recorded $5.1 million of gross receipts taxes for periods prior to
the sale for which Great Plains Energy indemnified Direct Energy.  In
the third quarter of 2009, Great Plains Energy reduced its previously recorded
reserve of $2.0 million related to indemnification obligations by $1.4
million.  The following table summarizes the income (loss) from
Strategic Energy’s discontinued operations.


Three
      Months Ended
            
            
            Year
      to DateSeptember
      30
            
            
            September
      302009
            
            
            2008
            
            
            2009
            
            
            2008(millions)Revenues
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            667.4Income
      from operations before income taxes (a)
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            182.4Gain
      (loss) on disposal before income taxes
            
            
            1.4
            
            
            
            0.4
            
            
            
            (3.7
            )
            
            
            (116.2
            )Total
      income (loss) on discontinued operationsbefore
      income taxes
            
            
            1.4
            
            
            
            0.4
            
            
            
            (3.7
            )
            
            
            66.2Income
      tax benefit (expense)
            
            
            (0.6
            )
            
            
            (0.1
            )
            
            
            1.4
            
            
            
            (31.2
            )Income
      (loss) from discontinued operations,net
      of income taxes
            
            $
            0.8
            
            
            $
            0.3
            
            
            $
            (2.3
            )
            
            $
            35.0(a)    
      Year
      to date September 30, 2008, amount include $189.1 million of unrealized
      net gains related to derivativescontracts.


21.
              SUBSEQUENT
      EVENTS
  Management
is unaware of any significant subsequent events, up to the time on October 29,
2009, when these financial statements were issued, which would require
disclosure.
 67
  22.
              NEW
      ACCOUNTING STANDARDS
  In June
2009, the FASB issued two amendments to existing GAAP, one of which amends
previous derecognition guidance and eliminates the concept of a qualifying
special-purpose entity (QSPEs).  The second amends previous
consolidation guidance applicable to variable interest entities (VIEs) requiring
companies to reconsider previous conclusions, including whether an entity is a
VIE, whether the Company is the VIE’s primary beneficiary and what type of
financial statement disclosures are required.  The provisions of these
amendments are effective for Great Plains Energy and KCP&L for financial
asset transfers occurring after January 1, 2010, and requires transferors to
evaluate all existing QSPEs and all VIEs to determine whether they must be
consolidated effective January 1, 2010, in accordance with the amended
consolidation guidance.   Management is currently evaluating the
impacts of these amendments and has not yet determined the impact on Great
Plains Energy’s and KCP&L’s consolidated financial statements.
  In June
2009, the FASB issued the FASB Accounting Standards Codification and the
Hierarchy of Generally Accepted Accounting Principles (Codification) as the
exclusive authoritative reference for U.S. GAAP to be applied by nongovernmental
entities.  The Codification changes the referencing of accounting
standards and is effective for interim and annual reporting periods ending after
September 15, 2009.  There was no impact on Great Plains Energy’s and
KCP&L’s consolidated financial statements upon adoption of the Codification
other than referencing accounting standards.
  ITEM
2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
  GREAT
PLAINS ENERGY INCORPORATED
  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 are
KCP&L, GMO, KLT Inc. and Services.  Great Plains Energy acquired
GMO on July 14, 2008.  Great Plains Energy’s sole reportable business
segment is electric utility for the periods presented.
  Electric
utility consists of KCP&L, a regulated utility, and GMO’s regulated utility
operations, which include its Missouri Public Service and St. Joseph Light &
Power divisions.  Electric utility has over 6,000 MWs of generating
capacity and engages in the generation, transmission, distribution and sale of
electricity to over 820,000 customers in the states of Missouri and
Kansas.  Electric utility’s retail electricity rates are below the
national average of investor-owned utilities.
  Earnings
Overview
 Great
Plains Energy’s earnings available for common shareholders for the three months
ended September 30, 2009, decreased to $78.7 million, or $0.58 per share
compared to $104.6 million, or $0.92 per share for the same period in 2008 due
to lower wholesale revenues, higher depreciation and interest expense and
increased operating expenses driven by a payment to terminate a wind project and
the inclusion of GMO for a full quarter, partially offset by increased retail
revenue and lower purchased power expense.
  Great
Plains Energy’s earnings available for common shareholders year to date
September 30, 2009, were $133.3 million, or $1.04 per share.  For the
same period in 2008, Great Plains Energy had earnings available for common
shareholders of $146.3 million, or $1.54 per share, including income from
discontinued operations of $35.0 million, or $0.37 per share.  The
acquisition of GMO increased earnings $26.1 million, which includes a $16.0
million tax benefit due to the settlement of GMO’s 2003-2004 tax audit in the
first quarter of 2009.  The impact of lower purchased power expense,
an increase in the equity component of AFUDC and decreased income taxes was
mostly offset by lower retail and wholesale revenues and higher depreciation and
interest expense at KCP&L.
 68
 Strategic
Focus
 Comprehensive
Energy Plan – Iatan No. 1 environmental and Iatan No. 2
 In the
first quarter of 2009, KCP&L completed construction of the Iatan No. 1
environmental project and certain Iatan common facilities.  A
scheduled outage at Iatan No. 1 began in mid-October 2008 for a unit overhaul
and to tie in the environmental equipment.  Iatan No. 1 was originally
scheduled to be back on-line in February 2009, but during start-up a high level
of turbine vibration was experienced.  The turbine was repaired and
Iatan No. 1 came back on-line in April 2009.  During the second
quarter of 2009, KCP&L completed a cost and schedule reforecast for the
Iatan No. 2 project.  KCP&L continues to make progress on the
construction of Iatan No. 2.  The anticipated in-service date for
Iatan No. 2 is late summer of 2010.  The following table summarizes
the current cost estimates for Iatan No. 2, exclusive of AFUDC and any costs for
Iatan common facilities that will be used by both Iatan No. 1 and Iatan No.
2.  The cost estimates for Iatan common facilities indentified for the
start-up of Iatan No. 1 are unchanged from the amounts disclosed in the 2008
Form 10-K.
 Current
      Estimate
                
                Previous
      EstimateRange
                
                Range
                
                Change(millions)Great
      Plains Energy's 73% share of Iatan No. 2
                
                $
      1,153
                -
                $
      1,201
                
                $
      1,125
                -
                $
      1,201
                
                $      28
                -
                $        -KCP&L's
      55% share of Iatan No. 2
                
                868
                -
                904
                
                847
                -
                904
                
                21
                -
                -
 Regulatory
Proceedings
 In
September 2008, KCP&L filed a request with the MPSC for an annual rate
increase of $101.5 million, with $15.1 million of that amount treated for
accounting purposes as additional amortization.  On June 10, 2009, the
MPSC issued its order approving in its entirety a stipulation and agreement
between KCP&L and other parties to KCP&L’s rate case before the
MPSC.  The stipulation and agreement provided for, among other things,
an increase in annual revenues of $95 million effective September 1, 2009, with
$10 million of that amount treated for accounting purposes as additional
amortization.  Parties may challenge the prudence of the cost of the
Iatan Unit No. 1 environmental project and the cost of facilities used in common
by Iatan Units No. 1 and No. 2 in KCP&L’s next rate case, but the Missouri
jurisdictional portion of any proposed rate base prudence disallowances will not
exceed $30 million in aggregate.
  In
September 2008, GMO filed a request with the MPSC for an annual electric rate
increase of $83.1 million ($66.0 million for GMO’s MPS jurisdiction, and $17.1
million for GMO’s L&P jurisdiction).  On June 10, 2009, the MPSC
issued its order approving in its entirety a stipulation and agreement between
GMO and other parties to GMO’s electric rate case before the
MPSC.  The stipulation and agreement provided for, among other things,
an increase in annual revenues of $63 million ($48 million for GMO’s MPS
jurisdiction, and $15 million for GMO’s L&P jurisdiction) effective
September 1, 2009.  Parties may challenge the prudence of the cost of the
Iatan Unit No. 1 environmental project and the cost of facilities used in common
by Iatan Units No. 1 and No. 2 in GMO’s next rate case, but the GMO Missouri
portion of any proposed rate base prudence disallowances will not exceed $15
million in aggregate.  The order also continues the GMO MPS and L&P
FACs.
 In
September 2008, GMO filed a request with the MPSC for an annual steam rate
increase of $1.3 million.  On June 10, 2009, the MPSC issued its order
approving in its entirety a stipulation and agreement between GMO and other
parties to GMO’s steam rate case before the MPSC.  The stipulation and
agreement provided for an increase in annual revenues of approximately $1
million, effective July 1, 2009.  The order allows for the QCA fuel
sharing mechanism to be established at 85% above the fuel cost included in
base rates.  The previous sharing mechanism was set at 80% above
the fuel cost included in base rates.
  In
September 2008, KCP&L filed a request with KCC for an annual rate increase
of $71.6 million, with $11.2 million of that amount treated for accounting
purposes as additional amortization.  On July 24,
 69
 2009, KCC
issued its order approving in its entirety a stipulation and agreement between
KCP&L and other parties to KCP&L’s rate case before KCC.  The
stipulation and agreement provided for, among other things, an increase in
annual revenues of $59 million effective August 1, 2009, with $18 million of
that amount treated for accounting purposes as additional
amortization.  Parties may challenge the prudence of the cost of the
Iatan Unit No. 1 environmental project and the costs of facilities used in
common by Iatan Units No. 1 and No. 2 in KCP&L’s next rate case, but the
Kansas jurisdictional portion of any proposed rate base prudence disallowances
will not exceed (i) $4.7 million for costs paid or approved for payment as of
April 30, 2009 and in-service as of July 4, 2009, and (ii) $2.8 million for the
first $56 million of costs not paid or approved for payment as of April 30,
2009.  There is no cap as to the amount of disallowances that may be
proposed for costs above this $56 million amount.
  RELATED PARTY
TRANSACTIONS
  See Note
15 to the consolidated financial statements for information regarding related
party transactions.
  ENVIRONMENTAL
MATTERS
  See Note
13 to the consolidated financial statements for information regarding
environmental matters.
  GREAT PLAINS ENERGY RESULTS
OF OPERATIONS
  The
following table summarizes Great Plains Energy’s comparative results of
operations.  GMO’s results of operations are only included subsequent
to the July 14, 2008, date of acquisition.
 Three
      Months Ended
              Year
      to DateSeptember
      30
              September
      302009
              2008
              2009
              2008(millions)Operating
      revenues
              $
              587.7
              
              $
              593.6
              
              $
              1,487.4
              
              $
              1,226.2Fuel
              
              (118.1
              )
              
              (109.7
              )
              
              (302.5
              )
              
              (222.7
              )Purchased
      power
              
              (46.1
              )
              
              (69.3
              )
              
              (140.9
              )
              
              (138.3
              )Other
      operating expenses
              
              (194.4
              )
              
              (179.6
              )
              
              (561.3
              )
              
              (458.5
              )Depreciation
      and amortization
              
              (77.9
              )
              
              (65.4
              )
              
              (220.3
              )
              
              (166.4
              )Operating
      income
              
              151.2
              
              
              169.6
              
              
              262.4
              
              
              240.3Non-operating
      income and expenses
              
              12.0
              
              
              4.9
              
              
              34.5
              
              
              17.3Interest
      charges
              
              (49.0
              )
              
              (23.6
              )
              
              (133.2
              )
              
              (75.6
              )Income
      tax expense
              
              (35.6
              )
              
              (45.9
              )
              
              (26.3
              )
              
              (68.4
              )Loss
      from equity investments
              
              (0.2
              )
              
              (0.3
              )
              
              (0.4
              )
              
              (1.1
              )Income
      from continuing operations
              
              78.4
              
              
              104.7
              
              
              137.0
              
              
              112.5Income
      (loss) from discontinued operations
              
              0.8
              
              
              0.3
              
              
              (2.3
              )
              
              35.0Net
      income
              
              79.2
              
              
              105.0
              
              
              134.7
              
              
              147.5Less:
      Net income attributable to noncontrolling interest
              
              (0.1
              )
              
              -
              
              
              (0.2
              )
              
              -Net
      income attributable to Great Plains Energy
              
              79.1
              
              
              105.0
              
              
              134.5
              
              
              147.5Preferred
      dividends
              
              (0.4
              )
              
              (0.4
              )
              
              (1.2
              )
              
              (1.2
              )Earnings
      available for common shareholders
              $
              78.7
              
              $
              104.6
              
              $
              133.3
              
              $
              146.3
 Three
Months Ended September 30, 2009 Compared to September 30, 2008
 Great
Plains Energy’s earnings available for common shareholders for the three months
ended September 30, 2009, decreased to $78.7 million, or $0.58 per share, from
earnings of $104.6 million, or $0.92 per share, for the same period in
2008.  A higher average number of common shares diluted earnings per
share by $0.11 for the three months ended September 30, 2009.  Great
Plains Energy’s significant share issuance was 11.5 million common shares in May
2009.
 70
 Electric
utility’s net income decreased $18.6 million for the three months ended
September 30, 2009, compared to the same period in 2008 primarily due to lower
wholesale revenues, higher depreciation and interest expense and increased
operating expenses driven by a payment to terminate a wind project and the
inclusion of GMO for a full quarter, partially offset by increased retail
revenue and lower purchased power expense.
  Great
Plains Energy’s corporate and other activities recognized a loss from continuing
operations of $6.0 million for the three months ended September 30, 2009,
compared to income of $1.8 million for the same period in 2008 primarily due to
additional interest expense from Equity Units issued in May 2009.
  Year
to Date September 30, 2009 Compared to September 30, 2008
 Great
Plains Energy’s earnings available for common shareholders year to date
September 30, 2009, decreased to $133.3 million, or $1.04 per share, from $146.3
million, or $1.54 per share, for the same period in 2008.  A higher
average number of common shares diluted earnings per share by $0.36 year to date
September 30, 2009.  Great Plains Energy’s significant share issuances
were 32.2 million common shares for the acquisition of GMO in July 2008 and 11.5
million common shares in May 2009.
  Electric
utility’s net income increased $6.7 million year to date September 30, 2009,
compared to the same period in 2008.  The acquisition of GMO increased
electric utility’s net income $6.6 million.  The impact of lower
purchased power expense, an increase in the equity component of AFUDC and
decreased income taxes was mostly offset by lower retail and wholesale revenues
and increased depreciation and interest expense at KCP&L.
  Great
Plains Energy’s corporate and other activities recognized income from continuing
operations of $1.5 million year to date September 30, 2009, compared to a loss
of $16.1 million for the same period in 2008 primarily attributable to a $16.0
million tax benefit due to the settlement of GMO’s 2003-2004 tax audit in the
first quarter of 2009, partially offset by $6.8 million after-tax of additional
interest expense for Equity Units issued in May 2009.  Additionally,
2008 reflects a $5.7 million after-tax loss for the change in fair value of
interest rate hedges.
  ELECTRIC UTILITY RESULTS OF
OPERATIONS
  The
following table summarizes the electric utility segment results of
operations.
 Three
      Months Ended
              Year
      to DateSeptember
      30
              September
      302009
              2008
              2009
              2008(millions)Operating
      revenues
              $
              587.7
              
              $
              593.6
              
              $
              1,487.4
              
              $
              1,226.2Fuel
              
              (118.1
              )
              
              (109.7
              )
              
              (302.5
              )
              
              (222.7
              )Purchased
      power
              
              (46.1
              )
              
              (70.3
              )
              
              (140.9
              )
              
              (139.3
              )Other
      operating expenses
              
              (191.1
              )
              
              (179.4
              )
              
              (550.5
              )
              
              (447.1
              )Depreciation
      and amortization
              
              (77.9
              )
              
              (65.4
              )
              
              (220.3
              )
              
              (166.4
              )Operating
      income
              
              154.5
              
              
              168.8
              
              
              273.2
              
              
              250.7Non-operating
      income and expenses
              
              10.2
              
              
              6.7
              
              
              30.0
              
              
              13.2Interest
      charges
              
              (38.6
              )
              
              (27.0
              )
              
              (113.6
              )
              
              (63.7
              )Income
      tax expense
              
              (42.2
              )
              
              (46.0
              )
              
              (55.5
              )
              
              (72.8
              )Net
      income
              $
              83.9
              
              $
              102.5
              
              $
              134.1
              
              $
              127.4
 71
 Electric
Utility Revenues and MWh Sales
 Three
      Months Ended
              
              
              Year
      to DateSeptember
      30
              %
              September
      30
              %2009
              2008
              Change
      (a)
              2009
              2008
              Change
      (a)Retail
      revenues
              (millions)
              
              
              (millions)Residential
              $
              243.3
              
              $
              243.3
              
              NM
              
              $
              594.2
              
              $
              448.7
              
              NMCommercial
              
              219.0
              
              
              215.5
              
              NM
              
              
              569.4
              
              
              459.0
              
              NMIndustrial
              
              48.9
              
              
              49.0
              
              NM
              
              
              128.5
              
              
              102.7
              
              NMOther
      retail revenues
              
              3.9
              
              
              3.9
              
              NM
              
              
              12.3
              
              
              9.0
              
              NMFuel
      recovery mechanism under (over) recovery
              
              12.3
              
              
              (6.5
              )
              NM
              
              
              26.8
              
              
              10.8
              
              NMTotal
      retail
              
              527.4
              
              
              505.2
              
              NM
              
              
              1,331.2
              
              
              1,030.2
              
              NMWholesale
      revenues
              
              49.4
              
              
              77.9
              
              NM
              
              
              123.1
              
              
              175.7
              
              NMOther
      revenues
              
              10.9
              
              
              10.5
              
              NM
              
              
              33.1
              
              
              20.3
              
              NMElectric
      utility revenues
              $
              587.7
              
              $
              593.6
              
              NM
              
              $
              1,487.4
              
              $
              1,226.2
              
              NM
 Three
      Months Ended
              
              
              Year
      to DateSeptember
      30
              %
              September
      30
              %2009
              2008
              Change
      (a)
              2009
              2008
              Change
      (a)Retail
      MWh sales
              (thousands)
              
              
              (thousands)Residential
              
              2,401
              
              
              2,459
              
              NM
              
              
              6,621
              
              
              5,020
              
              NMCommercial
              
              2,780
              
              
              2,818
              
              NM
              
              
              8,035
              
              
              6,563
              
              NMIndustrial
              
              824
              
              
              855
              
              NM
              
              
              2,348
              
              
              1,882
              
              NMOther
      retail MWh sales
              
              26
              
              
              27
              
              NM
              
              
              86
              
              
              62
              
              NMTotal
      retail
              
              6,031
              
              
              6,159
              
              NM
              
              
              17,090
              
              
              13,527
              
              NMWholesale
      MWh sales
              
              1,708
              
              
              1,756
              
              NM
              
              
              3,962
              
              
              3,839
              
              NMElectric
      utility MWh sales
              
              7,739
              
              
              7,915
              
              NM
              
              
              21,052
              
              
              17,366
              
              NM(a)
      Not meaningful due to the acquisition of GMO on July 14,
      2008.
 Retail
revenues increased $22.2 million for the three months ended September 30, 2009,
compared to the same period in 2008 due to GMO’s inclusion for a full quarter in
2009 and new retail rates effective August 1, 2009, and September 1, 2009, for
Kansas and Missouri, respectively.  These increases were partially
offset by unfavorable weather in 2009, with an 18% decrease in cooling degree
days, and a decline in weather-normalized customer usage driven by weakened
economic conditions.  Retail revenues increased $301.0 million year to
date September 30, 2009, compared to the same period in 2008.  The
acquisition of GMO increased retail revenue $306.6 million.  The
remaining decrease at KCP&L was due to unfavorable weather in 2009, with a
7% decrease in cooling degree days, and a decline in weather-normalized customer
usage driven by weakened economic conditions, partially offset by new retail
rates.
  Wholesale
revenues decreased $28.5 million for the three months ended September 30, 2009,
compared to the same period in 2008 due to a 42% decrease in the average market
price per MWh to $27.50, primarily due to lower natural gas
prices.  Wholesale revenues decreased $52.6 million year to date
September 30, 2009, compared to the same period in 2008 due to a 40% decrease in
the average market price per MWh to $29.06, primarily due to lower natural gas
prices.
 72
 Electric
Utility Fuel and Purchased Power
 Three
      Months Ended
              
              
              Year
      to DateSeptember
      30
              %
              September
      30
              %2009
              2008
              Change
              2009
              2008
              ChangeNet
      MWhs Generated by Fuel Type
              (thousands)
              
              
              (thousands)Coal
              
              5,398
              
              
              5,683
              
              NM(a)
              
              
              14,160
              
              
              12,718
              
              NM(a)Nuclear
              
              1,137
              
              
              1,215
              
              (6
              )
              
              3,489
              
              
              2,759
              
              26Natural
      gas and oil
              
              164
              
              
              229
              
              NM(a)
              
              
              282
              
              
              283
              
              NM(a)Wind
              
              74
              
              
              93
              
              (19
              )
              
              265
              
              
              308
              
              (14
              )Total
      Generation
              
              6,773
              
              
              7,220
              
              NM(a)
              
              
              18,196
              
              
              16,068
              
              NM(a)(a)
      Not meaningful due to the acquisition of GMO on July 14,
    2008.
 KCP&L’s
coal base load equivalent availability factor for the three months ended and
year to date September 30, 2009, decreased to 86% and 75%, respectively, from
92% and 81% for the same periods in 2008 due to plant outages.  The
year to date decrease was primarily due to the scheduled Iatan No. 1 outage for
a unit overhaul and to tie in new environmental equipment.  GMO’s coal
base load equivalent availability factor for the three months ended September
30, 2009, decreased to 91% from 94% for the same period in
2008.  GMO’s coal base load equivalent availability factor year to
date September 30, 2009, was 81%.
 
 KCP&L’s
nuclear unit, Wolf Creek, accounts for approximately 15% of electric utility’s
base load capacity.  The equivalent availability factor for Wolf Creek
decreased to 93% for the three months ended September 30, 2009, compared to 100%
for the same period in 2008.  As a result of Wolf Creek coming back
on-line following the outage in spring 2008, the equivalent availability factor
for Wolf Creek increased to 96% year to date September 30, 2009, compared to 77%
for the same period in 2008.  Wolf Creek’s current refueling outage
began October 10, 2009, and the unit is scheduled to come back on-line in
mid-November.
  Fuel
expense increased $79.8 million year to date September 30, 2009, compared to the
same period in 2008.  The acquisition of GMO increased fuel expense
$89.1 million.
  Purchased
power expense decreased $24.2 million for the three months ended September 30,
2009, compared to the same period in 2008 primarily due to a 66% decrease in the
average price per MWh as a result of lower natural gas prices.  The
favorable price impact was partially offset by a 25% increase in MWh purchases
due to the impact of unplanned outages in 2009 somewhat offset by reduced retail
demand.  Purchased power expense increased $1.6 million year to date
September 30, 2009, compared to the same period in 2008.  The
acquisition of GMO increased purchased power expense $43.3 million.  A
9% increase in MWh purchases driven by the extended outage at Iatan No. 1 in
2009, somewhat offset by reduced retail demand and the impact of the extended
Wolf Creek outage in 2008, also increased purchased power
expense.  These increases were mostly offset by a 56% decrease in the
average price per MWh as a result of lower natural gas prices.
  Electric
Utility Other Operating Expenses (including utility operating
expenses, maintenance, general taxes and other)
 Electric
utility’s other operating expenses increased $11.7 million for the three months
ended September 30, 2009, compared to the same period in 2008 primarily due to a
$7.5 million payment to terminate an agreement for the construction of a wind
project as well as GMO’s inclusion for a full quarter in 2009.  These
increases were partially offset by spending reductions and realized synergies
from the GMO acquisition.  See Note 7 to the consolidated financial
statements for a discussion of the Collaboration Agreement wind generation
commitments and termination of the agreement for the construction of a wind
project.
  Electric
utility’s other operating expenses increased $103.4 million year to date
September 30, 2009, compared to the same period in 2008.  The
acquisition of GMO increased other operating expenses $103.8
million.  The
 73
 remaining
decrease was primarily due to increased use of internal labor on capital
projects as a result of more efficient operations as well as spending reductions
and realized synergies from the GMO acquisition, mostly offset by a $7.5 million
payment to terminate an agreement for the construction of a wind
project.
  Electric
Utility Depreciation and Amortization
 Electric
utility’s depreciation and amortization costs increased $12.5 million for the
three months ended September 30, 2009, compared to the same period in 2008
primarily due to $3.8 million of additional amortization at KCP&L pursuant
to rate case orders, placing the Iatan No. 1 environmental project in service
during the second quarter of 2009 and normal depreciation activity for capital
additions.
  Electric
utility’s depreciation and amortization costs increased $53.9 million year to
date September 30, 2009, compared to the same period in 2008.  The
acquisition of GMO increased depreciation and amortization $40.2
million.  The remaining increase was due to $3.8 million of additional
amortization at KCP&L pursuant to rate case orders, the impact on KCP&L
of placing the Iatan No. 1 environmental project in service during the second
quarter of 2009 and normal depreciation activity for capital
additions.
  Electric
Utility Non-Operating Income and Expenses
 Electric
utility’s non-operating income and expenses increased $16.8 million year to date
September 30, 2009, compared to the same period in 2008.  The
acquisition of GMO increased non-operating income and expenses $7.4
million.  The remaining increase was due toan increase in the
equity component of AFUDC resulting from a higher average construction work in
progress balance due to KCP&L’s Comprehensive Energy Plan
projects.
 
 Electric
Utility Interest Charges
 Electric
utility’s interest charges increased $11.6 million for the three months ended
September 30, 2009, compared to the same period in 2008 primarily due to
interest on KCP&L’s $400.0 million of Mortgage Bonds Series 2009A issued in
March 2009 as well as GMO’s inclusion for a full quarter in 2009.
  Electric
utility’s interest charges increased $49.9 million year to date September 30,
2009, compared to the same period in 2008.  The acquisition of GMO
increased interest charges $40.5 million.  The remaining increase was
primarily due to interest on KCP&L’s $400.0 million of Mortgage Bonds Series
2009A issued in March 2009 and on $350.0 million of unsecured Senior Notes
issued in March 2008, partially offset by decreased commercial paper outstanding
and an increase in the debt component of AFUDC resulting from a higher average
construction work in progress balance due to KCP&L’s Comprehensive Energy
Plan projects.
  Electric
Utility Income Tax Expense
 Electric
utility’s income tax expense decreased $17.3 million year to date September 30,
2009, compared to the same period in 2008 due to an increase in KCP&L’s
deferred tax balances in 2008 of $20.3 million as a result of an increase in the
composite tax rate reflecting the sale of Strategic Energy.
 74
 GREAT PLAINS ENERGYSIGNIFICANT
BALANCE SHEET CHANGES (September 30, 2009 compared to December 31,
2008)
  ·
              Great
      Plains Energy’s funds on deposit decreased $5.4 million due to MPS
      Merchant closing positions with counterparties and reduced cash collateral
      requirements due to issuing a
guarantee.
  ·
              Great
      Plains Energy’s electric utility plant increased $825.6 million primarily
      due to the following projects placed in service, in addition to normal
      plant activity:
  ·
              $536.7
      million for the Iatan No. 1 environmental project and certain common
      costs; and
  ·  $100.4
million for environmental equipment at GMO’s Sibley No. 3.
  ·
              Great
      Plains Energy’s construction work in process decreased $250.7 million
      primarily due to $637.1 million of electric utility projects placed in
      service as described above, partially offset by a $295.7 million increase
      related to KCP&L’s Comprehensive Energy Plan projects, $36.7 million
      related to GMO’s 18% share of Iatan No. 2 and $43.6 million related to a
      KCP&L wind project, in addition to normal
  activity.
  ·
              Great
      Plains Energy’s notes payable and commercial paper decreased $48.0 million
      and $342.2 million, respectively, primarily due to repayment with proceeds
      from the following:
  ·
              KCP&L’s
      issuance of $400.0 million of 7.15% Mortgage Bonds Series
      2009A,
  ·
              Great
      Plains Energy’s issuance of $287.5 million of Equity Units and $161.0
      million of common stock, and
  ·
              Great
      Plains Energy’s sale of $50.0 million of common stock under a Sales Agency
      Financing Agreement with BNY Mellon Capital Markets,
  LLC.
  These
decreases were partially offset by a $79.1 million payment for the settlement of
FSS and additional borrowings.
  ·
              Great
      Plains Energy’s accounts payable decreased $186.9 million primarily due to
      the timing of cash payments, including KCP&L’s Comprehensive Energy
      Plan projects and GMO’s Sibley SCR project, and decreases related to lower
      natural gas and purchased power
prices.
  ·
              Great
      Plains Energy’s accrued taxes increased $56.5 million primarily due to an
      increase in property tax accruals due to the timing of tax
      payments.
  ·
              Great
      Plains Energy’s derivative instruments – current liabilities decreased
      $86.2 million primarily due to the settlement of FSS simultaneously with
      KCP&L’s issuance of $400.0 million of 7.15% Mortgage Bonds Series
      2009A in March 2009.
  ·
              Great
      Plains Energy’s deferred tax credits increased $26.7 million due to
      recognition of $28.4 million of advanced coal credits.  See Note
      18 to the consolidated financial statements for additional information on
      the advanced coal credits.
  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, proceeds from the issuance of its securities and borrowing under
its revolving credit facility.
  Great
Plains Energy’s capital requirements are principally comprised of debt
maturities and electric utility’s utility construction and other capital
expenditures.  These items as well as additional cash and capital
requirements are discussed below.
  Great
Plains Energy's liquid resources at September 30, 2009, consisted of $16.5
million of cash and cash equivalents on hand and $1,146.0 million of unused bank
lines of credit.  The unused lines consisted of $542.0 million from
KCP&L's credit facilities, $268.6 million from GMO’s revolving credit
facility and $335.4 million from Great Plains Energy's revolving credit
facility.
 75
 Great
Plains Energy intends to meet day-to-day cash flow requirements including
interest payments, retirement of maturing debt, construction requirements
(excluding KCP&L’s Comprehensive Energy Plan), dividends and pension benefit
plan funding requirements, discussed below, with a combination of internally
generated funds and proceeds from the issuance of equity securities,
equity-linked securities and/or short-term and long-term debt.  Great
Plains Energy’s intention to meet a portion of these requirements with
internally generated funds may, however, be impacted by the effect of inflation
on operating expenses, the level of MWh sales, regulatory actions, compliance
with environmental regulations and the availability of generating
units.  In addition, Great Plains Energy may issue equity,
equity-linked securities and/or debt to finance growth, maintain credit ratings
or take advantage of new opportunities.
  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.
  Cash
Flows from Operating Activities
 Great
Plains Energy generated positive cash flows from operating activities for the
periods presented.  The decrease in cash flows from operating
activities for Great Plains Energy year to date September 30, 2009, compared to
the same period in 2008 is primarily due to a decrease in accounts payable due
to the timing of cash payments and KCP&L’s payment of $79.1 million for the
settlement of FSS upon the issuance of $400.0 million of 7.15% Mortgage Bonds
Series 2009A in March 2009.  Partially offsetting these decreases was
KCP&L’s first quarter 2008 payment of $41.2 million for the settlement of
three T-Locks.  Additionally, year to date September 30, 2008, cash
flows from operating activities include Strategic Energy.  Great
Plains Energy sold Strategic Energy in June 2008.  Other changes in
working capital are detailed in Note 3 to the consolidated financial
statements.  The individual components of working capital vary with
normal business cycles and operations.
  Cash
Flows from Investing Activities
 Great
Plains Energy’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 utility capital expenditures decreased $18.7 million year to
date September 30, 2009, compared to the same period in 2008.  The
acquisition of GMO increased cash utility capital expenditures $65.9 million and
KCP&L’s cash utility capital expenditures decreased $84.6 million primarily
related to Comprehensive Energy Plan projects.
  In June
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
had $88.9 million of cash resulting in proceeds from the sale of Strategic
Energy, net of cash sold of $216.4 million.
 
 In July
2008, Great Plains Energy closed its acquisition of GMO.  Great Plains
Energy paid cash consideration of $0.7 billion.  At the time of the
acquisition, GMO had approximately $1.0 billion of cash from the sale of its
electric utility assets in Colorado and its gas utility assets in Colorado,
Kansas, Nebraska and Iowa to Black Hills.
 
 Cash
Flows from Financing Activities
 Great
Plains Energy’s cash flows from financing activities year to date September 30,
2009, reflect proceeds of $161.0 million from the issuance of 11.5 million
shares of common stock at $14 per share and proceeds of $287.5 million from the
issuance of 5.8 million Equity Units in May 2009.  See Note 11 to the
consolidated financial statements for more information on the Equity
Units.  Also reflected in the cash flows from financing activities
year to date September 30, 2009, is KCP&L’s issuance, at a discount, of
$400.0 million of 7.15% Mortgage Bonds Series 2009A that mature in
2019.  Additionally in the first quarter of 2009, Great Plains Energy
sold 3.8 million shares of common stock for $50.0 million in gross proceeds
under a Sales Agency Financing Agreement with BNY Mellon Capital Markets,
LLC.  Great Plains Energy has paid $22.7 million year to date
September 30,
 76
 2009 for
fees related to all issuances of debt and common stock.  The proceeds
from these issuances were used primarily to repay short-term
borrowings.
  Great
Plains Energy’s cash flows from financing activities year to date September 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 primarily to repay short-term
borrowings.  KCP&L incurred additional short-term borrowings year
to date September 30, 2008, to support expenditures related to Comprehensive
Energy Plan projects.  GMO repaid $169.0 million on a credit agreement
that was terminated in the third quarter of 2008.  Additionally, GMO
terminated various other credit agreements and paid $12.5 million of termination
fees.
  Financing
Authorization
 Under
stipulations with the MPSC and KCC, Great Plains Energy and KCP&L must
maintain common equity at not less than 30% and 35%, respectively, of total
capitalization.  KCP&L’s long-term financing activities are
subject to the authorization of the MPSC.  In 2008, the MPSC increased
KCP&L’s authorization to issue long-term debt and to enter into interest
rate hedging instruments in connection with such debt to $1.4 billion through
December 31, 2009.  KCP&L has utilized $1.25 billion of this
amount, leaving $146.5 million of authorization remaining.  In
addition, in February 2009, KCP&L received authorization to issue $196.5
million in mortgage bonds to insurers of KCP&L’s $196.5 million aggregate
principal amount of EIRR Bonds Series 2005 and Series 2007, if and as required
under the terms of the insurance agreements due to the issuance of other
mortgage bonds by KCP&L.  KCP&L utilized this authorization
with the issuance of $196.5 million in mortgage bonds to the bond insurers in
March 2009.  See Note 11 to the consolidated financial statements for
more information on these insurance agreements.
  In
December 2008, FERC authorized KCP&L to have outstanding at any time up to a
total of $1.1 billion in short-term debt instruments through December
2010.  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
September 30, 2009, there was $1.1 billion available under this
authorization.  KCP&L and GMO are also authorized to participate
in the Great Plains Energy money pool.  The money pool is an internal
financing arrangement in which funds deposited into the money pool may be lent
on a short-term basis to KCP&L and GMO.  At September 30, 2009,
KCP&L had outstanding payables under the money pool of $5.0 million and $9.8
million to Great Plains Energy and GMO, respectively.
  GMO has
$500.0 million of FERC short-term debt authorization through April 2010, subject
to the same four restrictions as the KCP&L FERC short-term authorization
discussed in the preceding paragraph.  At September 30, 2009, there
was $383.0 million available under this authorization.  GMO has $750.0
million of FERC long-term debt authorization through July 31, 2010, none of
which has been utilized.
  Debt
Agreements
 See Note
10 to the consolidated financial statements for discussion of revolving credit
facilities.
 77
 Pension
and Post-retirement Plans
 The
Company maintains qualified defined benefit plans for substantially all
employees of KCP&L, GMO and WCNOC and incurs significant costs in providing
the plans.  Year to date September 30, 2009, the Company contributed
$17.0 million to the plans and expects to contribute an additional $26.7 million
in the fourth quarter of 2009 to satisfy the funding requirements of ERISA and
MPSC and KCC rate orders.  The majority of the contributions will be
paid by KCP&L, which management believes has adequate access to capital
resources through cash flows from operations or through existing lines of credit
to support the funding requirements.
  Additionally,
the Company provides post-retirement health and life insurance benefits for
certain retired employees and expects to make benefit contributions of $15.6
million in the fourth quarter of 2009 under the provisions of these plans, with
the majority paid by KCP&L.
  Credit
Ratings
 In March
2009, Standard & Poor’s affirmed the “BBB” corporate credit rating and the
long-term debt credit ratings for Great Plains Energy, KCP&L and
GMO.  Standard & Poor’s also revised its outlook on all three
companies to “Negative” from “Stable”, and lowered KCP&L’s short-term debt
credit rating to “A-3” from “A-2”.
 
 In March
2009, Moody’s Investors Service lowered the senior unsecured ratings for Great
Plains Energy and GMO to “Baa3” from “Baa2”.  Moody’s Investors
Service also lowered KCP&L’s senior secured rating to “A3” from “A2” and
KCP&L’s senior unsecured rating to “Baa1” from “A3”.  Moody’s
Investors Service also affirmed KCP&L’s short term rating for commercial
paper at “Prime-2” and maintained its outlook for Great Plains Energy,
KCP&L, and GMO at “Negative.”
 
 A
securities rating is not a recommendation to buy, sell or hold securities and
may be subject to revision or withdrawal at any time by the assigning rating
agency.  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 further decrease in
these credit ratings would not cause any acceleration of Great Plains Energy’s,
KCP&L’s or GMO’s debt, it could increase interest charges under Great Plains
Energy’s 6.875% Senior Notes due 2017, GMO’s 11.875% Senior Notes due 2012,
GMO’s 7.95% Senior Notes due 2011 and Great Plains Energy’s, KCP&L’s and
GMO’s revolving credit agreements.  The March 2009 credit rating
actions did not have a significant impact to interest charges under such debt
for the three months ended and year to date September 30, 2009.  A
decrease in credit ratings could also have, among other things, an adverse
impact on Great Plains Energy’s, KCP&L’s and GMO’s access to capital, the
cost of funds, the amounts of collateral required under supply agreements and
Great Plains Energy’s ability to provide credit support for its
subsidiaries.
 78
 KANSAS
CITY POWER & LIGHT COMPANY
  MANAGEMENT’S NARRATIVE
ANALYSIS OF RESULTS OF OPERATIONS
  The
following table summarizes KCP&L's consolidated comparative results of
operations.
 Three
      Months Ended
              Year
      to DateSeptember
      30
              September
      302009
              2008
              2009
              2008(millions)Operating
      revenues
              $
              395.5
              
              $
              423.7
              
              $
              997.8
              
              $
              1,056.3Fuel
              
              (70.5
              )
              
              (79.6
              )
              
              (183.3
              )
              
              (192.6
              )Purchased
      power
              
              (19.8
              )
              
              (31.3
              )
              
              (58.6
              )
              
              (100.3
              )Other
      operating expenses
              
              (140.0
              )
              
              (133.5
              )
              
              (400.8
              )
              
              (401.2
              )Depreciation
      and amortization
              
              (59.3
              )
              
              (51.4
              )
              
              (166.1
              )
              
              (152.4
              )Operating
      income
              
              105.9
              
              
              127.9
              
              
              189.0
              
              
              209.8Non-operating
      income and expenses
              
              8.4
              
              
              6.5
              
              
              22.4
              
              
              13.0Interest
      charges
              
              (22.3
              )
              
              (16.6
              )
              
              (62.7
              )
              
              (53.3
              )Income
      tax expense
              
              (26.4
              )
              
              (33.9
              )
              
              (39.8
              )
              
              (60.7
              )Net
      income
              $
              65.6
              
              $
              83.9
              
              $
              108.9
              
              $
              108.8
 KCP&L
Revenues and MWh Sales
 Three
      Months Ended
              
              
              Year
      to DateSeptember
      30
              %
              September
      30
              %2009
              2008
              Change
              2009
              2008
              ChangeRetail
      revenues
              (millions)
              
              
              (millions)Residential
              $
              152.8
              
              $
              163.4
              
              
              (7
              )
              $
              365.5
              
              $
              368.8
              
              
              (1
              )Commercial
              
              156.9
              
              
              160.5
              
              
              (2
              )
              
              409.8
              
              
              404.0
              
              
              1Industrial
              
              31.0
              
              
              31.4
              
              
              (1
              )
              
              81.2
              
              
              85.1
              
              
              (5
              )Other
      retail revenues
              
              2.7
              
              
              2.7
              
              
              (1
              )
              
              7.9
              
              
              7.8
              
              
              -Kansas
      ECA (over) under recovery
              
              (0.3
              )
              
              (11.8
              )
              
              (98
              )
              
              1.2
              
              
              5.5
              
              
              (79
              )Total
      retail
              
              343.1
              
              
              346.2
              
              
              (1
              )
              
              865.6
              
              
              871.2
              
              
              (1
              )Wholesale
      revenues
              
              47.3
              
              
              72.4
              
              
              (35
              )
              
              117.8
              
              
              170.2
              
              
              (31
              )Other
      revenues
              
              5.1
              
              
              5.1
              
              
              (4
              )
              
              14.4
              
              
              14.9
              
              
              (4
              )KCP&L
      revenues
              $
              395.5
              
              $
              423.7
              
              
              (7
              )
              $
              997.8
              
              $
              1,056.3
              
              
              (6
              )
 Three
      Months Ended
              
              
              Year
      to DateSeptember
      30
              %
              September
      30
              %2009
              2008
              Change
              2009
              2008
              ChangeRetail
      MWh sales
              (thousands)
              
              
              (thousands)Residential
              
              1,486
              
              
              1,634
              
              
              (9
              )
              
              4,001
              
              
              4,195
              
              
              (5
              )Commercial
              
              1,971
              
              
              2,082
              
              
              (5
              )
              
              5,687
              
              
              5,827
              
              
              (2
              )Industrial
              
              508
              
              
              542
              
              
              (6
              )
              
              1,418
              
              
              1,569
              
              
              (10
              )Other
      retail MWh sales
              
              20
              
              
              22
              
              
              (2
              )
              
              64
              
              
              57
              
              
              12Total
      retail
              
              3,985
              
              
              4,280
              
              
              (7
              )
              
              11,170
              
              
              11,648
              
              
              (4
              )Wholesale
      MWh sales
              
              1,642
              
              
              1,630
              
              
              1
              
              
              3,816
              
              
              3,713
              
              
              3KCP&L
      electric MWh sales
              
              5,627
              
              
              5,910
              
              
              (5
              )
              
              14,986
              
              
              15,361
              
              
              (2
              )
 79
 Retail
revenues decreased $3.1 million for the three months ended September 30, 2009,
compared to the same period in 2008 due to unfavorable weather in 2009, with an
18% decrease in cooling degree days, and a decline in weather-normalized
customer usage driven by weakened economic conditions.  These
decreases were mostly offset by new retail rates effective August 1, 2009, and
September 1, 2009, for Kansas and Missouri, respectively.  Retail
revenues decreased $5.6 million year to date September 30, 2009, compared to the
same period in 2008 due to unfavorable weather in 2009, with a 7% decrease in
cooling degree days, and a decline in weather-normalized customer usage driven
by weakened economic conditions, partially offset by new retail
rates.
  Wholesale
revenues decreased $25.1 million for the three months ended September 30, 2009,
compared to the same period in 2008 due to a 42% decrease in the average market
price per MWh to $27.50, primarily due to lower natural gas
prices.  Wholesale revenues decreased $52.4 million year to date
September 30, 2009, compared to the same period in 2008 due to a 40% decrease in
the average market price per MWh to $29.06, primarily due to lower natural gas
prices.
 KCP&L
Fuel and Purchased Power
 Three
      Months Ended
              
              
              Year
      to DateSeptember
      30
              %
              September
      30
              %2009
              2008
              Change
              2009
              2008
              ChangeNet
      MWhs Generated by Fuel Type
              (thousands)
              
              
              (thousands)Coal
              
              3,970
              
              
              4,340
              
              
              (9
              )
              
              10,226
              
              
              11,375
              
              
              (10
              )Nuclear
              
              1,137
              
              
              1,215
              
              
              (6
              )
              
              3,489
              
              
              2,759
              
              
              26Natural
      gas and oil
              
              147
              
              
              172
              
              
              (15
              )
              
              215
              
              
              226
              
              
              (5
              )Wind
              
              74
              
              
              93
              
              
              (19
              )
              
              265
              
              
              308
              
              
              (14
              )Total
      Generation
              
              5,328
              
              
              5,820
              
              
              (8
              )
              
              14,195
              
              
              14,668
              
              
              (3
              )
 KCP&L’s
coal base load equivalent availability factor for the three months ended and
year to date September 30, 2009, decreased to 86% and 75%, respectively, from
92% and 81% for the same periods in 2008 due to plant outages.  The
year to date decrease is primarily due to the scheduled Iatan No. 1 outage for a
unit overhaul and to tie in new environmental equipment.
 
 KCP&L’s
nuclear unit, Wolf Creek, accounts for approximately 19% of its base load
capacity.  The equivalent availability factor for Wolf Creek decreased
to 93% for the three months ended September 30, 2009, compared to 100% for the
same period in 2008.  As a result of Wolf Creek coming back on-line
following the outage in spring 2008, the equivalent availability factor for Wolf
Creek increased to 96% year to date September 30, 2009, compared to 77% for the
same period in 2008.  Wolf Creek’s current refueling outage began
October 10, 2009, and the unit is scheduled to come back on-line in
mid-November.
  Purchased
power expense decreased $11.5 million for the three months ended September 30,
2009, compared to the same period in 2008 due to a 66% decrease in the average
price per MWh as a result of lower natural gas prices.  The favorable
price impact was partially offset by a 56% increase in MWh purchases due to the
impact of unplanned outages in 2009 somewhat offset by reduced retail
demand.  Purchased power expense decreased $41.7 million year to date
September 30, 2009, compared to the same period in 2008 primarily due to a 56%
decrease in the average price per MWh as a result of lower natural gas
prices.  The favorable price impact was partially offset by a 9%
increase in MWh purchases due to the extended outage at Iatan No. 1 in 2009
somewhat offset by reduced retail demand and the impact of the extended Wolf
Creek outage in 2008.
  KCP&L
Other Operating Expenses (including operating expenses,
maintenance, general taxes and other)
 KCP&L’s
other operating expenses increased $6.5 million and decreased $0.4 million for
the three months ended and year to date September 30, 2009, respectively,
compared to the same periods in 2008.  In September 2009, KCP&L
expensed $7.5 million after exercising its option to terminate an agreement for
the construction of a wind project.  Increased use of internal labor
on capital projects as a result of more efficient operations as well as
 80
 spending
reductions and realized synergies from the GMO acquisition reduced expenses in
the three months ended and year to date September 30, 2009.  See Note
7 to the consolidated financial statements for a discussion of the Collaboration
Agreement wind generation commitments and termination of the agreement for the
construction of a wind project.
  KCP&L
Depreciation and Amortization
 KCP&L’s
depreciation and amortization increased $7.9 million and $13.7 million for the
three months ended and year to date September 30, 2009, respectively, compared
to the same periods in 2008 primarily due to $3.8 million of additional
amortization pursuant to rate case orders, placing the Iatan No. 1 environmental
project in service during the second quarter of 2009 and normal depreciation
activity for capital additions.
 
 KCP&L
Non-operating Income and Expenses
 KCP&L’s
non-operating income and expenses increased $9.4 million year to date September
30, 2009, compared to the same period in 2008 primarily due to an increase in
the equity component of AFUDC resulting from a higher average construction work
in progress balance due to KCP&L’s Comprehensive Energy Plan
projects.
 
 KCP&L
Interest Charges
 KCP&L’s
interest charges increased $5.7 million for the three months ended September 30,
2009, compared to the same period in 2008 primarily due to interest on $400.0
million of Mortgage Bonds Series 2009A issued in March
2009.  KCP&L’s interest charges increased $9.4 million year to
date September 30, 2009, compared to the same period in 2008 primarily due to
interest on $400.0 million of Mortgage Bonds Series 2009A issued in March 2009
and on $350.0 million of unsecured Senior Notes issued in March
2008.  Both the three month ended and year to date period increases
were partially offset by decreased commercial paper outstanding and an increase
in the debt component of AFUDC resulting from a higher average construction work
in progress balance due to KCP&L’s Comprehensive Energy Plan
projects.
  KCP&L
Income Tax Expense
 KCP&L’s
income tax expense decreased $7.5 million for the three months ended September
30, 2009, compared to the same period in 2008 primarily due to decreased pre-tax
income.
  KCP&L’s
income tax expense decreased $20.9 million year to date September 30, 2009,
compared to the same period in 2008 primarily due to an increase in deferred tax
balances in 2008 of $20.3 million as a result of an increase in the composite
tax rate reflecting the sale of Strategic Energy.
  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 2008 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 2008
Form 10-K of each of Great Plains Energy and KCP&L, incorporated herein by
reference.
  MPS
Merchant is exposed to market risk, including changes in commodity
prices.  To manage the volatility relating to these exposures, MPS
Merchant enters into various derivative transactions in accordance with the risk
management policy.  The trading portfolios consist of natural gas
contracts that are settled by the delivery of the
 81
 commodity
or cash.  These contracts are in the form of
forwards.  Although MPS Merchant maintains a number of transactions
which are fully hedged via back-to-back deals, the business also retains two
contractual obligations that are not fully hedged.  MPS Merchant is
exposed to intra-month natural gas price volatility, with contracts that have a
fixed price set at the beginning of each month at which customers have an option
to purchase gas from MPS Merchant within the month.  Customers
typically exercise this option when natural gas prices rise, thereby creating an
exposure for MPS Merchant.  A hypothetical 10% increase in the daily
price of natural gas, versus the First of Month Index (FOM), could result in a
$2.6 million pre-tax decrease in MPS Merchant non-operating income for the
remainder of 2009.
  MPS
Merchant is also exposed to credit risk.  Credit risk is measured by
the loss that would be recorded if counterparties failed to perform pursuant to
the terms of the contractual obligations less the value of any collateral
held.  The following table provides information on MPS Merchant’s
credit exposure to customers at September 30, 2009.
 ExposureBefore
      Credit
              Credit
              NetRating
              Collateral
              Collateral
              ExposureExternal
      rating
              (millions)Investment
      grade
              $
              0.8
              
              $
              -
              
              $
              0.8Non-investment
      grade
              
              -
              
              
              -
              
              
              -No
      external rating
              
              23.0
              
              
              2.0
              
              
              21.0Total
              $
              23.8
              
              $
              2.0
              
              $
              21.8
 External
ratings are determined by using publicly available credit ratings of the
counterparty.  If a counterparty has provided a guarantee by a higher
rated entity, the determination has been based on the rating of its
guarantor.  Investment grade counterparties are those with a minimum
senior unsecured debt rating of BBB- from Standard & Poor’s or Baa3 from
Moody’s Investors Service.
  ITEM
4.  CONTROLS AND PROCEDURES
  GREAT
PLAINS ENERGY
 
 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 Great Plains Energy’s management,
including the chief executive officer and chief financial officer, and Great
Plains Energy’s disclosure committee.  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 were effective at a
reasonable assurance level.
  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 September 30, 2009,
that has materially affected, or is reasonably likely to materially affect, its
internal control over financial reporting.
 82
 KCP&L
  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 were effective at a reasonable assurance level.
  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 September 30, 2009, 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, 7, 13, 14 and 18 to
the consolidated financial statements.  Such descriptions are
incorporated herein by reference.
  ITEM
1A.  RISK FACTORS
  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 business of Great Plains Energy and KCP&L is
influenced by many factors that are difficult to predict, involve uncertainties
that may materially affect actual results and are often beyond their
control.  Factors that might cause or contribute to such differences
include, but are not limited to, those discussed in Item 1A. Risk Factors
included in the 2008 Form 10-K for each of Great Plains Energy and
KCP&L.  There have been no material changes with regard to those
risk factors.  Those risk factors, as well as the 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 or KCP&L.  Risk factors of KCP&L are also risk
factors of Great Plains Energy.
 83
 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 third quarter of 2009.
 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
              ProgramsJuly
      1 - 31
              
              8,962
              (1)
              $   17.36
              
              
              -
              
              
              N/AAugust
      1 - 31
              
              -
              
              -
              
              
              -
              
              
              N/ASeptember
      1 - 30
              
              -
              
              -
              
              
              -
              
              
              N/ATotal
              
              8,962
              
              $   17.36
              
              
              -
              
              
              N/A(1)Represents
      7,195 restricted common shares surrendered to the Company following the
      resignation of a certainofficer
      and 1,767 common shares surrendered to the Company by certain officers to
      pay taxes related to thevesting
      of restricted common shares.
  ITEM
3.  DEFAULTS UPON SENIOR SECURITIES
  None.
  ITEM
4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  None.
  ITEM
5.  OTHER INFORMATION
  None.
 84
 ITEM
6.  EXHIBITS
  Great
Plains Energy Documents
  Exhibit
                Number
              
              Description of Document12.1
              
              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.
 
 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.
  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 Document10.2.1
              *
              Amendment
      dated as of July 9, 2009 to Receivables Sale Agreement dated as of July 1,
      2005 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 (Exhibit 10.4 to Form 8-K
      filed July 13, 2009).10.2.2
              
              Amendment
      and Waiver dated as of September 25, 2009 to the Receivables Sale
      Agreement dated as of July 1, 2005 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.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.
 85
 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:  October
      29, 2009
              By:  /s/Michael J.
      Chesser(Michael
      J. Chesser)(Chief
      Executive Officer)Dated:  October
      29, 2009
              By:  /s/Lori A.
      Wright(Lori
      A. Wright)(Principal
      Accounting Officer)
 
 
  KANSAS
      CITY POWER & LIGHT COMPANYDated:  October
      29, 2009
              By:  /s/ Michael J.
      Chesser(Michael
      J. Chesser)(Chief
      Executive Officer)Dated:  October
      29, 2009
              By:  /s/Lori A.
      Wright(Lori
      A. Wright)(Principal
      Accounting Officer)
 
  86