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, 2007**
 
 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.
                    Employer****File
                    Number**
                
                **executive
                    offices and telephone number**
                
                **Identification
                    Number**001-32206
                
                **GREAT
                    PLAINS ENERGY INCORPORATED**
                
                43-1916803(A
                    Missouri Corporation)1201
                    Walnut StreetKansas
                    City, Missouri 64106(816)
                    556-2200www.greatplainsenergy.com000-51873
                
                **KANSAS
                    CITY POWER & LIGHT COMPANY**
                
                44-0308720(A
                    Missouri Corporation)1201
                    Walnut StreetKansas
                    City, Missouri 64106(816)
                    556-2200www.kcpl.com
 
 Indicate
                    by check mark whether the registrant (1) has filed all reports
                    required to
                    be filed by Section 13 or 15(d) of theSecurities
                    Exchange Act of 1934 during the preceding 12 months (or for such
                    shorter
                    period that the registrant was required tofile
                    such reports), and (2) has been subject to such filing requirements
                    for
                    the past 90 days.Great
                    Plains Energy Incorporated
                Yes
                
                No
                X
                
                Kansas
                    City Power & Light Company
                Yes
                X
                NoIndicate
                    by check mark whether the registrant is a large accelerated filer,
                    an
                    accelerated filer, or a non-accelerated filer. Seedefinition
                    of “accelerated filer and large accelerated filer” in Rule 12b-2 of the
                    Exchange Act.Great
                    Plains Energy Incorporated
                Large
                    accelerated filer
                X
                Accelerated
                    filer
                _
                Non-accelerated
                    filer
                _Kansas
                    City Power & Light Company
                Large
                    accelerated filer
                _
                Accelerated
                    filer
                _
                Non-accelerated
                    filer
                XIndicate
                    by check mark whether the registrant is a shell company (as defined
                    in
                    Rule 12b-2 of the Exchange Act).Great
                    Plains Energy Incorporated
                Yes
                _
                No
                X
                
                Kansas
                    City Power & Light Company
                Yes
                _
                No
                XOn October
                    31, 2007, Great Plains Energy Incorporated had 86,168,953 shares
                    of common
                    stock outstanding.On October
                    31, 2007, Kansas City Power & Light Company had one share of common
                    stock outstanding, which was held byGreat
                    Plains Energy Incorporated.
 This
              combined Quarterly Report on Form 10-Q is being filed by Great Plains
              Energy
              Incorporated (Great Plains Energy) and Kansas City Power & Light Company
              (KCP&L).  KCP&L is a wholly owned subsidiary of Great Plains Energy
              and represents a significant portion of its assets, liabilities, revenues,
              expenses and operations.  Thus, all information contained in this report
              relates to, and is filed by, Great Plains Energy.  Information that is
              specifically identified in this report as relating solely to Great
              Plains
              Energy, such as its financial statements and all information relating
              to Great
              Plains Energy’s other operations, businesses and subsidiaries, including
              Strategic Energy, L.L.C. (Strategic Energy), 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 Strategic Energy have any
              obligation in respect of KCP&L’s debt securities and holders of such
              securities should not consider Great Plains Energy’s or Strategic Energy’s
              financial resources or results of operations in making a decision with
              respect
              to KCP&L’s debt securities.  Similarly, KCP&L has no obligation in
              respect of debt securities of Great Plains Energy and of Strategic
              Energy.
 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 2006 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,
              statements regarding projected delivered volumes and margins, the outcome
              of
              regulatory proceedings, cost estimates of the comprehensive energy
              plan and
              other matters affecting future operations.  In connection with the safe
              harbor provisions of the Private Securities Litigation Reform Act of
              1995, the
              registrants are providing a number of important factors that could
              cause actual
              results to differ materially from the provided forward-looking information.
               These important factors include: future economic conditions in the
              regional, national and international markets, including but not limited
              to
              regional and national wholesale electricity markets; market perception
              of the
              energy industry, Great Plains Energy and KCP&L; 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 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 in availability and cost of capital and the effects on pension
              plan
              assets and costs; credit ratings; inflation rates; effectiveness of
              risk
              management policies and procedures and the ability of counterparties
              to satisfy
              their contractual commitments; impact of terrorist acts; increased
              competition
              including, but not limited to, retail choice in the electric utility
              industry
              and the entry of new competitors; ability to carry out marketing and
              sales
              plans; weather conditions including weather-related damage; cost, availability,
              quality and deliverability of fuel; ability to achieve generation planning
              goals
              and the occurrence and duration of unplanned generation outages; delays
              in the
              anticipated in-service dates and cost increases of additional generating
              capacity; nuclear operations; ability to enter new markets successfully
              and
              capitalize on growth opportunities in non-regulated businesses and
              the effects
              of competition; workforce risks including compensation and benefits
              costs;
              performance of projects undertaken by non-regulated businesses and
              the success
              of efforts to invest in and develop new opportunities; the ability
              to
              successfully complete merger, acquisition or divestiture plans (including
              the
              acquisition of Aquila, Inc., and Aquila’s sale of assets to Black Hills
              Corporation) 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 2006 Form 10-K for each of Great
              Plains
              Energy and KCP&L under Part I Item 1A, should be carefully read for further
 2
 understanding
              of potential risks to the companies.  Other sections of this report and
              other periodic reports filed by the companies 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.
 **GLOSSARY
            OF TERMS**
  The
          following is a glossary of frequently used abbreviations or acronyms that
          are
          found throughout this report.
 
 **Abbreviation
                    or Acronym**
                
                **Definition****Aquila**
                
                Aquila,
                  Inc.**ARO**
                
                Asset
                  Retirement Obligation**BART**
                
                Best
                    available retrofit technology**Black
                    Hills**
                
                Black
                  Hills Corporation**CAIR**
                
                Clean
                    Air Interstate Rule**CAMR**
                
                Clean
                    Air Mercury Rule**Clean
                  Air Act**
                
                Clean
                  Air Act Amendments of 1990**CO****2**
                
                Carbon
                    Dioxide**Collaboration
                  Agreement**
                Agreement
                  among KCP&L, the Sierra Club and the Concerned Citizens of Platte
                  County**Company**
                
                Great
                    Plains Energy Incorporated and its subsidiaries**Consolidated
                    KCP&L**
                
                KCP&L
                    and its wholly owned subsidiaries**Digital
                  Teleport**
                
                Digital
                  Teleport, Inc.**DOE**
                
                Department
                    of Energy**EBITDA**
                
                Earnings
                    before interest, income taxes, depreciation and
                    amortization**ECA**
                
                Energy
                  Cost Adjustment**EEI**
                
                Edison
                    Electric Institute**EIRR**
                
                Environmental
                    Improvement Revenue Refunding**EPA**
                
                Environmental
                    Protection Agency**EPS**
                
                Earnings
                    per common share**ERISA**
                
                Employee
                  Retirement Income Security Act of 1974**FASB**
                
                Financial
                    Accounting Standards Board**FELINE
                    PRIDES****SM**
                
                Flexible
                    Equity Linked Preferred Increased Dividend Equity Securities,a
                    service mark of Merrill Lynch & Co., Inc.**FERC**
                
                The
                    Federal Energy Regulatory Commission**FGIC**
                
                Financial
                  Guaranty Insurance Company**FIN**
                
                Financial
                    Accounting Standards Board Interpretation**FSS**
                
                Forward
                    Starting Swaps**GAAP**
                
                Generally
                    Accepted Accounting Principles**GPP**
                
                Great
                  Plains Power Incorporated**Great
                    Plains Energy**
                
                Great
                    Plains Energy Incorporated and its subsidiaries**Holdings**
                
                DTI
                  Holdings, Inc.**HSS**
                
                Home
                    Service Solutions Inc., a wholly owned subsidiary of KCP&L**IEC**
                
                Innovative
                    Energy Consultants Inc., a wholly owned subsidiary
                  of
                    Great Plains Energy**ISO**
                
                Independent
                    System Operator**KCC**
                
                The
                    State Corporation Commission of the State of Kansas**KCP&L**
                
                Kansas
                    City Power & Light Company, a wholly owned subsidiary
                  of
                    Great Plains Energy
 3
 **Abbreviation
                    or Acronym**
                
                **Definition****KDHE**
                
                Kansas
                  Department of Health and Environment**KLT
                  Gas**
                
                KLT
                  Gas Inc., a wholly owned susidiary of KLT Inc.**KLT
                  Inc.**
                
                KLT
                  Inc., a wholly owned subsidiary of Great Plains Energy**KLT
                  Investments**
                
                KLT
                  Investments Inc., a wholly owned subsidiary of KLY Inc,**KLT
                    Telecom**
                
                KLT
                  Telecom Inc., a wholly owned subsidiary of KLT Inc.**KW**
                
                Kilowatt**kWh**
                
                Kilowatt
                    hour**MAC**
                
                Material
                    Adverse Change**Market
                  Street**
                
                Market
                  Street Funding LLC**MD&A**
                
                Management’s
                    Discussion and Analysis of Financial Condition andResults
                    of Operations**MDNR**
                
                Missouri
                  Department of Natural Resources**MISO**
                
                Midwest
                    Independent Transmission System Operator, Inc.**MPSC**
                
                Public
                    Service Commission of the State of Missouri**MW**
                
                Megawatt
 
 **MWh**
              
              Megawatt
                  hour**NEIL**
              
              Nuclear
                  Electric Insurance Limited**NO****x**
              
              Nitrogen
                  Oxide**NPNS**
              
              Normal
                  Purchases and Normal Sales**NRC**
              
              Nuclear
                  Regulatory Commission**OCI**
              
              Other
                  Comprehensive Income**PJM**
              
              PJM
                  Interconnection, LLC**PRB**
              
              Powder
                  River Basin**PURPA**
              
              Public
                Utility Regulatory Policy Act**Receivables
                  Company**
              
              Kansas
                  City Power & Light Receivables Company, a wholly owned
                subsidiary
                  of KCP&L**RTO**
              
              Regional
                  Transmission Organization**SEC**
              
              Securities
                  and Exchange Commission**SECA**
              
              Seams
                  Elimination Charge Adjustment**Services**
              
              Great
                  Plains Energy Services Incorporated**SFAS**
              
              Statement
                  of Financial Accounting Standards**SIP**
              
              State
                  Implementation Plan**SO****2**
              
              Sulfur
                  Dioxide**SPP**
              
              Southwest
                  Power Pool, Inc.**STB**
              
              Surface
                  Transportation Board**Strategic
                  Energy**
              
              Strategic
                  Energy, L.L.C., a subsidiary of KLT Energy Services**Strategic
                Receivables**
              
              Strategic
                Receivables, LLC**T
                  - Lock**
              
              Treasury
                  Locks**Union
                  Pacific**
              
              Union
                  Pacific Railroad Company**WCNOC**
              
              Wolf
                  Creek Nuclear Operating Corporation**Wolf
                  Creek**
              
              Wolf
                  Creek Generating Station
 4
 **PART
          I - FINANCIAL INFORMATION**
 **ITEM
              1. CONSOLIDATED FINANCIAL STATEMENTS**


**GREAT
                PLAINS ENERGY****Consolidated
                Balance Sheets**(Unaudited)**September
                30**
            
            December
                31**2007**
            
            2006**ASSETS**
            
            (thousands)**Current
                Assets**Cash
                and cash equivalents
            
            **$**
            **34,959**
            
            
            $
            61,823Restricted
                cash
            
            ****
            **147,041**
            
            
            
            -Receivables,
                net
            
            ****
            **475,716**
            
            
            
            339,399Fuel
                inventories, at average cost
            
            ****
            **35,397**
            
            
            
            27,811Materials
                and supplies, at average cost
            
            ****
            **63,347**
            
            
            
            59,829Deferred
                refueling outage costs
            
            ****
            **8,147**
            
            
            
            13,921Refundable
                income taxes
            
            ****
            **-**
            
            
            
            9,832Deferred
                income taxes
            
            ****
            **33,103**
            
            
            
            39,566Derivative
                instruments
            
            ****
            **4,727**
            
            
            
            6,884Other
            
            ****
            **10,468**
            
            
            
            11,717Total
            
            ****
            **812,905**
            
            
            
            570,782**Nonutility
                Property and Investments**Affordable
                housing limited partnerships
            
            ****
            **19,392**
            
            
            
            23,078Nuclear
                decommissioning trust fund
            
            ****
            **110,668**
            
            
            
            104,066Other
            
            ****
            **15,179**
            
            
            
            15,663Total
            
            ****
            **145,239**
            
            
            
            142,807**Utility
                Plant, at Original Cost**Electric
            
            ****
            **5,419,610**
            
            
            
            5,268,485Less-accumulated
                depreciation
            
            ****
            **2,554,815**
            
            
            
            2,456,199Net
                utility plant in service
            
            ****
            **2,864,795**
            
            
            
            2,812,286Construction
                work in progress
            
            ****
            **388,010**
            
            
            
            214,493Nuclear
                fuel, net of amortization of $115,991 and $103,381
            
            ****
            **64,380**
            
            
            
            39,422Total
            
            ****
            **3,317,185**
            
            
            
            3,066,201**Deferred
                Charges and Other Assets**Regulatory
                assets
            
            ****
            **421,718**
            
            
            
            434,392Goodwill
            
            ****
            **88,139**
            
            
            
            88,139Derivative
                instruments
            
            ****
            **4,378**
            
            
            
            3,544Other
            
            ****
            **45,857**
            
            
            
            29,795Total
            
            ****
            **560,092**
            
            
            
            555,870Total
            
            **$**
            **4,835,421**
            
            
            $
            4,335,660The
                accompanying Notes to Consolidated Financial Statements are an integral
                part of these statements.




5


**GREAT
                PLAINS ENERGY****Consolidated
                Balance Sheets**(Unaudited)**September
                30**
            
            December
                31**2007**
            
            2006**LIABILITIES
                AND CAPITALIZATION**
            
            (thousands)**Current
                Liabilities**Notes
                payable
            
            **$**
            **86,000**
            
            
            $
            -Commercial
                paper
            
            ****
            **208,647**
            
            
            
            156,400Current
                maturities of long-term debt
            
            ****
            **534**
            
            
            
            389,634EIRR
                bonds classified as current
            
            ****
            **146,500**
            
            
            
            144,742Accounts
                payable
            
            ****
            **369,531**
            
            
            
            322,724Accrued
                taxes
            
            ****
            **58,868**
            
            
            
            24,106Accrued
                interest
            
            ****
            **24,447**
            
            
            
            14,082Accrued
                compensation and benefits
            
            ****
            **23,024**
            
            
            
            33,266Pension
                and post-retirement liability
            
            ****
            **1,037**
            
            
            
            1,037Derivative
                instruments
            
            ****
            **81,575**
            
            
            
            91,482Other
            
            ****
            **20,514**
            
            
            
            25,520Total
            
            ****
            **1,020,677**
            
            
            
            1,202,993**Deferred
                Credits and Other Liabilities**Deferred
                income taxes
            
            ****
            **625,332**
            
            
            
            622,847Deferred
                investment tax credits
            
            ****
            **27,395**
            
            
            
            28,458Asset
                retirement obligations
            
            ****
            **94,147**
            
            
            
            91,824Pension
                and post-retirement liability
            
            ****
            **188,054**
            
            
            
            176,189Regulatory
                liabilities
            
            ****
            **119,854**
            
            
            
            114,674Derivative
                instruments
            
            ****
            **14,812**
            
            
            
            61,146Other
            
            ****
            **72,809**
            
            
            
            49,103Total
            
            ****
            **1,142,403**
            
            
            
            1,144,241**Capitalization**Common
                shareholders' equityCommon
                stock-150,000,000 shares authorized without par value86,243,732
                and 80,405,035 shares issued, stated value
            
            ****
            **1,061,026**
            
            
            
            896,817Retained
                earnings
            
            ****
            **494,876**
            
            
            
            493,399Treasury
                stock-77,465 and 53,499 shares, at cost
            
            ****
            **(2,375**
            **)**
            
            
            (1,614
            )Accumulated
                other comprehensive loss
            
            ****
            **(23,351**
            **)**
            
            
            (46,686
            )Total
            
            ****
            **1,530,176**
            
            
            
            1,341,916Cumulative
                preferred stock $100 par value3.80%
                - 100,000 shares issued
            
            ****
            **10,000**
            
            
            
            10,0004.50%
                - 100,000 shares issued
            
            ****
            **10,000**
            
            
            
            10,0004.20%
                - 70,000 shares issued
            
            ****
            **7,000**
            
            
            
            7,0004.35%
                - 120,000 shares issued
            
            ****
            **12,000**
            
            
            
            12,000Total
            
            ****
            **39,000**
            
            
            
            39,000Long-term
                debt (Note 8)
            
            ****
            **1,103,165**
            
            
            
            607,510Total
            
            ****
            **2,672,341**
            
            
            
            1,988,426**Commitments
                and Contingencies (Note 14)**
            
            ****Total
            
            **$**
            **4,835,421**
            
            
            $
            4,335,660The
              accompanying Notes to Consolidated Financial Statements are an integral
              part of these statements.




6


**GREAT
                  PLAINS ENERGY****Consolidated
                  Statements of Income**(Unaudited)**Three
                  Months Ended**
              
              
              **Year
                  to Date****September
                  30**
              
              
              **September
                  30**As
                  Adjusted*
              
              
              
              As
                  Adjusted***2007**
              
              
              2006
              
              
              **2007**
              
              
              2006**Operating
                  Revenues**
              
              (thousands,
                  except per share amounts)Electric
                  revenues - KCP&L
              
              **$**
              **416,049**
              
              
              $
              359,270
              
              
              **$**
              **990,844**
              
              
              $
              890,551Electric
                  revenues - Strategic Energy
              
              ****
              **575,679**
              
              
              
              458,538
              
              
              ****
              **1,468,666**
              
              
              
              1,127,056Other
                  revenues
              
              ****
              **223**
              
              
              
              730
              
              
              ****
              **1,345**
              
              
              
              2,220Total
              
              ****
              **991,951**
              
              
              
              818,538
              
              
              ****
              **2,460,855**
              
              
              
              2,019,827**Operating
                  Expenses**Fuel
              
              ****
              **75,624**
              
              
              
              76,254
              
              
              ****
              **186,240**
              
              
              
              178,051Purchased
                  power - KCP&L
              
              ****
              **41,254**
              
              
              
              5,157
              
              
              ****
              **80,360**
              
              
              
              18,844Purchased
                  power - Strategic Energy
              
              ****
              **565,467**
              
              
              
              462,299
              
              
              ****
              **1,386,816**
              
              
              
              1,117,404Skill
                  set realignment costs
              
              ****
              **-**
              
              
              
              1,389
              
              
              ****
              **-**
              
              
              
              15,905Operating
                  expenses - KCP&L
              
              ****
              **75,710**
              
              
              
              69,316
              
              
              ****
              **223,371**
              
              
              
              196,556Selling,
                  general and administrative - non-regulated
              
              ****
              **21,464**
              
              
              
              18,819
              
              
              ****
              **64,142**
              
              
              
              47,338Maintenance
              
              ****
              **19,632**
              
              
              
              19,395
              
              
              ****
              **72,611**
              
              
              
              65,902Depreciation
                  and amortization
              
              ****
              **46,247**
              
              
              
              40,422
              
              
              ****
              **137,108**
              
              
              
              118,618General
                  taxes
              
              ****
              **33,554**
              
              
              
              31,826
              
              
              ****
              **88,335**
              
              
              
              87,234(Gain)
                  loss on property
              
              ****
              **-**
              
              
              
              28
              
              
              ****
              **11**
              
              
              
              (569
              )Other
              
              ****
              **-**
              
              
              
              12
              
              
              ****
              **156**
              
              
              
              22Total
              
              ****
              **878,952**
              
              
              
              724,917
              
              
              ****
              **2,239,150**
              
              
              
              1,845,305Operating
                  income
              
              ****
              **112,999**
              
              
              
              93,621
              
              
              ****
              **221,705**
              
              
              
              174,522Non-operating
                  income
              
              ****
              **2,310**
              
              
              
              9,852
              
              
              ****
              **9,183**
              
              
              
              16,741Non-operating
                  expenses
              
              ****
              **(1,101**
              **)**
              
              
              (2,141
              )
              
              ****
              **(4,750**
              **)**
              
              
              (5,593
              )Interest
                  charges
              
              ****
              **(28,217**
              **)**
              
              
              (17,974
              )
              
              ****
              **(67,830**
              **)**
              
              
              (53,113
              )Income
                  before income taxesand
                  loss from equity investments
              
              ****
              **85,991**
              
              
              
              83,358
              
              
              ****
              **158,308**
              
              
              
              132,557Income
                  taxes
              
              ****
              **(23,392**
              **)**
              
              
              (26,952
              )
              
              ****
              **(46,020**
              **)**
              
              
              (38,243
              )Loss
                  from equity investments, net of income taxes
              
              ****
              **(410**
              **)**
              
              
              (468
              )
              
              ****
              **(1,139**
              **)**
              
              
              (1,047
              )Net
                  income
              
              ****
              **62,189**
              
              
              
              55,938
              
              
              ****
              **111,149**
              
              
              
              93,267Preferred
                  stock dividend requirements
              
              ****
              **411**
              
              
              
              411
              
              
              ****
              **1,234**
              
              
              
              1,234Earnings
                  available for common shareholders
              
              **$**
              **61,778**
              
              
              $
              55,527
              
              
              **$**
              **109,915**
              
              
              $
              92,033Average
                  number of common shares outstanding
              
              ****
              **85,649**
              
              
              
              80,081
              
              
              ****
              **84,683**
              
              
              
              77,266Average
                  number of diluted common shares outstanding
              
              ****
              **85,741**
              
              
              
              80,342
              
              
              ****
              **85,006**
              
              
              
              77,364Basic
                  earnings per common share
              
              **$**
              **0.72**
              
              
              $
              0.69
              
              
              **$**
              **1.30**
              
              
              $
              1.19Diluted
                  earnings per common share
              
              **$**
              **0.72**
              
              
              $
              0.69
              
              
              **$**
              **1.29**
              
              
              $
              1.19Cash
                  dividends per common share
              
              **$**
              **0.415**
              
              
              $
              0.415
              
              
              **$**
              **1.245**
              
              
              $
              1.245The
                  accompanying Notes to Consolidated Financial Statements are an
                  integral
                  part of these statements.*See
                  Note 5 for additional information regarding deferred refueling
                  outage
                  costs.


7


**GREAT
                PLAINS ENERGY****Consolidated
                Statements of Cash Flows**(Unaudited)As
                Adjusted***Year
                to Date September 30**
            
            **2007**
            
            2006**Cash
                Flows from Operating Activities**
            
            (thousands)Net
                income
            
            **$**
            **111,149**
            
            
            $
            93,267Adjustments
                to reconcile income to net cash from operating activities:Depreciation
                and amortization
            
            ****
            **137,108**
            
            
            
            118,618Amortization
                of:Nuclear
                fuel
            
            ****
            **12,610**
            
            
            
            11,789Other
            
            ****
            **6,032**
            
            
            
            6,965Deferred
                income taxes, net
            
            ****
            **21,003**
            
            
            
            (31,371
            )Investment
                tax credit amortization
            
            ****
            **(1,063**
            **)**
            
            
            (2,285
            )Loss
                from equity investments, net of income taxes
            
            ****
            **1,139**
            
            
            
            1,047Gain
                (loss) on property
            
            ****
            **11**
            
            
            
            (569
            )Fair
                value impacts from energy contracts
            
            ****
            **(20,540**
            **)**
            
            
            64,507Other
                operating activities (Note 3)
            
            ****
            **(48,799**
            **)**
            
            
            (22,975
            )Net
                cash from operating activities
            
            ****
            **218,650**
            
            
            
            238,993**Cash
                Flows from Investing Activities**Utility
                capital expenditures
            
            ****
            **(359,657**
            **)**
            
            
            (371,056
            )Allowance
                for borrowed funds used during construction
            
            ****
            **(10,575**
            **)**
            
            
            (4,060
            )Purchases
                of investments and nonutility property
            
            ****
            **(3,725**
            **)**
            
            
            (4,218
            )Proceeds
                from sale of assets and investments
            
            ****
            **73**
            
            
            
            319Change
                in restricted cash
            
            ****
            **(146,500**
            **)**
            
            
            -Purchases
                of nuclear decommissioning trust investments
            
            ****
            **(47,149**
            **)**
            
            
            (37,333
            )Proceeds
                from nuclear decommissioning trust investments
            
            ****
            **44,387**
            
            
            
            34,596Hawthorn
                No. 5 partial litigation recoveries
            
            ****
            **-**
            
            
            
            15,829Other
                investing activities
            
            ****
            **(11,558**
            **)**
            
            
            (852
            )Net
                cash from investing activities
            
            ****
            **(534,704**
            **)**
            
            
            (366,775
            )**Cash
                Flows from Financing Activities**Issuance
                of common stock
            
            ****
            **8,127**
            
            
            
            151,624Issuance
                of long-term debt
            
            ****
            **495,564**
            
            
            
            -Issuance
                fees
            
            ****
            **(4,497**
            **)**
            
            
            (6,144
            )Repayment
                of long-term debt
            
            ****
            **(225,500**
            **)**
            
            
            (872
            )Net
                change in short-term borrowings
            
            ****
            **138,247**
            
            
            
            42,700Dividends
                paid
            
            ****
            **(108,332**
            **)**
            
            
            (98,913
            )Equity
                forward settlement
            
            ****
            **(12,322**
            **)**
            
            
            -Other
                financing activities
            
            ****
            **(2,097**
            **)**
            
            
            (4,422
            )Net
                cash from financing activities
            
            ****
            **289,190**
            
            
            
            83,973**Net
                Change in Cash and Cash Equivalents**
            
            ****
            **(26,864**
            **)**
            
            
            (43,809
            )**Cash
                and Cash Equivalents at Beginning of Year**
            
            ****
            **61,823**
            
            
            
            103,068**Cash
                and Cash Equivalents at End of Period**
            
            **$**
            **34,959**
            
            
            $
            59,259The
                accompanying Notes to Consolidated Financial Statements are an integral
                part of these statements.*
                See Note 5 for additional information regarding deferred refueling
                outage
                costs.


8


**GREAT
                  PLAINS ENERGY****Consolidated
                  Statements of Common Shareholders' Equity**(Unaudited)As
                  Adjusted***Year
                  to Date September 30**
              
              **2007**
              
              
              2006**Shares**
              
              
              **Amount**
              
              
              Shares
              
              
              Amount**Common
                  Stock**
              
              (thousands,
                  except share amounts)Beginning
                  balance
              
              ****
              **80,405,035**
              
              
              **$**
              **896,817**
              
              
              
              74,783,824
              
              
              $
              744,457Issuance
                  of common stock
              
              ****
              **5,490,170**
              
              
              ****
              **171,721**
              
              
              
              5,510,769
              
              
              
              151,624Issuance
                  of restricted common stock
              
              ****
              **348,527**
              
              
              ****
              **11,127**
              
              
              
              46,826
              
              
              
              1,320Common
                  stock issuance fees
              
              
              
              
              
              ****
              **-**
              
              
              
              
              
              
              
              (5,194
              )Equity
                  compensation expense
              
              
              
              
              
              ****
              **1,319**
              
              
              
              
              
              
              
              1,929Equity
                  forward settlement
              
              
              
              
              
              ****
              **(12,322**
              **)**
              
              
              
              
              
              
              -Unearned
                  CompensationIssuance
                  of restricted common stock
              
              
              
              
              
              ****
              **(11,127**
              **)**
              
              
              
              
              
              
              (1,355
              )Forfeiture
                  of restricted common stock
              
              
              
              
              
              ****
              **183**
              
              
              
              
              
              
              
              56Compensation
                  expense recognized
              
              
              
              
              
              ****
              **3,302**
              
              
              
              
              
              
              
              982Other
              
              ****
              
              
              
              ****
              **6**
              
              
              
              
              
              
              
              31Ending
                  balance
              
              ****
              **86,243,732**
              
              
              ****
              **1,061,026**
              
              
              
              80,341,419
              
              
              
              893,850**Retained
                  Earnings**Beginning
                  balance
              
              
              
              
              
              ****
              **493,399**
              
              
              
              
              
              
              
              498,632Cumulative
                  effect of a change in accounting principle (Note 12)
              
              ****
              **(931**
              **)**
              
              
              
              
              
              
              -Net
                  income
              
              
              
              
              
              ****
              **111,149**
              
              
              
              
              
              
              
              93,267Dividends:Common
                  stock
              
              
              
              
              
              ****
              **(107,097**
              **)**
              
              
              
              
              
              
              (97,631
              )Preferred
                  stock - at required rates
              
              
              
              
              
              ****
              **(1,234**
              **)**
              
              
              
              
              
              
              (1,234
              )Performance
                  shares
              
              
              
              
              
              ****
              **(410**
              **)**
              
              
              
              
              
              
              (207
              )Ending
                  balance
              
              ****
              
              
              
              ****
              **494,876**
              
              
              
              
              
              
              
              492,827**Treasury
                  Stock**Beginning
                  balance
              
              ****
              **(53,499**
              **)**
              
              ****
              **(1,614**
              **)**
              
              
              (43,376
              )
              
              
              (1,304
              )Treasury
                  shares acquired
              
              ****
              **(23,966**
              **)**
              
              ****
              **(761**
              **)**
              
              
              (3,519
              )
              
              
              (99
              )Treasury
                  shares reissued
              
              
              -
              
              
              
              -
              
              
              
              1,215
              
              
              
              36Ending
                  balance
              
              ****
              **(77,465**
              **)**
              
              ****
              **(2,375**
              **)**
              
              
              (45,680
              )
              
              
              (1,367
              )**Accumulated
                  Other Comprehensive Income (Loss)**Beginning
                  balance
              
              
              
              
              
              ****
              **(46,686**
              **)**
              
              
              
              
              
              
              (7,727
              )Derivative
                  hedging activity, net of tax
              
              
              
              
              
              ****
              **23,253**
              
              
              
              
              
              
              
              (72,136
              )Unrecognized
                  pension expense, net of tax
              
              
              
              
              
              ****
              **82**
              
              
              
              
              
              
              
              -Ending
                  balance
              
              ****
              
              
              
              ****
              **(23,351**
              **)**
              
              
              
              
              
              
              (79,863
              )**Total
                  Common Shareholders' Equity**
              
              ****
              
              
              
              **$**
              **1,530,176**
              
              
              ****
              
              
              
              $
              1,305,447The
                  accompanying Notes to Consolidated Financial Statements are an
                  integral
                  part of these statements.*See
                  Note 5 for additional information regarding deferred refueling
                  outage
                  costs.
 
 9
 **GREAT
                    PLAINS ENERGY****Consolidated
                    Statements of Comprehensive Income**(Unaudited)**Three
                    Months Ended**
                
                
                **Year
                    to Date****September
                    30**
                
                
                **September
                    30**As
                    Adjusted*
                
                
                
                As
                    Adjusted***2007**
                
                2006
                
                **2007**
                
                2006(thousands)Net
                    income
                **$**
                **62,189**
                
                
                $
                55,938
                
                
                **$**
                **111,149**
                
                
                $
                93,267Other
                    comprehensive income (loss)Loss
                    on derivative hedging instruments
                ****
                **(72,284**
                **)**
                
                
                (75,050
                )
                
                ****
                **(23,741**
                **)**
                
                
                (152,214
                )Income
                    taxes
                ****
                **29,121**
                
                
                
                30,631
                
                
                ****
                **9,188**
                
                
                
                62,966Net
                    loss on derivative hedging instruments
                ****
                **(43,163**
                **)**
                
                
                (44,419
                )
                
                ****
                **(14,553**
                **)**
                
                
                (89,248
                )Reclassification
                    to expenses, net of tax
                ****
                **15,324**
                
                
                
                7,576
                
                
                ****
                **37,806**
                
                
                
                17,112Derivative
                    hedging activity, net of tax
                ****
                **(27,839**
                **)**
                
                
                (36,843
                )
                
                ****
                **23,253**
                
                
                
                (72,136
                )Change
                    in unrecognized pension expense
                ****
                **147**
                
                
                
                -
                
                
                ****
                **(9**
                **)**
                
                
                -Income
                    taxes
                ****
                **(59**
                **)**
                
                
                -
                
                
                ****
                **91**
                
                
                
                -Net
                    change in unrecognized pension expense****
                **88**
                
                
                
                -
                
                
                ****
                **82**
                
                
                
                -Comprehensive
                    income
                **$**
                **34,438**
                
                
                $
                19,095
                
                
                **$**
                **134,484**
                
                
                $
                21,131The
                    accompanying Notes to Consolidated Financial Statements are an
                    integral
                    part of these statements.*See
                    Note 5 for additional information regarding deferred refueling
                    outage
                    costs.
 10


**KANSAS
                CITY POWER & LIGHT COMPANY****Consolidated
                Balance Sheets**(Unaudited)**September
                30**
            
            December
                31**2007**
            
            2006**ASSETS**
            
            (thousands)**Current
                Assets**Cash
                and cash equivalents
            
            **$**
            **653**
            
            
            $
            1,788Restricted
                cash
            
            ****
            **146,500**
            
            
            
            -Receivables,
                net
            
            ****
            **177,534**
            
            
            
            114,294Fuel
                inventories, at average cost
            
            ****
            **35,397**
            
            
            
            27,811Materials
                and supplies, at average cost
            
            ****
            **63,347**
            
            
            
            59,829Deferred
                refueling outage costs
            
            ****
            **8,147**
            
            
            
            13,921Refundable
                income taxes
            
            ****
            **-**
            
            
            
            7,229Deferred
                income taxes
            
            ****
            **5,950**
            
            
            
            52Prepaid
                expenses
            
            ****
            **8,342**
            
            
            
            9,673Derivative
                instruments
            
            ****
            **663**
            
            
            
            179Total
            
            ****
            **446,533**
            
            
            
            234,776**Nonutility
                Property and Investments**Nuclear
                decommissioning trust fund
            
            ****
            **110,668**
            
            
            
            104,066Other
            
            ****
            **6,464**
            
            
            
            6,480Total
            
            ****
            **117,132**
            
            
            
            110,546**Utility
                Plant, at Original Cost**Electric
            
            ****
            **5,419,610**
            
            
            
            5,268,485Less-accumulated
                depreciation
            
            ****
            **2,554,815**
            
            
            
            2,456,199Net
                utility plant in service
            
            ****
            **2,864,795**
            
            
            
            2,812,286Construction
                work in progress
            
            ****
            **388,010**
            
            
            
            214,493Nuclear
                fuel, net of amortization of $115,991 and $103,381
            
            ****
            **64,380**
            
            
            
            39,422Total
            
            ****
            **3,317,185**
            
            
            
            3,066,201**Deferred
                Charges and Other Assets**Regulatory
                assets
            
            ****
            **421,718**
            
            
            
            434,392Other
            
            ****
            **13,167**
            
            
            
            13,584Total
            
            ****
            **434,885**
            
            
            
            447,976Total
            
            **$**
            **4,315,735**
            
            
            $
            3,859,499The
                disclosures regarding consolidated KCP&L included in the accompanying
                Notes to Consolidated FinancialStatements
                are an integral part of these statements.




11


**KANSAS
                CITY POWER & LIGHT
                COMPANY****Consolidated
                Balance Sheets**(Unaudited)**September
                30**
            
            December
                31**2007**
            
            2006**LIABILITIES
                AND CAPITALIZATION**
            
            (thousands)**Current
                Liabilities**Notes
                payable
            
            **$**
            **50,000**
            
            
            $
            -Notes
                payable to Great Plains Energy
            
            ****
            **600**
            
            
            
            550Commercial
                paper
            
            ****
            **208,647**
            
            
            
            156,400Current
                maturities of long-term debt
            
            ****
            **-**
            
            
            
            225,500EIRR
                bonds classified as current
            
            ****
            **146,500**
            
            
            
            144,742Accounts
                payable
            
            ****
            **177,975**
            
            
            
            181,805Accrued
                taxes
            
            ****
            **60,441**
            
            
            
            18,165Accrued
                interest
            
            ****
            **19,066**
            
            
            
            12,461Accrued
                compensation and benefits
            
            ****
            **21,974**
            
            
            
            24,641Pension
                and post-retirement liability
            
            ****
            **841**
            
            
            
            841Derivative
                instruments
            
            ****
            **52**
            
            
            
            2,687Other
            
            ****
            **8,844**
            
            
            
            8,469Total
            
            ****
            **694,940**
            
            
            
            776,261**Deferred
                Credits and Other Liabilities**Deferred
                income taxes
            
            ****
            **657,522**
            
            
            
            660,046Deferred
                investment tax credits
            
            ****
            **27,395**
            
            
            
            28,458Asset
                retirement obligations
            
            ****
            **94,147**
            
            
            
            91,824Pension
                and post-retirement liability
            
            ****
            **173,878**
            
            
            
            164,189Regulatory
                liabilities
            
            ****
            **119,854**
            
            
            
            114,674Derivative
                instruments
            
            ****
            **24**
            
            
            
            39Other
            
            ****
            **54,304**
            
            
            
            33,678Total
            
            ****
            **1,127,124**
            
            
            
            1,092,908**Capitalization**
            
            ****Common
                shareholder's equityCommon
                stock-1,000 shares authorized without par value1
                share issued, stated value
            
            ****
            **1,115,656**
            
            
            
            1,021,656Retained
                earnings
            
            ****
            **365,697**
            
            
            
            354,802Accumulated
                other comprehensive income
            
            ****
            **8,960**
            
            
            
            6,685Total
            
            ****
            **1,490,313**
            
            
            
            1,383,143Long-term
                debt (Note 8)
            
            ****
            **1,003,358**
            
            
            
            607,187Total
            
            ****
            **2,493,671**
            
            
            
            1,990,330**Commitments
                and Contingencies (Note 14)**
            
            ****Total
            
            **$**
            **4,315,735**
            
            
            $
            3,859,499The
                disclosures regarding consolidated KCP&L included in the accompanying
                Notes to Consolidated FinancialStatements
                are an integral part of these statements.


12


**KANSAS
                CITY POWER & LIGHT
                COMPANY****Consolidated
                Statements of Income**(Unaudited)**Three
                Months Ended**
            
            
            **Year
                to Date****September
                30**
            
            
            **September
                30**As
                Adjusted*
            
            
            
            As
                Adjusted***2007**
            
            
            2006
            
            
            **2007**
            
            
            2006**Operating
                Revenues**
            
            (thousands)Electric
                revenues
            
            **$**
            **416,049**
            
            
            $
            359,270
            
            
            **$**
            **990,844**
            
            
            $
            890,551**Operating
                Expenses**Fuel
            
            ****
            **75,624**
            
            
            
            76,254
            
            
            ****
            **186,240**
            
            
            
            178,051Purchased
                power
            
            ****
            **41,254**
            
            
            
            5,157
            
            
            ****
            **80,360**
            
            
            
            18,844Skill
                set realignment costs
            
            ****
            **-**
            
            
            
            1,330
            
            
            ****
            **-**
            
            
            
            15,560Operating
                expenses
            
            ****
            **75,710**
            
            
            
            69,316
            
            
            ****
            **223,371**
            
            
            
            196,556Maintenance
            
            ****
            **19,421**
            
            
            
            19,394
            
            
            ****
            **72,327**
            
            
            
            65,890Depreciation
                and amortization
            
            ****
            **44,183**
            
            
            
            38,451
            
            
            ****
            **130,943**
            
            
            
            112,797General
                taxes
            
            ****
            **32,917**
            
            
            
            30,894
            
            
            ****
            **87,265**
            
            
            
            84,058(Gain)
                loss on property
            
            ****
            **-**
            
            
            
            26
            
            
            ****
            **11**
            
            
            
            (572
            )Other
            
            ****
            **-**
            
            
            
            12
            
            
            ****
            **156**
            
            
            
            22Total
            
            ****
            **289,109**
            
            
            
            240,834
            
            
            ****
            **780,673**
            
            
            
            671,206Operating
                income
            
            ****
            **126,940**
            
            
            
            118,436
            
            
            ****
            **210,171**
            
            
            
            219,345Non-operating
                income
            
            ****
            **1,263**
            
            
            
            8,586
            
            
            ****
            **5,985**
            
            
            
            13,121Non-operating
                expenses
            
            ****
            **(1,025**
            **)**
            
            
            (2,049
            )
            
            ****
            **(3,371**
            **)**
            
            
            (4,341
            )Interest
                charges
            
            ****
            **(17,099**
            **)**
            
            
            (15,569
            )
            
            ****
            **(52,032**
            **)**
            
            
            (45,473
            )Income
                before income taxes
            
            ****
            **110,079**
            
            
            
            109,404
            
            
            ****
            **160,753**
            
            
            
            182,652Income
                taxes
            
            ****
            **(33,497**
            **)**
            
            
            (39,863
            )
            
            ****
            **(45,680**
            **)**
            
            
            (63,506
            )Net
                income
            
            **$**
            **76,582**
            
            
            $
            69,541
            
            
            **$**
            **115,073**
            
            
            $
            119,146The
                disclosures regarding consolidated KCP&L included in the accompanying
                Notes to Consolidated FinancialStatements
                are an integral part of these statements.*See
                Note 5 for additional information regarding deferred refueling outage
                costs.






13


**KANSAS
                CITY POWER & LIGHT
                COMPANY****Consolidated
                Statements of Cash Flows**(Unaudited)As
                Adjusted***Year
                to Date September 30**
            
            **2007**
            
            2006**Cash
                Flows from Operating Activities**
            
            (thousands)Net
                income
            
            **$**
            **115,073**
            
            
            $
            119,146Adjustments
                to reconcile income to net cash from operating activities:Depreciation
                and amortization
            
            ****
            **130,943**
            
            
            
            112,797Amortization
                of:Nuclear
                fuel
            
            ****
            **12,610**
            
            
            
            11,789Other
            
            ****
            **3,939**
            
            
            
            4,955Deferred
                income taxes, net
            
            ****
            **16,858**
            
            
            
            (1,530
            )Investment
                tax credit amortization
            
            ****
            **(1,063**
            **)**
            
            
            (2,285
            )Gain
                (loss) on property
            
            ****
            **11**
            
            
            
            (572
            )Other
                operating activities (Note 3)
            
            ****
            **(14,631**
            **)**
            
            
            6,869Net
                cash from operating activities
            
            ****
            **263,740**
            
            
            
            251,169**Cash
                Flows from Investing Activities**Utility
                capital expenditures
            
            ****
            **(359,657**
            **)**
            
            
            (371,056
            )Allowance
                for borrowed funds used during construction
            
            ****
            **(10,575**
            **)**
            
            
            (4,060
            )Purchases
                of nonutility property
            
            ****
            **(33**
            **)**
            
            
            (51
            )Proceeds
                from sale of assets
            
            ****
            **73**
            
            
            
            319Change
                in restricted cash
            
            ****
            **(146,500**
            **)**
            
            
            -Purchases
                of nuclear decommissioning trust investments
            
            ****
            **(47,149**
            **)**
            
            
            (37,333
            )Proceeds
                from nuclear decommissioning trust investments
            
            ****
            **44,387**
            
            
            
            34,596Hawthorn
                No. 5 partial litigation recoveries
            
            ****
            **-**
            
            
            
            15,829Other
                investing activities
            
            ****
            **(4,728**
            **)**
            
            
            (852
            )Net
                cash from investing activities
            
            ****
            **(524,182**
            **)**
            
            
            (362,608
            )**Cash
                Flows from Financing Activities**Issuance
                of long-term debt
            
            ****
            **396,080**
            
            
            
            -Repayment
                of long-term debt
            
            ****
            **(225,500**
            **)**
            
            
            -Net
                change in short-term borrowings
            
            ****
            **102,297**
            
            
            
            48,750Dividends
                paid to Great Plains Energy
            
            ****
            **(104,000**
            **)**
            
            
            (74,001
            )Equity
                contribution from Great Plains Energy
            
            ****
            **94,000**
            
            
            
            134,615Issuance
                fees
            
            ****
            **(3,570**
            **)**
            
            
            (486
            )Net
                cash from financing activities
            
            ****
            **259,307**
            
            
            
            108,878**Net
                Change in Cash and Cash Equivalents**
            
            ****
            **(1,135**
            **)**
            
            
            (2,561
            )**Cash
                and Cash Equivalents at Beginning of Year**
            
            ****
            **1,788**
            
            
            
            2,961**Cash
                and Cash Equivalents at End of Period**
            
            **$**
            **653**
            
            
            $
            400The
                disclosures regarding consolidated KCP&L included in the accompanying
                Notes to Consolidated FinancialStatements
                are an integral part of these statements.*
                See Note 5 for additional information regarding deferred refueling
                outage
                costs.




14


**KANSAS
                  CITY POWER & LIGHT COMPANY****Consolidated
                  Statements of Common Shareholder's Equity**(Unaudited)As
                  Adjusted***Year
                  to Date September 30**
              
              **2007**
              
              
              2006**Shares**
              
              
              **Amount**
              
              
              Shares
              
              
              Amount(thousands,
                  except share amounts)**Common
                  Stock**Beginning
                  balance
              
              ****
              **1**
              
              
              **$**
              **1,021,656**
              
              
              
              1
              
              
              $
              887,041Equity
                  contribution from Great Plains Energy
              
              ****
              **-**
              
              
              ****
              **94,000**
              
              
              
              -
              
              
              
              134,615Ending
                  balance
              
              ****
              **1**
              
              
              ****
              **1,115,656**
              
              
              
              1
              
              
              
              1,021,656**Retained
                  Earnings**Beginning
                  balance
              
              
              
              
              
              ****
              **354,802**
              
              
              
              
              
              
              
              294,481Cumulative
                  effect of a change in accounting principle (Note 12)
              
              ****
              **(178**
              **)**
              
              
              
              
              
              
              -Net
                  income
              
              
              
              
              
              ****
              **115,073**
              
              
              
              
              
              
              
              119,146Dividends:Common
                  stock held by Great Plains Energy
              
              
              
              
              
              ****
              **(104,000**
              **)**
              
              
              
              
              
              
              (74,001
              )Ending
                  balance
              
              ****
              
              
              
              ****
              **365,697**
              
              
              
              
              
              
              
              339,626**Accumulated
                  Other Comprehensive Income (Loss)**Beginning
                  balance
              
              
              
              
              
              ****
              **6,685**
              
              
              
              
              
              
              
              (29,909
              )Derivative
                  hedging activity, net of tax
              
              
              
              
              
              ****
              **2,275**
              
              
              
              
              
              
              
              (693
              )Ending
                  balance
              
              ****
              
              
              
              ****
              **8,960**
              
              
              
              
              
              
              
              (30,602
              )**Total
                  Common Shareholder's Equity**
              
              ****
              
              
              
              **$**
              **1,490,313**
              
              
              ****
              
              
              
              $
              1,330,680The
                  disclosures regarding consolidated KCP&L included in the accompanying
                  Notes to Consolidated FinancialStatements
                  are an integral part of these statements.*See
                  Note 5 for additional information regarding deferred refueling
                  outage
                  costs.
 15
 **KANSAS
                  CITY POWER & LIGHT
                  COMPANY****Consolidated
                  Statements of Comprehensive Income**(Unaudited)**Three
                  Months Ended**
              
              
              **Year
                  to Date****September
                  30**
              
              
              **September
                  30**As
                  Adjusted*
              
              
              
              As
                  Adjusted***2007**
              
              2006
              
              **2007**
              
              2006(thousands)Net
                  income
              **$**
              **76,582**
              
              
              $
              69,541
              
              
              **$**
              **115,073**
              
              
              $
              119,146Other
                  comprehensive incomeGain
                  (loss) on derivative hedging instruments
              ****
              **334**
              
              
              
              (6,105
              )
              
              ****
              **4,076**
              
              
              
              (812
              )Income
                  taxes
              ****
              **(125**
              **)**
              
              
              2,295
              
              
              ****
              **(1,532**
              **)**
              
              
              305Net
                  gain (loss) on derivative hedging instruments****
              **209**
              
              
              
              (3,810
              )
              
              ****
              **2,544**
              
              
              
              (507
              )Reclassification
                  to expenses, net of tax
              ****
              **(128**
              **)**
              
              
              (61
              )
              
              ****
              **(269**
              **)**
              
              
              (186
              )Derivative
                  hedging activity, net of tax
              ****
              **81**
              
              
              
              (3,871
              )
              
              ****
              **2,275**
              
              
              
              (693
              )Comprehensive
                  income
              **$**
              **76,663**
              
              
              $
              65,670
              
              
              **$**
              **117,348**
              
              
              $
              118,453The
                  disclosures regarding consolidated KCP&L included in the accompanying
                  Notes to Consolidated Financial Statements are anintegral
                  part of these statements.*See
                  Note 5 for additional information regarding deferred refueling
                  outage
                  costs.


16


**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,” “KCP&L” and “consolidated KCP&L” are used
        throughout this report.  “Great Plains Energy” and “Company” refer to
        Great Plains Energy Incorporated and its consolidated subsidiaries, unless
        otherwise indicated.  “KCP&L” refers to Kansas City Power &
Light Company, and “consolidated KCP&L” refers to KCP&L and its
        consolidated subsidiaries.
  **1.**
              **SUMMARY
                  OF SIGNIFICANT ACCOUNTING
                  POLICIES**
  **Organization**
 Great
        Plains Energy is a public utility holding company and does not own or operate
        any significant assets other than the stock of its
        subsidiaries.  Great Plains Energy has four wholly owned direct
        subsidiaries with operations or active subsidiaries:
  ·
              KCP&L
                  is an integrated, regulated electric utility that provides electricity
                  to
                  customers primarily in the states of Missouri and
                  Kansas.  KCP&L has two wholly owned subsidiaries, Kansas
                  City Power & Light Receivables Company (Receivables Company) and Home
                  Service Solutions Inc. (HSS).  HSS has no active
                  operations.
  ·
              KLT
                  Inc. is an intermediate holding company that primarily holds an
                  indirect
                  interest in Strategic Energy, L.L.C. (Strategic Energy), which
                  provides
                  competitive retail electricity supply services in several electricity
                  markets offering retail choice, and holds investments in affordable
                  housing limited partnerships.  KLT Inc. also wholly owns KLT Gas
                  Inc. (KLT Gas), which has no active
                  operations.
  ·
              Innovative
                  Energy Consultants Inc. (IEC) is an intermediate holding company
                  that
                  holds an indirect interest in Strategic Energy.  IEC does not
                  own or operate any assets other than its indirect interest in Strategic
                  Energy.  When combined with KLT Inc.’s indirect interest in
                  Strategic Energy, the Company indirectly owns 100% of Strategic
                  Energy.
  ·
              Great
                  Plains Energy Services Incorporated (Services) provides services
                  at cost
                  to Great Plains Energy and its subsidiaries, including consolidated
                  KCP&L.
  The
        operations of Great Plains Energy and its subsidiaries are divided into two
        reportable segments, KCP&L and Strategic Energy.  Great Plains
        Energy’s legal structure differs from the functional management and financial
        reporting of its reportable segments.  Other activities not considered
        a reportable segment include HSS, Services, all KLT Inc. activity other than
        Strategic Energy, and holding company operations.
  **Cash
        and Cash Equivalents**
 Cash
        equivalents consist of highly liquid investments with original maturities
        of
        three months or less at acquisition.  For Great Plains Energy, this
        includes Strategic Energy’s cash held in trust of $2.8 million and $8.8 million
        at September 30, 2007, and December 31, 2006, respectively.
  Strategic
        Energy has entered into collateral arrangements with selected electricity
        power
        suppliers that require selected customers to remit payment to lockboxes that
        are
        held in trust and managed by a trustee.  As part of the trust
        administration, the trustee remits payment to the supplier of electricity
        purchased by Strategic Energy.  On a monthly basis, any remittances
        into the lockboxes in excess of disbursements to the supplier are remitted
        back
        to Strategic Energy.
  17
 **Restricted
        Cash**
 At
        September 30, 2007, the cash proceeds of $146.5 million from KCP&L’s EIRR
        Bonds Series 2007A and 2007B issued during the third quarter of 2007 were
        restricted for the repayment of Series 1998 A, B, and D EIRR bonds on October
        1,
        2007.
  **Basic
        and Diluted Earnings Per Common Share Calculation**
 To
        determine basic EPS, preferred stock dividend requirements are deducted from
        net
        income before dividing by the average number of common shares
        outstanding.  The effect of dilutive securities, calculated using the
        treasury stock method, assumes the issuance of common shares applicable to
        stock
        options, performance shares, restricted stock, a forward sale agreement and
        FELINE PRIDESSM.
  The
        following table reconciles Great Plains Energy’s basic and diluted
        EPS.


**Three
                Months Ended**
            
            
            
            **Year
                to Date****September
                30**
            
            
            
            **September
                30****As
              Adjusted**
            
            
            
            
            **As
              Adjusted****2007**
            
            
            **2006**
            
            
            
            **2007**
            
            
            **2006****Income**
            
            (millions,
                except per share amounts)Net
                income
            
            $
            62.1
            
            
            $
            55.9
            
            
            
            $
            111.1
            
            
            $
            93.2Less:
                preferred stock dividend requirements
            
            
            0.3
            
            
            
            0.5
            
            
            
            
            1.2
            
            
            
            1.3Income
                available to common shareholders
            
            $
            61.8
            
            
            $
            55.4
            
            
            
            $
            109.9
            
            
            $
            91.9**Common
                Shares Outstanding**Average
                number of common shares outstanding
            
            
            85.6
            
            
            
            80.1
            
            
            
            
            84.7
            
            
            
            77.3Add:
                effect of dilutive securities
            
            
            0.1
            
            
            
            0.2
            
            
            
            
            0.3
            
            
            
            0.1Diluted
                average number of common shares outstanding
            
            
            85.7
            
            
            
            80.3
            
            
            
            
            85.0
            
            
            
            77.4**Basic
                EPS**
            
            $
            0.72
            
            
            $
            0.69
            
            
            
            $
            1.30
            
            
            $
            1.19**Diluted
                EPS**
            
            $
            0.72
            
            
            $
            0.69
            
            
            
            $
            1.29
            
            
            $
            1.19


For
      the
      three months ended and year to date September 30, 2007, the computation of
      diluted EPS excludes anti-dilutive shares of 182,807 and 134,788 performance
      shares and 421,685 and 381,451 restricted stock shares,
      respectively.  There were no anti-dilutive shares applicable to FELINE
      PRIDES, stock options or a forward sale agreement.  FELINE PRIDES
      settled in the first quarter of 2007 and the forward sale agreement settled
      in
      the second quarter of 2007.  For the three months ended and year to
      date September 30, 2006, the computation of diluted EPS excludes anti-dilutive
      shares of 105,198 and 106,706 performance shares and 99,838 and 116,468
      restricted stock shares, respectively.  Additionally, for the three
      months ended and year to date September 30, 2006, 6.5 million of anti-dilutive
      FELINE PRIDES were excluded from the computation of diluted EPS and there were
      no anti-dilutive shares applicable to stock options or a forward sale
      agreement.


**Dividends
        Declared**
 In
        October 2007, the Board of Directors declared a quarterly dividend of $0.415
        per
        share on Great Plains Energy’s common stock.  The common dividend is
        payable December 20, 2007, to shareholders of record as of November 29,
        2007.  The Board of Directors also declared regular dividends on Great
        Plains Energy’s preferred stock, payable March 1, 2008, to shareholders of
        record as of February 8, 2008.
 
 18
 **2.**
              **ANTICIPATED
                  ACQUISITION OF AQUILA,
                  INC.**
  On
        February 6, 2007, Great Plains Energy entered into an agreement to acquire
        all
        outstanding shares of Aquila, Inc. (Aquila) for $1.80 in cash plus 0.0856
        of a
        share of Great Plains Energy common stock for each share of Aquila common
        stock.  Immediately prior to Great Plains Energy’s acquisition of
        Aquila, Black Hills Corporation (Black Hills) will acquire Aquila’s electric
        utility in Colorado and its gas utilities in Colorado, Kansas, Nebraska and
        Iowa.  Each of the two transactions is conditioned on the completion
        of the other transaction and is expected to close in the first quarter of
        2008.  Following closing, Great Plains Energy will own Aquila and its
        Missouri-based utilities consisting of the Missouri Public Service and St.
        Joseph Light & Power divisions, as well as Aquila’s merchant service
        operations, which primarily consist of the 340MW Crossroads power generating
        facility and residual natural gas contracts.
  Great
        Plains Energy’s acquisition of Aquila was unanimously approved by both Great
        Plains Energy’s and Aquila’s Boards of Directors and is still subject to
        regulatory approvals from the Public Service Commission of the State of Missouri
        (MPSC) and The State Corporation Commission of the State of Kansas (KCC);
        the
        closing of the asset sale to Black Hills; as well as other customary
        conditions.  In April 2007, Great Plains Energy, KCP&L and Aquila
        filed joint applications with the MPSC and KCC for approval of the acquisition
        of Aquila by Great Plains Energy.  These filings were updated in
        August 2007 and orders are expected in the first quarter of 2008.  The
        MPSC Staff has filed testimony asserting that the transaction is detrimental
        to
        the public interest and should not be approved.  Other parties in the
        MPSC case have asserted that the transaction should not be approved, or approved
        with conditions.  In August 2007, Great Plains Energy and Aquila
        received early termination of the waiting period for their respective
        Hart-Scott-Rodino pre-merger notifications relating to the acquisition of
        Aquila
        by Great Plains Energy.  In October 2007, FERC granted the Great
        Plains Energy, KCP&L, Aquila and Black Hills joint application for approval
        of the transactions.  Also in October 2007, Great Plains Energy
        received approval from its shareholders to issue common stock in connection
        with
        the anticipated acquisition of Aquila and Aquila’s shareholders approved the
        acquisition of Aquila by Great Plains Energy.
  Direct
        transaction costs of the acquisition incurred by Great Plains Energy of $14.8
        million at September 30, 2007, are deferred and will be included in purchase
        accounting treatment upon consummation of the acquisition unless regulatory
        accounting treatment is authorized.  The MPSC and KCC applications
        requested authorization to amortize these costs plus non-labor
        transition-related costs over a five-year period beginning January 1, 2008,
        or
        the month immediately following consummation of the merger, whichever occurs
        later.  Transition-related costs were $1.4 million and $2.7 million
        for the three months ended and year to date September 30, 2007,
        respectively.  The MPSC and KCC applications proposed to regulators
        that estimated utility operational synergy savings, net of transition costs,
        resulting from the transaction be shared between retail electric customers
        and
        Great Plains Energy shareholders for a period of five
        years.  Additionally, the MPSC application requested approval for the
        use of the additional amortization mechanism for Aquila’s Missouri-based
        utilities, as implemented in KCP&L’s 2006 rate case, once Aquila achieves
        financial metrics necessary to support an investment-grade credit
        rating.  The MPSC application also requested authorization for the
        distribution of proceeds from the Black Hills asset sale by Aquila to fund
        substantially all of the cash portion of the merger consideration to Aquila
        shareholders.  The FERC application requested a declaration that the
        distribution will not violate the Federal Power Act, which the FERC provided
        as
        part of the October 18, 2007, approval.
  19
 Two
        purported shareholder class action lawsuits were filed against Aquila and
        certain of its individual directors and officers in February 2007, in Jackson
        County, Missouri, Circuit Court seeking, among other things, an injunction
        against the consummation of the proposed transaction.  The lawsuits
        allege, among other things, breaches of fiduciary duties and self-dealing
        by
        Aquila directors and officers.  In July 2007, the plaintiff in one of
        the suits amended his petition to include Great Plains Energy and Black Hills
        as
        defendants, alleging that they aided and abetted alleged breaches of fiduciary
        duties by the named Aquila directors and officers.  In July 2007, the
        Court consolidated the two cases and directed plaintiffs to file a Consolidated
        Petition, which was done in August 2007.  Aquila, Great Plains Energy
        and Black Hills filed motions to dismiss this case, which were granted on
        October 29, 2007.  Plaintiffs have 30 days to appeal the
        dismissal.
  **3.**
              **SUPPLEMENTAL
                  CASH FLOW
                  INFORMATION**


***Great
                Plains Energy Other Operating Activities*****As
                Adjusted****Year
                to Date September 30**
            
            **2007**
            
            **2006**Cash
                flows affected by changes in:
            
            (millions)Receivables
            
            $
            (136.3
            )
            
            $
            (96.2
            )Fuel
                inventories
            
            
            (8.4
            )
            
            
            (8.2
            )Materials
                and supplies
            
            
            (3.5
            )
            
            
            (2.4
            )Accounts
                payable
            
            
            26.3
            
            
            
            6.9Accrued
                taxes
            
            
            59.2
            
            
            
            60.6Accrued
                interest
            
            
            7.1
            
            
            
            0.2Deferred
                refueling outage costs
            
            
            5.8
            
            
            
            2.6Deposits
                with suppliers
            
            
            -
            
            
            
            (4.4
            )Pension
                and post-retirement benefit obligations
            
            
            16.8
            
            
            
            10.8Allowance
                for equity funds used during construction
            
            
            (0.6
            )
            
            
            (3.7
            )Deferred
                merger costs
            
            
            (12.1
            )
            
            
            -Proceeds
                from forward starting swaps
            
            
            (1.2
            )
            
            
            -Fair
                value impacts of forward starting swaps
            
            
            9.0
            
            
            
            -Other
            
            
            (10.9
            )
            
            
            10.8Total
                other operating activities
            
            $
            (48.8
            )
            
            $
            (23.0
            )Cash
                paid during the period:Interest
            
            $
            58.6
            
            
            $
            50.9Income
                taxes
            
            $
            3.4
            
            
            $
            39.9Non-cash
                investing activities:Liabilities
                assumed for capital expenditures
            
            $
            52.5
            
            
            $
            34.7






20


***Consolidated
                KCP&L Other Operating Activities*****As
                Adjusted****Year
                to Date September 30**
            
            **2007**
            
            **2006**Cash
                flows affected by changes in:
            
            (millions)Receivables
            
            $
            (63.3
            )
            
            $
            (52.1
            )Fuel
                inventories
            
            
            (8.4
            )
            
            
            (8.2
            )Materials
                and supplies
            
            
            (3.5
            )
            
            
            (2.4
            )Accounts
                payable
            
            
            (24.9
            )
            
            
            (9.2
            )Accrued
                taxes
            
            
            61.1
            
            
            
            71.9Accrued
                interest
            
            
            6.6
            
            
            
            0.2Deferred
                refueling outage costs
            
            
            5.8
            
            
            
            2.6Pension
                and post-retirement benefit obligations
            
            
            14.9
            
            
            
            8.3Allowance
                for equity funds used during construction
            
            
            (0.6
            )
            
            
            (3.7
            )Proceeds
                from forward starting swaps
            
            
            3.3
            
            
            
            -Other
            
            
            (5.6
            )
            
            
            (0.5
            )Total
                other operating activities
            
            $
            (14.6
            )
            
            $
            6.9Cash
                paid during the period:Interest
            
            $
            44.0
            
            
            $
            43.6Income
                taxes
            
            $
            7.5
            
            
            $
            29.1Non-cash
                investing activities:Liabilities
                assumed for capital expenditures
            
            $
            52.5
            
            
            $
            34.4


**Significant
      Non-Cash Items**


In
        February 2007, Great Plains Energy issued 5.2 million shares of common stock
        in
        satisfaction of the FELINE PRIDES stock purchase contracts and the retirement
        of
        the $163.6 million FELINE PRIDES Senior Notes.
  **4.**
              **RECEIVABLES**
  The
        Company’s receivables are detailed in the following table.


**September
                30**
            
            **December
                31****2007**
            
            **2006****Consolidated
                KCP&L**
            
            (millions)Customer
                accounts receivable (a)
            
            $
            82.3
            
            
            $
            35.2Allowance
                for doubtful accounts
            
            
            (1.9
            )
            
            
            (1.1
            )Other
                receivables
            
            
            97.1
            
            
            
            80.2Consolidated
                KCP&L receivables
            
            
            177.5
            
            
            
            114.3**Other
                Great Plains Energy**Other
                receivables
            
            
            305.8
            
            
            
            229.2Allowance
                for doubtful accounts
            
            
            (7.6
            )
            
            
            (4.1
            )Great
                Plains Energy receivables
            
            $
            475.7
            
            
            $
            339.4(a)
            Customer
                accounts receivable included unbilled receivables of $44.5
                millionand
                $32.0 million at September 30, 2007, and December 31, 2006,
                respectively.


Consolidated
      KCP&L’s other receivables at September 30, 2007, and December 31, 2006,
      consisted primarily of receivables from partners in jointly owned electric
      utility plants and wholesale sales receivables.  Great Plains Energy’s
      other receivables at September 30, 2007, and December 31, 2006, consisted
      primarily of accounts receivable held by Strategic Energy, including unbilled
      receivables of $155.7 million and $95.0 million, respectively.


21
 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.  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.
  Information
        regarding KCP&L’s sale of accounts receivable to Receivables Company is
        reflected in the following tables.


**Receivables**
            
            
            **Consolidated****Three
                Months Ended September 30, 2007**
            
            **KCP&L**
            
            
            **Company**
            
            
            **KCP&L**(millions)Receivables
                (sold) purchased
            
            $
            (364.8
            )
            
            $
            364.8
            
            
            $
            -Gain
                (loss) on sale of accounts receivable (a)
            
            
            (4.7
            )
            
            
            4.3
            
            
            
            (0.4
            )Servicing
                fees
            
            
            1.0
            
            
            
            (1.0
            )
            
            
            -Fees
                to outside investor
            
            
            -
            
            
            
            (1.0
            )
            
            
            (1.0
            )**Cash
                flows during the period**Cash
                from customers transferred toReceivables
                Company
            
            
            (342.6
            )
            
            
            342.6
            
            
            
            -Cash
                paid to KCP&L for receivables purchased
            
            
            338.3
            
            
            
            (338.3
            )
            
            
            -Servicing
                fees
            
            
            1.0
            
            
            
            (1.0
            )
            
            
            -Interest
                on intercompany note
            
            
            1.3
            
            
            
            (1.3
            )
            
            
            -


**Receivables**
            
            
            **Consolidated****Year
                to Date September 30, 2007**
            
            **KCP&L**
            
            
            **Company**
            
            
            **KCP&L**(millions)Receivables
                (sold) purchased
            
            $
            (857.0
            )
            
            $
            857.0
            
            
            $
            -Gain
                (loss) on sale of accounts receivable (a)
            
            
            (10.5
            )
            
            
            9.6
            
            
            
            (0.9
            )Servicing
                fees
            
            
            2.4
            
            
            
            (2.4
            )
            
            
            -Fees
                to outside investor
            
            
            -
            
            
            
            (3.0
            )
            
            
            (3.0
            )**Cash
                flows during the period**Cash
                from customers transferred toReceivables
                Company
            
            
            (815.0
            )
            
            
            815.0
            
            
            
            -Cash
                paid to KCP&L for receivables purchased
            
            
            805.3
            
            
            
            (805.3
            )
            
            
            -Servicing
                fees
            
            
            2.4
            
            
            
            (2.4
            )
            
            
            -Interest
                on intercompany note
            
            
            2.5
            
            
            
            (2.5
            )
            
            
            -





22


**Receivables**
            
            
            **Consolidated****Three
                Months Ended September 30, 2006**
            
            **KCP&L**
            
            
            **Company**
            
            
            **KCP&L**(millions)Receivables
                (sold) purchased
            
            $
            (325.5
            )
            
            $
            325.5
            
            
            $
            -Gain
                (loss) on sale of accounts receivable (a)
            
            
            (3.3
            )
            
            
            3.3
            
            
            
            -Servicing
                fees
            
            
            1.0
            
            
            
            (1.0
            )
            
            
            -Fees
                to outside investor
            
            
            -
            
            
            
            (1.0
            )
            
            
            (1.0
            )**Cash
                flows during the period**Cash
                from customers transferred toReceivables
                Company
            
            
            (323.0
            )
            
            
            323.0
            
            
            
            -Cash
                paid to KCP&L for receivables purchased
            
            
            323.6
            
            
            
            (323.6
            )
            
            
            -Servicing
                fees
            
            
            1.0
            
            
            
            (1.0
            )
            
            
            -Interest
                on intercompany note
            
            
            1.1
            
            
            
            (1.1
            )
            
            
            -


**Receivables**
            
            
            **Consolidated****Year
                to Date September 30, 2006**
            
            **KCP&L**
            
            
            **Company**
            
            
            **KCP&L**(millions)Receivables
                (sold) purchased
            
            $
            (774.8
            )
            
            $
            774.8
            
            
            $
            -Gain
                (loss) on sale of accounts receivable (a)
            
            
            (7.8
            )
            
            
            7.6
            
            
            
            (0.2
            )Servicing
                fees
            
            
            2.2
            
            
            
            (2.2
            )
            
            
            -Fees
                to outside investor
            
            
            -
            
            
            
            (2.8
            )
            
            
            (2.8
            )**Cash
                flows during the period**Cash
                from customers transferred toReceivables
                Company
            
            
            (754.0
            )
            
            
            754.0
            
            
            
            -Cash
                paid to KCP&L for receivables purchased
            
            
            750.3
            
            
            
            (750.3
            )
            
            
            -Servicing
                fees
            
            
            2.2
            
            
            
            (2.2
            )
            
            
            -Interest
                on intercompany note
            
            
            1.9
            
            
            
            (1.9
            )
            
            
            -(a)
            The
                net gain (loss) is the result of the timing difference inherent in
                collecting receivables and over the life of the agreement will net to
                zero.


In
      October 2007, Strategic Energy entered into an agreement to sell its current
      and
      future retail accounts receivable to its wholly owned subsidiary, Strategic
      Receivables, LLC (Strategic Receivables), which in turn sells undivided
      percentage ownership interests in the accounts receivable to Market Street
      Funding LLC (Market Street) and Fifth Third Bank ratably based on each
      purchaser’s commitments.  Strategic Energy sells its receivables at a
      price equal to the amount of the accounts receivable less a discount based
      on
      the prime rate and days sales outstanding (as defined in the
      agreement).  Strategic Receivables may also issue letters of credit to
      Strategic Energy, with the amount of such letters of credit being credited
      against the purchase price.  Market Street’s and Fifth Third Bank’s
      obligation to purchase accounts receivable is limited to $112.5 million and
      $62.5 million, respectively, less the proportionate aggregate amount of letters
      of credit issued pursuant to the agreement.  Strategic Energy services
      the receivables and receives an annual servicing fee of 1.0% times the daily
      average aggregate outstanding balance of receivables.  This agreement
      was entered into in conjunction with a new revolving credit facility described
      in Note 7 and terminates in October 2010.


23
 **5.**
              **NUCLEAR
                  PLANT**
  KCP&L
        owns 47% of Wolf Creek Nuclear Operating Corporation (WCNOC), the operating
        company for Wolf Creek Generating Station (Wolf Creek), KCP&L’s only nuclear
        generating unit.  Wolf Creek is regulated by the Nuclear Regulatory
        Commission (NRC), with respect to licensing, operations and safety-related
        requirements.
  **Nuclear
        Plant Decommissioning Costs**
 KCP&L’s
        decommissioning trust is reported at fair value on Great Plains Energy’s and
        consolidated KCP&L’s balance sheets and is invested in assets as detailed in
        the following table.


**September
                30**
            
            
            **December
                31****2007**
            
            
            **2006****Fair**
            
            
            **Unrealized**
            
            
            **Fair**
            
            
            **Unrealized****Value**
            
            
            **Gains**
            
            
            **Value**
            
            
            **Gains**(millions)Equity
                securities
            
            $
            54.5
            
            
            $
            9.4
            
            
            $
            50.6
            
            
            $
            10.8Debt
                securities
            
            
            53.9
            
            
            
            (0.4
            )
            
            
            50.4
            
            
            
            (0.5
            )Other
            
            
            2.3
            
            
            
            -
            
            
            
            3.1
            
            
            
            -Total
            
            $
            110.7
            
            
            $
            9.0
            
            
            $
            104.1
            
            
            $
            10.3


The
      weighted average maturity of debt securities held by the trust at September
      30,
      2007, and December 31, 2006, was 7.3 years and 6.8 years,
      respectively.  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 Ended**
            
            **Year
                to Date****September
                30**
            
            **September
                30****2007**
            
            
            **2006**
            
            
            **2007**
            
            
            **2006**(millions)Realized
                Gains
            
            $
            1.0
            
            
            $
            0.7
            
            
            $
            5.4
            
            
            $
            3.9Realized
                Losses
            
            
            (0.6
            )
            
            
            (0.3
            )
            
            
            (1.1
            )
            
            
            (0.9
            )


***Deferred
      Refueling Outage Costs***


In
        December 2006, Great Plains Energy and consolidated KCP&L adopted Financial
        Accounting Standards Board (FASB) Staff Position (FSP) No. AUG AIR-1,
“Accounting for Planned Major Maintenance Activities,” and retrospectively
        adjusted prior periods.  FSP No. AUG AIR-1 prohibits the use of the
        accrue-in-advance method of accounting for planned major maintenance
        activities.  Prior to adoption, KCP&L utilized the
        accrue-in-advance method for incremental costs to be incurred during scheduled
        Wolf Creek refueling outages.  KCP&L adopted the deferral method
        to account for operations and maintenance expenses incurred for scheduled
        refueling outages to be amortized evenly (monthly) over the unit’s 18 month
        operating cycle until the next scheduled outage.  Replacement power
        costs during the outage are expensed as incurred.
  There
        were no overall impacts to the September 30, 2006, statement of cash flows
        for
        Great Plains Energy and consolidated KCP&L.  The overall impact to
        Great Plains Energy’s and KCP&L’s consolidated statements of income for the
        three months ended and year to date September 30, 2006, was a $0.7 million
        increase in net income, or $0.01 per share, and a $2.5 million increase in
        net
        income, or $0.03 per share, respectively.
 24
 The
        following line items within the consolidated statements of income were impacted
        by the change.


**As**
            
            
            
            
            
            
            
            
            **As****Originally
                Reported**
            
            
            
            
            
            
            **Originally
                Reported****Three
                Months Ended**
            
            **As**
            
            
            **Effect
                of**
            
            **Year
                to Date**
            
            **As**
            
            
            **Effect
                of****September
                30, 2006**
            
            **Adjusted**
            
            
            **Change**
            
            **September
                30, 2006**
            
            **Adjusted**
            
            
            **Change****Great
                Plains Energy**
            
            (millions)Fuel
            
            $
            77.2
            
            
            $
            76.3
            
            
            $
            (0.9
            )
            
            $
            180.8
            
            
            $
            178.1
            
            
            $
            (2.7
            )Operating
                expense - KCP&L
            
            
            69.4
            
            
            
            69.4
            
            
            
            -
            
            
            
            196.7
            
            
            
            196.6
            
            
            
            (0.1
            )Maintenance
            
            
            19.7
            
            
            
            19.4
            
            
            
            (0.3
            )
            
            
            67.2
            
            
            
            65.9
            
            
            
            (1.3
            )Income
                taxes
            
            
            (26.5
            )
            
            
            (27.0
            )
            
            
            (0.5
            )
            
            
            (36.7
            )
            
            
            (38.3
            )
            
            
            (1.6
            )**Consolidated
                KCP&L**
            
            ******
            
            
            
            ******
            
            
            
            ******Fuel
            
            $
            77.2
            
            
            $
            76.3
            
            
            $
            (0.9
            )
            
            $
            180.8
            
            
            $
            178.1
            
            
            $
            (2.7
            )Operating
                expense
            
            
            69.4
            
            
            
            69.4
            
            
            
            -
            
            
            
            196.7
            
            
            
            196.6
            
            
            
            (0.1
            )Maintenance
            
            
            19.7
            
            
            
            19.4
            
            
            
            (0.3
            )
            
            
            67.2
            
            
            
            65.9
            
            
            
            (1.3
            )Income
                taxes
            
            
            (39.3
            )
            
            
            (39.8
            )
            
            
            (0.5
            )
            
            
            (61.9
            )
            
            
            (63.5
            )
            
            
            (1.6
            )


**6.**
              **REGULATORY
                  MATTERS**
  **KCP&L’s
        Comprehensive Energy Plan**
 In
        March
        2007, KCP&L, the Sierra Club and the Concerned Citizens of Platte County
        entered into a Collaboration Agreement that resolved disputes among the
        parties.  KCP&L agreed to pursue a set of initiatives including
        energy efficiency, additional wind generation, lower emission permit levels
        at
        its Iatan and LaCygne generating stations and other initiatives designed
        to
        offset carbon dioxide emissions.  See Note 14 for additional
        information.  KCP&L will address these matters in its future
        integrated energy resource plan in collaboration with
        stakeholders.  Full implementation of the terms of the agreement will
        necessitate approval from the appropriate authorities, as some of the
        initiatives in this agreement require either enabling legislation or regulatory
        approval.  Pursuant to the terms of the agreement, the Sierra Club
        agreed to dismiss its appeal of the approval of KCP&L’s regulatory plan by
        KCC.  The appeal by the Sierra Club and Concerned Citizens of Platte
        County of the MPSC’s approval of KCP&L’s regulatory plan was also
        dismissed.  The parties filed a joint stipulation of dismissal with
        prejudice of the appeal of the Iatan air permit and the appeal was subsequently
        dismissed.
  **KCP&L
        Regulatory Proceedings**
 On
        February 1, 2007, KCP&L filed a request with the MPSC for an annual rate
        increase of $45 million or 8.3%, which, if approved, would take effect January
        1, 2008.  In July 2007, the MPSC Staff filed its case regarding
        KCP&L’s rate request.  In its filing, the Staff asserted that
        KCP&L’s annual revenues should be increased by $0.7 million, before
        adjustments resulting from the September 30, 2007, true-up of test year
        information.  The Staff’s filing assumed adjustments resulting from
        this true-up would increase revenue requirements by $14 million, resulting
        in a
        required increase in annual revenues of $14.7 million.  This amount
        reflects approximately $15 million to $17 million in accelerated depreciation,
        which the Staff asserts will maintain certain KCP&L credit ratios at
        investment-grade levels as provided for in the stipulation and agreement
        approved by the MPSC in 2005.  Evidentiary hearings were held in
        October 2007, true-up hearings are anticipated in November 2007 and a decision
        is expected in December 2007.
  On
        March
        1, 2007, KCP&L filed a request with KCC for an annual rate increase of $47
        million in annual revenues, with about $13 million of that amount treated
        for
        accounting purposes as an increase to the depreciation
        reserve.  KCP&L reached a negotiated settlement of its request
        with certain parties to the rate proceedings and in September 2007, filed
        a
        Joint Stipulation and Agreement (Agreement) with KCC.  The Agreement
        stipulates a $28 million increase in annual revenues effective January 1,
        2008,
        with $11 million of that amount treated for accounting purposes as an increase
        to the depreciation
 25
 reserve.  The
        Agreement also recommends an Energy Cost Adjustment Clause (ECA)
        tariff.  The ECA tariff will reflect the projected annual amount of
        fuel, purchased power, emission allowances, transmission costs and asset-based
        off-system sales margin.  The ECA tariff provides that these projected
        amounts are subject to quarterly re-forecasts.  Any difference between
        the ECA revenue collected and the actual ECA amounts for a given year (which
        may
        be positive or negative) will be recovered or refunded over twelve months
        beginning April 1 of the succeeding year.
  The
        Agreement recommends various other provisions, including but not limited
        to: (i)
        establishing an energy efficiency rider as an interim mechanism to recover
        deferred costs incurred for affordability, energy efficiency and demand side
        management programs; (ii) establishing for regulatory purposes annual pension
        cost for the period beginning January 1, 2008, of approximately $40 million
        ($18
        million on a Kansas jurisdictional basis), before amounts capitalized and
        amounts billed to the other joint owners of KCP&L’s power plants, through
        the creation of a regulatory asset or liability, as appropriate; and (iii)
        amortizing over ten years the costs incurred in 2006 of approximately $9
        million
        ($4 million on a Kansas jurisdictional basis) associated with the skill set
        realignment.
  The
        Agreement is subject to KCC approval, and is voidable if not approved in
        its
        entirety.  It is possible that KCC may approve the Agreement with
        changes, or may not approve the Agreement.  A decision is expected in
        December 2007, with approved rates to take effect January 1, 2008.
  The
        rate
        increases were filed in order to help recover costs of air quality improvement
        investments included in KCP&L’s Comprehensive Energy Plan as well as higher
        fuel and other operational costs.
  **Regulatory
        Assets and Liabilities**
 KCP&L’s
        regulatory assets and liabilities are detailed in the following
        table.


**September
                  30**
              **December
                  31****2007**
              **2006****Regulatory
                  Assets**
              
              (millions)Taxes
                  recoverable through future rates
              
              $
              70.8
              
              
              $
              81.7Loss
                  on reacquired debt
              
              
              6.0
              
              
              
              6.4Change
                  in depreciable life of Wolf Creek
              
              
              45.4
              
              
              
              45.4Cost
                  of removal
              
              
              8.0
              
              
              
              8.2Asset
                  retirement obligations
              
              
              18.1
              
              
              
              16.9SFAS
                  158 pension and post-retirement costs
              
              
              177.2
              
              
              
              190.0Other
                  pension and post-retirement costs
              
              
              74.7
              
              
              
              66.9Surface
                  Transportation Board litigation expenses
              
              
              1.8
              
              
              
              1.7Deferred
                  customer programs
              
              
              10.5
              
              
              
              5.92006
                  rate case expenses
              
              
              1.9
              
              
              
              2.62007
                  rate case expenses
              
              
              0.9
              
              
              
              -Other
              
              
              6.4
              
              
              
              8.7Total
              
              $
              421.7
              
              
              $
              434.4**Regulatory
                  Liabilities**Emission
                  allowances
              
              $
              64.5
              
              
              $
              64.5Asset
                  retirement obligations
              
              
              40.7
              
              
              
              35.6Additional
                  Wolf Creek amortization (Missouri)
              
              
              14.7
              
              
              
              14.6Total
              
              $
              119.9
              
              
              $
              114.7
 26
 Except
          as
          noted below, regulatory assets for which costs have been incurred have
          been
          included (or are expected to be included, for costs incurred subsequent
          to the
          most recently approved rate case) in KCP&L’s rate base, thereby providing a
          return on invested costs.  Certain regulatory assets do not result
          from cash expenditures and therefore do not represent investments included
          in
          rate base or have offsetting liabilities that reduce rate base.  The
          regulatory asset for Statement of Financial Accounting Standards (SFAS)
          158
          pension and post-retirement costs at September 30, 2007, includes $2.5
          million,
          net of related liabilities, not included in rate base, representing the
          difference between funding and expenses recognized for the pension and
          post-retirement plans, which will be amortized in accordance with SFAS
          No. 87,
“Employers’ Accounting for Pensions.”  The regulatory asset for other
          pension and post-retirement costs at September 30, 2007, includes $36.1
          million
          representing pension settlements and financial and regulatory accounting
          method
          differences.  The pension settlements will be amortized over a
          five-year period beginning with the effective date of rates approved in
          KCP&L’s next rate case.  The accounting method difference will be
          eliminated over the life of the pension plans.  Certain insignificant
          items in Regulatory Assets – Other are also not included in rate
          base.
  **Revenue
          Sufficiency Guarantee**
 Since
          the
          April 2005 implementation of Midwest Independent Transmission System Operator
          Inc. (MISO) market operations, MISO’s business practice manuals and other
          instructions to market participants have stated that Revenue Sufficiency
          Guarantee (RSG) charges will not be imposed on day-ahead virtual offers
          to
          supply power not supported by actual generation.  RSG charges are
          collected by MISO in order to compensate generators that are standing by
          to
          supply electricity when called upon by MISO.  In April 2006, FERC
          issued an order regarding MISO RSG charges.  In its order, FERC
          interpreted MISO's tariff to require that virtual supply offers be included
          in
          the calculation of RSG charges and that to the extent that MISO did not
          charge
          market participants RSG charges on virtual supply offers, MISO violated
          its
          tariff.  The FERC order required MISO to recalculate RSG rates back to
          April 1, 2005, and make refunds to customers who paid RSG charges on imbalances,
          with interest, reflecting the recalculated charges.  In order to make
          such refunds, RSG charges could have been retroactively imposed on market
          participants who submitted virtual supply offers during the recalculation
          period.  Strategic Energy was among the MISO participants that could
          have been subject to a retroactive assessment from MISO for RSG charges
          on
          virtual supply offers it submitted during the recalculation
          period.  In October 2006, FERC issued an order on rehearing of the
          April 2006 order stating it would not assess RSG charges on virtual supply
          offers going back to April 1, 2005, but ordered prospective allocation
          of RSG to
          virtual transactions and directed MISO to propose a tariff change that
          would
          assess RSG costs to virtual supply offers based on principles of cost causation
          within 60 days of the October 2006 order.
  In
          March
          2007, FERC issued an order denying requests for rehearing of its October
          2006
          order, which refused to allow MISO to retroactively assess RSG charges
          on
          virtual supply offers.  Also in March 2007, FERC rejected MISO’s
          tariff filing that would have established a new RSG charge prospectively
          and
          instructed MISO to recalculate RSG charges from April 2006
          forward.  Parties, including Strategic Energy, have appealed and filed
          requests for rehearing.  Management believes the ultimate outcome of
          this matter will not have a significant impact on the Company’s financial
          position or results of operations; however, the actual exposure, if any,
          could
          ultimately be greater than management’s estimate depending on the outcome of
          appeals and the requests pending before FERC.  Management is unable to
          predict the outcome of any appeals or further requests for
          rehearing.
  **Seams
          Elimination Charge Adjustment**
 Seams
          Elimination Charge Adjustment (SECA) is a transitional pricing mechanism
          authorized by FERC and intended to compensate transmission owners for the
          revenue lost as a result of FERC’s elimination of regional through and out rates
          between PJM Interconnection, LLC (PJM) and MISO during a 16-month transition
          period from December 1, 2004, through March 31, 2006.  Each
          relevant PJM and MISO zone and the load-serving entities within that zone
          were
          allocated a portion of SECA based on
 27
 transmission
          services provided to that zone during 2002 and 2003.  For the three
          months ended September 30, 2007, Strategic Energy recorded no reduction
          of
          purchased power expenses and recorded $1.9 million year to date to reflect
          recoveries obtained through settlements primarily with Transmission
          Owners.  Strategic Energy did not record any significant SECA activity
          for the three months ended September 30, 2006.  Year to date September
          30, 2006, Strategic Energy recorded a reduction of purchased power expense
          of
          $2.4 million for SECA, which partially offset $2.7 million of expense recorded
          in the first quarter.  Strategic Energy billed $1.3 million year to
          date September 30, 2006 of its SECA costs to its retail customers.  No
          further retail customer billings are anticipated pending the outcome of
          proceedings discussed below.
  There
          are
          several unresolved matters and legal challenges related to SECA that are
          pending
          before FERC on rehearing.  In 2006, FERC held hearings on the justness
          and reasonableness of the SECA rate and on attempts by suppliers to shift
          SECA
          to wholesale counterparties and subsequently, a favorable initial decision
          was
          extended by an administrative law judge, which could potentially result
          in a
          refund of prior SECA payments, including payments made by Strategic
          Energy.  Management is awaiting FERC action and is unable to predict
          the outcome of legal and regulatory challenges to the SECA
          mechanism.
  **Investigation
          of Strategic Energy Non-Compliance**
 During
          the first quarter of 2007, Strategic Energy identified and self-reported an
          event of non-compliance to one of the primary market regulators
          where Strategic Energy conducts scheduling and settlement operations. 
The regulator subsequently notified Strategic Energy in April 2007 of its
          intent
          to conduct an investigation, which concluded in October 2007.  There
          will not be any adverse actions or events as an outcome of this investigation
          significantly beyond the amount of penalty recorded at September 30,
          2007.
  **7.**
                **SHORT-TERM
                    BORROWINGS AND SHORT-TERM BANK LINES OF
                    CREDIT**
  In
          July
          2007, pursuant to the terms of their credit agreements, Great Plains Energy
          and
          KCP&L transferred $200 million of unused lender commitments from the Great
          Plains Energy credit agreement to the KCP&L credit agreement.  The
          maximum aggregate amount available under the Great Plains Energy credit
          agreement was reduced to $400 million from $600 million, and the maximum
          aggregate amount available under the KCP&L credit agreement was increased to
          $600 million from $400 million.
  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, 2007, Great Plains Energy
          was in compliance with this covenant.  At September 30, 2007, Great
          Plains Energy had $36.0 million of outstanding borrowings with a weighted
          average interest rate of 5.95% and had issued letters of credit totaling
          $151.3 million under the credit facility as credit support for Strategic
          Energy.  At December 31, 2006, Great Plains Energy had no cash
          borrowings and had issued letters of credit totaling $103.7 million under
          the credit facility as credit support for Strategic Energy.
  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, 2007, KCP&L was in compliance with this
          covenant.  At September 30, 2007, KCP&L had $208.6 million of
          commercial paper outstanding, at a weighted-average interest rate of 5.79%,
          $6.8
          million of letters of credit and $50.0 million of outstanding cash borrowings
          with a weighted average interest rate of 5.47%
 28
 under
          the
          facility.  At December 31, 2006, KCP&L had $156.4 million of
          commercial paper outstanding, at a weighted-average interest rate of 5.38%,
          $8.7
          million of letters of credit and no cash borrowings under the
          facility.
  At
          September 30, 2007, Strategic Energy had a $135 million revolving credit
          facility with a group of banks, expiring in June 2009.  Under the
          agreement, $50.0 million in letters of credit had been issued and there
          were no
          cash borrowings at September 30, 2007.  At December 31, 2006,
          $59.8 million in letters of credit had been issued and there were no cash
          borrowings under the agreement.  In October 2007, Strategic Energy
          terminated the facility and entered into a new revolving credit facility
          with a
          group of banks, expiring in October 2010.  The new facility provides
          for loans and letters of credit not exceeding an aggregate of the lesser
          of $50
          million or the borrowing base, which is generally 85% of Strategic Energy’s
          retail accounts receivables plus the amount of a Great Plains Energy
          guarantee.  Great Plains Energy issued an initial guarantee in the
          amount of $12.5 million and may increase the guarantee up to a maximum
          of $27.5
          million to increase the borrowing base or to cure a default of the minimum
          fixed
          charge coverage ratio, provided that Great Plains Energy maintains certain
          favorable ratings on its senior unsecured debt.  Under the terms of
          the agreement, Strategic Energy is required to maintain, as of the end
          of each
          quarter, a minimum fixed charge coverage ratio of at least 1.05 to 1.0
          and a
          minimum EBITDA, as defined in the agreement, for the four quarters then
          ended of
          $15 million through March 31, 2008 and thereafter increasing to $17.5 million
          (through September 30, 2008), $20 million (through March 31, 2009) and
          $22.5
          million through maturity.
  At
          the
          same time, Strategic Energy entered into an agreement to sell its current
          and
          future retail accounts receivable to its wholly owned subsidiary, Strategic
          Receivables, which in turn sells undivided percentage ownership interests
          in the
          accounts receivable to Market Street and Fifth Third Bank ratably based
          on each
          purchaser’s commitments.  Strategic Receivables may also issue letters
          of credit to Strategic Energy, with the amount of such letters of credit
          being
          credited against the purchase price.  Market Street’s and Fifth Third
          Bank’s obligation to purchase accounts receivable is limited to $112.5 million
          and $62.5 million, respectively, less the proportionate aggregate amount
          of
          letters of credit issued pursuant to the agreement.  Strategic Energy
          transferred its outstanding letters of credit under the terminated revolving
          credit facility totaling $49.8 million to the receivables facility upon
          termination.
 
 29
 **8.**
                **LONG-TERM
                    DEBT AND EIRR BONDS CLASSIFIED AS CURRENT
                    LIABILITIES**
  Great
          Plains Energy and consolidated KCP&L’s long-term debt is detailed in the
          following table.
 **September
                  30**
              
              **December
                  31****Year
                  Due**
              
              **2007**
              
              **2006****Consolidated
                  KCP&L**
              
              
              
              (millions)General
                  Mortgage Bonds7.95%
                  Medium-Term Notes
              
              2007
              
              $             -
              
              $          0.54.00%*
                  EIRR bonds
              
              2012-2035
              
              158.8
              
              158.8Senior
                  Notes6.00%
              
              2007
              
              -
              
              225.06.50%
              
              2011
              
              150.0
              
              150.05.85%
              
              2017
              
              250.0
              
              -6.05%
              
              2035
              
              250.0
              
              250.0Unamortized
                  discount
              
              
              
              (1.9)
              
              (1.6)EIRR
                  bonds4.75%
                  Series 1998 A & B
              
              2015
              
              106.5
              
              105.24.75%
                  Series 1998 D
              
              2017
              
              40.0
              
              39.54.65%
                  Series 2005
              
              2035
              
              50.0
              
              50.04.05%
                  Series 2007 A & B
              
              2035
              
              146.5
              
              -Current
                  liabilitiesCurrent
                  maturities
              
              
              
              -
              
              (225.5)EIRR
                  bonds classified as current
              
              
              
              (146.5)
              
              (144.7)Total
                  consolidated KCP&L excluding current maturities
              
              
              1,003.4
              
              607.2**Other
                  Great Plains Energy**6.875%
                  Senior Notes
              
              2017
              
              100.0
              
              -Unamortized
                  discount
              
              
              
              (0.5)
              
              -7.74%
                  Affordable Housing Notes
              
              2007-2008
              
              0.9
              
              0.94.25%
                  FELINE PRIDES Senior Notes
              
              
              
              -
              
              163.6Current
                  maturities
              
              
              
              (0.6)
              
              (164.2)Total
                  consolidated Great Plains Energy excluding current
                  maturities
              
              $    1,103.2
              
              $     
                  607.5*   Weighted-average
                  interest rates at September 30, 2007.
 **Effective
        Interest Rates on Unsecured Notes at September 30, 2007**
 Interest
          rate swaps on KCP&L’s Series A, B and D EIRR bonds resulted in an effective
          interest rate of 6.67%.  As a result of amortizing the gain recognized
          in other comprehensive income (OCI) on KCP&L’s 2005 Treasury Locks
          (T-Locks), the effective interest rate on KCP&L’s 6.05% Senior Notes is
          5.78%.  During June 2007, KCP&L issued $250.0 million of 5.85%
          unsecured Senior Notes, maturing in 2017.  As a result of amortizing
          the gain recognized in OCI on KCP&L’s 2006 Forward Starting Swaps (FSS), the
          effective interest rate on KCP&L’s 5.85% Senior Notes is 5.72%.
  During
          September 2007, Great Plains Energy issued $100.0 million of 6.875% unsecured
          Senior Notes, maturing in 2017.  As a result of amortizing the loss
          recognized in OCI on Great Plains Energy’s 2007 T-Locks, the effective interest
          rate on Great Plains Energy’s 6.875% Senior Notes is 7.33%.
  **EIRR
          Bonds Classified as Current Liabilities**
 KCP&L
          classified its 4.75% Series 1998 A, B and D EIRR bonds with maturity dates
          of
          2015 and 2017 as current liabilities at September 30, 2007 and December
          31,
          2006.  The cash proceeds of $146.5 million from KCP&L’s unsecured
          EIRR Bonds Series 2007A and 2007B issued during the third quarter of 2007
          were
          used to repay the 4.75% Series 1998 A, B and D EIRR bonds on October 1,
          2007.
  30
 The
          EIRR
          Bonds Series 2007A and 2007B are covered by a municipal bond insurance
          policy
          issued by Financial Guaranty Insurance Company (FGIC).  The insurance
          agreement between KCP&L and FGIC provides for reimbursement by KCP&L for
          any amounts that FGIC pays under the municipal bond insurance
          policy.  The insurance policy is in effect for the term of the
          bonds.  The policy also restricts the amount of secured debt KCP&L
          may issue.  In the event that KCP&L issues debt secured by liens
          not permitted by the agreement, KCP&L is required to issue and deliver to
          FGIC first mortgage bonds or similar securities equal in principal amount
          to the
          principal amount of the EIRR Bonds Series 2007A and 2007B then
          outstanding.
  **Amortization
          of Debt Expense**
 Great
          Plains Energy’s and consolidated KCP&L’s amortization of debt expense is
          detailed in the following table.
 **Three
                  Months Ended**
              
              **Year
                  to Date****September
                  30**
              
              **September
                  30****2007**
              
              
              
              **2006**
              
              
              **2007**
              
              
              
              **2006**(millions)Consolidated
                  KCP&L
              
              $
              0.5
              
              
              
              $
              0.5
              
              
              $
              1.3
              
              
              
              $
              1.5Other
                  Great Plains Energy
              
              
              0.1
              
              
              
              
              0.2
              
              
              
              0.8
              
              
              
              
              0.5Total
                  Great Plains Energy
              
              $
              0.6
              
              
              
              $
              0.7
              
              
              $
              2.1
              
              
              
              $
              2.0
 **9.**
                **COMMON
                    SHAREHOLDERS’ EQUITY**
  In
          2006,
          Great Plains Energy entered into a forward sale agreement with Merrill
          Lynch
          Financial Markets, Inc. (forward purchaser) for 1.8 million shares of Great
          Plains Energy common stock.  In April 2007, Great Plains Energy
          elected to terminate the forward sale agreement and settle it in
          cash.  Based on the difference between Great Plains Energy’s average
          stock price of $32.60 over the period used to determine the settlement
          and the
          then-applicable forward price of $25.58, Great Plains Energy paid $12.3
          million
          to Merrill Lynch Financial Markets, Inc.
  Great
          Plains Energy made a capital contribution to KCP&L of $94.0 million in the
          third quarter of 2007.  This contribution was used by KCP&L to
          repay a portion of its outstanding commercial paper.
  **10.**
                **PENSION
                    PLANS AND OTHER EMPLOYEE
                    BENEFITS**
  The
          Company maintains defined benefit pension plans for substantially all employees,
          including officers, of KCP&L, Services and WCNOC.  Pension
          benefits under these plans reflect the employees’ compensation, years of service
          and age at retirement.  The market value of plan assets is determined
          using a five-year average of assets.
  Pension
          expense for KCP&L is recorded in accordance with rate orders from the MPSC
          and KCC that allow KCP&L to record the difference between pension costs
          under SFAS No. 87, “Employers Accounting for Pensions,” and pension costs for
          ratemaking to be recognized as a regulatory asset or liability.
  Effective
          January 1, 2008, the Company is amending the defined benefit pension plan
          for
          management employees (other than WCNOC employees) to allow current employees
          the
          option to remain in the existing program or to choose a new retirement
          program
          which will provide, among other things, an enhanced benefit under the employee
          savings plan and a lower benefit accrual rate under the defined pension
          benefit
          plan.  Employees hired after September 1, 2007, will be placed in the
          new retirement program.
  31
 In
          addition to providing pension benefits, the Company provides certain
          post-retirement health care and life insurance benefits for substantially
          all
          retired employees of KCP&L, Services and WCNOC.  The cost of
          post-retirement benefits charged to KCP&L is accrued during an employee's
          years of service and recovered through rates.
  The
          following table provides the components of net periodic benefit costs prior
          to
          the effect of capitalization and sharing with joint-owners of power
          plants.
 **Pension
                  Benefits**
              
              
              **Other
                  Benefits****Three
                  Months Ended September 30**
              
              **2007**
              
              
              **2006**
              
              
              **2007**
              
              
              **2006****Components
                  of net periodic benefit cost**
              
              (millions)Service
                  cost
              
              $
              4.6
              
              
              $
              4.7
              
              
              $
              0.3
              
              
              $
              0.3Interest
                  cost
              
              
              7.5
              
              
              
              7.8
              
              
              
              1.0
              
              
              
              0.7Expected
                  return on plan assets
              
              
              (7.4
              )
              
              
              (8.1
              )
              
              
              (0.1
              )
              
              
              (0.1
              )Prior
                  service cost
              
              
              1.1
              
              
              
              1.0
              
              
              
              0.7
              
              
              
              -Recognized
                  net actuarial loss
              
              
              8.8
              
              
              
              7.9
              
              
              
              0.1
              
              
              
              0.2Transition
                  obligation
              
              
              -
              
              
              
              -
              
              
              
              0.3
              
              
              
              0.3Settlement
                  charge
              
              
              -
              
              
              
              2.0
              
              
              
              -
              
              
              
              -Net
                  periodic benefit cost beforeregulatory
                  adjustment
              
              
              14.6
              
              
              
              15.3
              
              
              
              2.3
              
              
              
              1.4Regulatory
                  adjustment
              
              
              (2.1
              )
              
              
              (7.6
              )
              
              
              -
              
              
              
              -Net
                  periodic benefit cost
              
              $
              12.5
              
              
              $
              7.7
              
              
              $
              2.3
              
              
              $
              1.4
 **Pension
                  Benefits**
              
              
              **Other
                  Benefits****Year
                  to Date September 30**
              
              **2007**
              
              
              **2006**
              
              
              **2007**
              
              
              **2006****Components
                  of net periodic benefit cost**
              
              (millions)Service
                  cost
              
              $
              13.8
              
              
              $
              14.1
              
              
              $
              0.8
              
              
              $
              0.7Interest
                  cost
              
              
              22.4
              
              
              
              23.2
              
              
              
              2.8
              
              
              
              2.2Expected
                  return on plan assets
              
              
              (22.2
              )
              
              
              (24.5
              )
              
              
              (0.5
              )
              
              
              (0.4
              )Prior
                  service cost
              
              
              3.3
              
              
              
              3.2
              
              
              
              1.4
              
              
              
              0.1Recognized
                  net actuarial loss
              
              
              26.5
              
              
              
              23.9
              
              
              
              0.4
              
              
              
              0.6Transition
                  obligation
              
              
              -
              
              
              
              -
              
              
              
              0.9
              
              
              
              0.9Settlement
                  and termination charge
              
              
              -
              
              
              
              9.5
              
              
              
              0.3
              
              
              
              -Net
                  periodic benefit cost beforeregulatory
                  adjustment
              
              
              43.8
              
              
              
              49.4
              
              
              
              6.1
              
              
              
              4.1Regulatory
                  adjustment
              
              
              (6.3
              )
              
              
              (22.9
              )
              
              
              -
              
              
              
              -Net
                  periodic benefit cost
              
              $
              37.5
              
              
              $
              26.5
              
              
              $
              6.1
              
              
              $
              4.1
 **11.**
                **EQUITY
                    COMPENSATION**
  Great
          Plains Energy’s Long-Term Incentive Plan is an equity compensation plan approved
          by Great Plains Energy’s shareholders.  KCP&L does not have an
          equity compensation plan; however, KCP&L officers participate in Great
          Plains Energy’s Long-Term Incentive Plan.  The Long-Term Incentive
          Plan permits the grant of restricted stock, stock options, limited stock
          appreciation rights and performance shares to officers and other employees
          of
          the Company and its subsidiaries.  Forfeiture rates are based on
          historical forfeitures and future expectations and are reevaluated
          annually.
 32
 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 Date****September
                  30**
              
              **September
                  30****2007**
              
              **2006**
              
              **2007**
              
              **2006****Compensation
                  expense**
              
              (millions)Great
                  Plains Energy
              
              $  2.1
              
              $  1.2
              
              $  4.7
              
              $  2.9KCP&L
              
              1.4
              
              0.7
              
              3.1
              
              1.8**Income
                  tax benefits**Great
                  Plains Energy
              
              0.8
              
              0.4
              
              1.8
              
              0.8KCP&L
              
              0.6
              
              0.2
              
              1.2
              
              0.5
 **Performance
          Shares**
 Performance
          share activity year to date September 30, 2007, is summarized in the following
          table.  Performance adjustment represents the number of performance
          shares ultimately paid that can vary from the number of shares initially
          granted
          depending on Company performance, based on internal and external measures,
          over
          stated performance periods.
 **Grant
                  Date****Performance**
              
              **Shares**
              
              **Fair
                  Value***Beginning
                  balance
              
              
              254,771
              
              
              $
              29.56Performance
                  adjustment
              
              
              (22,070
              )Granted
              
              
              123,542
              
              
              
              32.00Issued
              
              
              (42,169
              )
              
              
              30.27Forfeited
              
              
              (4,385
              )
              
              
              32.35Ending
                  balance
              
              
              309,689
              
              
              
              30.34*  weighted-average
 At
          September 30, 2007, the remaining weighted-average contractual term was
          1.4
          years.  No performance shares were granted during the three months
          ended September 30, 2007 and 2006.  The weighted-average grant-date
          fair value of shares granted was $32.00 and $28.20 year to date September
          30,
          2007 and 2006, respectively.  At September 30, 2007, there was $4.1
          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. 
No shares of common stock related to performance shares were issued during
          the
          three months ended September 30, 2007 and 2006.  The total fair value
          of shares of common stock related to performance shares issued year to
          date
          September 30, 2007 and 2006 was $1.3 million and $0.3 million,
          respectively.
  33
 **Restricted
          Stock**
 Restricted
          stock activity year to date September 30, 2007, is summarized in the following
          table.
 **Nonvested**
              
              
              
              
              **Grant
                  Date****Restricted
                  stock**
              
              **Shares**
              
              
              **Fair
                  Value***Beginning
                  balance
              
              
              140,603
              
              
              $
              29.75Granted
                  and issued
              
              
              348,527
              
              
              
              31.93Vested
              
              
              (11,000
              )
              
              
              30.01Forfeited
              
              
              (5,842
              )
              
              
              31.40Ending
                  balance
              
              
              472,288
              
              
              
              31.33*  weighted-average
 At
          September 30, 2007, the remaining weighted-average contractual term was
          1.6
          years.  The weighted-average grant-date fair value of shares granted
          for the three months ended and year to date September 30, 2007, was $27.76
          and
          $31.93, respectively.  No restricted shares were granted during the
          three months ended September 30, 2006, and the weighted-average grant-date
          fair
          value of shares granted year to date September 30, 2006, was
          $28.22.  As of September 30, 2007, there was $8.4 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 was insignificant
          and
          $0.3 million year to date September 30, 2007.  No shares vested during
          the same periods in 2006.
 
 **12.**
                **TAXES**
  Components
          of income tax expense (benefit) are detailed in the following
          tables.
 **Three
                  Months Ended**
              
              
              **Year
                  to Date****September
                  30**
              
              
              **September
                  30****As
                  Adjusted**
              
              
              
              **As
                  Adjusted****Great
                  Plains Energy**
              
              **2007**
              
              
              **2006**
              
              
              **2007**
              
              
              **2006**Current
                  income taxes
              
              (millions)Federal
              
              $
              15.9
              
              
              $
              38.3
              
              
              $
              22.0
              
              
              $
              67.6State
              
              
              4.4
              
              
              
              2.9
              
              
              
              4.4
              
              
              
              4.3Total
              
              
              20.3
              
              
              
              41.2
              
              
              
              26.4
              
              
              
              71.9Deferred
                  income taxesFederal
              
              
              5.8
              
              
              
              (11.6
              )
              
              
              19.1
              
              
              
              (25.3
              )State
              
              
              (2.2
              )
              
              
              (1.8
              )
              
              
              1.7
              
              
              
              (6.0
              )Total
              
              
              3.6
              
              
              
              (13.4
              )
              
              
              20.8
              
              
              
              (31.3
              )Investment
                  tax credit amortization
              
              
              (0.4
              )
              
              
              (0.8
              )
              
              
              (1.1
              )
              
              
              (2.3
              )Total
              
              $
              23.5
              
              
              $
              27.0
              
              
              $
              46.1
              
              
              $
              38.3
 
  34
 **Three
                  Months Ended**
              
              
              **Year
                  to Date****September
                  30**
              
              
              **September
                  30****As
                  Adjusted**
              
              
              
              **As
                  Adjusted****Consolidated
                  KCP&L**
              
              **2007**
              
              
              **2006**
              
              
              **2007**
              
              
              **2006**Current
                  income taxes
              
              (millions)Federal
              
              $
              13.8
              
              
              $
              36.5
              
              
              $
              25.2
              
              
              $
              60.0State
              
              
              2.4
              
              
              
              4.6
              
              
              
              4.7
              
              
              
              7.3Total
              
              
              16.2
              
              
              
              41.1
              
              
              
              29.9
              
              
              
              67.3Deferred
                  income taxesFederal
              
              
              15.9
              
              
              
              (0.5
              )
              
              
              15.1
              
              
              
              (1.4
              )State
              
              
              1.8
              
              
              
              -
              
              
              
              1.8
              
              
              
              (0.1
              )Total
              
              
              17.7
              
              
              
              (0.5
              )
              
              
              16.9
              
              
              
              (1.5
              )Investment
                  tax credit amortization
              
              
              (0.4
              )
              
              
              (0.8
              )
              
              
              (1.1
              )
              
              
              (2.3
              )Total
              
              $
              33.5
              
              
              $
              39.8
              
              
              $
              45.7
              
              
              $
              63.5
 **Income
          Tax Expense (Benefit) and Effective Income Tax Rates**
 Income
          tax expense and the effective income tax rates reflected in the financial
          statements and the reasons for their differences from the statutory federal
          rates are detailed in the following tables.
 **Income
                  Tax Expense**
              
              
              **Income
                  Tax Rate****Great
                  Plains Energy**
              
              
              
              **As
                  Adjusted**
              
              
              
              **As
                  Adjusted****Three
                  Months Ended September 30**
              
              **2007**
              
              **2006**
              
              **2007**
              
              **2006**(millions)Federal
                  statutory income tax
              
              $
              29.9
              
              
              $
              29.0
              
              
              
              35.0
              %
              
              
              35.0
              %Differences
                  between book and taxdepreciation
                  not normalized
              
              
              0.8
              
              
              
              0.2
              
              
              
              0.9
              
              
              
              0.2Amortization
                  of investment tax credits
              
              
              (0.4
              )
              
              
              (0.8
              )
              
              
              (0.4
              )
              
              
              (0.9
              )Federal
                  income tax credits
              
              
              (3.1
              )
              
              
              (2.1
              )
              
              
              (3.7
              )
              
              
              (2.5
              )State
                  income taxes
              
              
              1.7
              
              
              
              0.9
              
              
              
              2.0
              
              
              
              1.0Changes
                  in uncertain tax positions, net
              
              
              -
              
              
              
              0.1
              
              
              
              0.1
              
              
              
              0.2Aquila
                  transaction costs
              
              
              (2.9
              )
              
              
              -
              
              
              
              (3.4
              )
              
              
              -Other
              
              
              (2.5
              )
              
              
              (0.3
              )
              
              
              (3.2
              )
              
              
              (0.5
              )Total
              
              $
              23.5
              
              
              $
              27.0
              
              
              
              27.3
              %
              
              
              32.5
              %
 **Income
                  Tax Expense**
              
              
              **Income
                  Tax Rate****Great
                  Plains Energy**
              
              
              
              **As
                Adjusted**
              
              
              
              **As
                  Adjusted****Year
                  to Date September 30**
              
              **2007**
              
              
              **2006**
              
              
              **2007**
              
              
              **2006**(millions)Federal
                  statutory income tax
              
              $
              55.0
              
              
              $
              46.0
              
              
              
              35.0
              %
              
              
              35.0
              %Differences
                  between book and taxdepreciation
                  not normalized
              
              
              2.5
              
              
              
              0.9
              
              
              
              1.6
              
              
              
              0.7Amortization
                  of investment tax credits
              
              
              (1.1
              )
              
              
              (2.3
              )
              
              
              (0.7
              )
              
              
              (1.7
              )Federal
                  income tax credits
              
              
              (6.9
              )
              
              
              (4.5
              )
              
              
              (4.4
              )
              
              
              (3.4
              )State
                  income taxes
              
              
              3.9
              
              
              
              -
              
              
              
              2.5
              
              
              
              (0.1
              )Changes
                  in uncertain tax positions, net
              
              
              0.2
              
              
              
              0.2
              
              
              
              0.1
              
              
              
              0.1Aquila
                  transaction costs
              
              
              (2.9
              )
              
              
              -
              
              
              
              (1.8
              )
              
              
              -Other
              
              
              (4.6
              )
              
              
              (2.0
              )
              
              
              (3.0
              )
              
              
              (1.5
              )Total
              
              $
              46.1
              
              
              $
              38.3
              
              
              
              29.3
              %
              
              
              29.1
              %
 
  35
 **Income
                  Tax Expense**
              
              
              **Income
                  Tax Rate****Consolidated
                  KCP&L**
              
              
              
              **As
                  Adjusted**
              
              
              
              **As
                  Adjusted****Three
                  Months Ended September 30**
              
              **2007**
              
              
              **2006**
              
              
              **2007**
              
              
              **2006**(millions)Federal
                  statutory income tax
              
              $
              38.6
              
              
              $
              38.3
              
              
              
              35.0
              %
              
              
              35.0
              %Differences
                  between book and taxdepreciation
                  not normalized
              
              
              0.8
              
              
              
              0.2
              
              
              
              0.7
              
              
              
              0.2Federal
                  income tax credits
              
              
              (2.6
              )
              
              
              (0.9
              )
              
              
              (2.3
              )
              
              
              (0.8
              )Amortization
                  of investment tax credits
              
              
              (0.4
              )
              
              
              (0.8
              )
              
              
              (0.3
              )
              
              
              (0.7
              )State
                  income taxes
              
              
              3.3
              
              
              
              3.0
              
              
              
              3.0
              
              
              
              2.7Changes
                  in uncertain tax positions, net
              
              
              (0.3
              )
              
              
              0.1
              
              
              
              (0.2
              )
              
              
              0.1Parent
                  company tax benefits
              
              
              (4.4
              )
              
              
              (1.1
              )
              
              
              (4.0
              )
              
              
              (1.0
              )Other
              
              
              (1.5
              )
              
              
              1.0
              
              
              
              (1.5
              )
              
              
              0.9Total
              
              $
              33.5
              
              
              $
              39.8
              
              
              
              30.4
              %
              
              
              36.4
              %
 **Income
                  Tax Expense**
              
              
              **Income
                  Tax Rate****Consolidated
                  KCP&L**
              
              
              
              **As
                  Adjusted**
              
              
              
              **As
                  Adjusted****Year
                  to Date September 30**
              
              **2007**
              
              
              **2006**
              
              
              **2007**
              
              
              **2006**(millions)Federal
                  statutory income tax
              
              $
              56.3
              
              
              $
              63.9
              
              
              
              35.0
              %
              
              
              35.0
              %Differences
                  between book and taxdepreciation
                  not normalized
              
              
              2.5
              
              
              
              0.9
              
              
              
              1.6
              
              
              
              0.5Federal
                  income tax credits
              
              
              (5.7
              )
              
              
              (0.9
              )
              
              
              (3.5
              )
              
              
              (0.5
              )Amortization
                  of investment tax credits
              
              
              (1.1
              )
              
              
              (2.3
              )
              
              
              (0.7
              )
              
              
              (1.3
              )State
                  income taxes
              
              
              4.6
              
              
              
              4.7
              
              
              
              2.9
              
              
              
              2.6Changes
                  in uncertain tax positions, net
              
              
              (0.1
              )
              
              
              0.6
              
              
              
              (0.1
              )
              
              
              0.3Parent
                  company tax benefits
              
              
              (7.6
              )
              
              
              (3.3
              )
              
              
              (4.7
              )
              
              
              (1.8
              )Other
              
              
              (3.2
              )
              
              
              (0.1
              )
              
              
              (2.1
              )
              
              
              -Total
              
              $
              45.7
              
              
              $
              63.5
              
              
              
              28.4
              %
              
              
              34.8
              %
 **Uncertain
        Tax Positions**
 In
          2006,
          the FASB issued FASB Interpretation (FIN) No. 48, “Accounting for Uncertainty in
          Income Taxes,” an interpretation of SFAS No. 109, “Accounting for Income
          Taxes.”  FIN No. 48 establishes a “more-likely-than-not” recognition
          threshold that must be met before a tax benefit can be recognized in the
          financial statements with various additional disclosures required and is
          effective for fiscal years beginning after December 15, 2006.  Upon
          adoption of FIN No. 48 on January 1, 2007, Great Plains Energy recognized
          an
          $18.8 million increase in the liability for unrecognized tax
          benefits.  This increase was offset by a $0.9 million decrease to the
          January 1, 2007, balance of retained earnings, a $17.9 million decrease
          in
          deferred taxes, a $4.0 million decrease in accrued taxes and a $4.0 million
          increase in accrued interest.  The total amount of unrecognized tax
          benefits at January 1, 2007, was $23.5 million of which $3.5 million would
          impact the effective tax rate, if recognized.  Consolidated KCP&L
          recognized a $19.8 million increase in the liability for unrecognized tax
          benefits.  This increase was offset by a $0.2 million decrease to the
          January 1, 2007, balance of retained earnings, a $15.7 million decrease
          in
          deferred taxes and a $3.9 million decrease in accrued taxes.  The
          total amount of unrecognized tax benefits at January 1, 2007, was $21.6
          million
          of which $1.6 million would impact the effective tax rate, if
          recognized.
  In
          addition with the adoption of FIN No. 48, Great Plains Energy and consolidated
          KCP&L elected to make an accounting policy change to recognize interest
          accrued related to unrecognized tax benefits in interest expense and penalties
          in non-operating expenses.  As of the date of adoption, Great Plains
          Energy and consolidated KCP&L had $6.4 million and $2.4 million,
          respectively, accrued for the
 36
 payment
          of interest.  No amounts were accrued for penalties with respect to
          unrecognized tax benefits.  At September 30, 2007, Great Plains Energy
          and consolidated KCP&L had $7.8 million and $3.0 million, respectively,
          accrued for the payment of interest.
  Subsequent
          to adoption, Great Plains Energy filed amended returns based on research
          and
          development tax credit studies completed for the 2000 through 2004 tax
          years.  This resulted in a release of unrecognized tax benefits of
          $2.2 million for both Great Plains Energy and consolidated
          KCP&L.  At September 30, 2007, the total amount of uncertain tax
          benefits for Great Plains Energy and consolidated KCP&L was $21.6 million
          and $19.5 million, respectively.
  Great
          Plains Energy files a consolidated federal income tax return as well as
          unitary
          and combined income tax returns in several state jurisdictions with Kansas
          and
          Missouri being the most significant.  Great Plains Energy and its
          subsidiaries have completed examinations by federal and state taxing authorities
          for taxable years prior to 2000; however several tax issues remain unresolved
          for tax years 2000 through 2003.  During 2006, the IRS commenced an
          audit of Great Plains Energy and its subsidiaries for taxable years 2004
          through
          2005 and is expected to complete the audit by the end of 2008.
  It
          is
          reasonably possible that, as a result of a settlement agreement for the
          federal
          audit of the 2000 through 2003 tax years expected to be reached by September
          2008, federal and state unrecognized tax benefits related primarily to
          the
          timing of tax deductions would be recognized by Great Plains Energy and
          consolidated KCP&L, as well as reversal of accrued interest for the relevant
          tax years.  As of the date of adoption, an estimate of the range of
          the reasonably possible recognition of unrecognized tax benefits, net of
          reversal of accrued interest, was $5 million to $7 million for Great Plains
          Energy and $7 million to $9 million for consolidated KCP&L.  At
          September 30, 2007, an estimate of the range of the reasonably possible
          recognition of unrecognized tax benefits, net of reversal of accrued interest,
          is $3 million to $5 million for Great Plains Energy and $6 million to $8
          million
          for consolidated KCP&L.
  **13.**
                **RELATED
                    PARTY TRANSACTIONS AND
                    RELATIONSHIPS**
  Consolidated
          KCP&L receives various support and administrative services from
          Services.  These services are billed to consolidated KCP&L at
          cost, based on payroll and other expenses, incurred by Services for the
          benefit
          of consolidated KCP&L.  These costs totaled $3.6 million and $11.4
          million for the three months ended and year to date September 30, 2007,
          respectively, and $4.6 million and $14.1 million for the same periods in
          2006.  These costs consisted primarily of employee compensation,
          benefits and fees associated with various professional services.  At
          September 30, 2007, and December 31, 2006, consolidated KCP&L had a
          short-term intercompany payable to Services of $1.2 million and $2.5 million,
          respectively.  Also at September 30, 2007, and December 31, 2006,
          consolidated KCP&L had a long-term intercompany payable to Services of $5.9
          million and $5.7 million, respectively, related to unrecognized pension
          expense.  At September 30, 2007, and December 31, 2006, consolidated
          KCP&L’s balance sheets reflect a note payable from HSS to Great Plains
          Energy of $0.6 million.
 
 37
 **14.**
                **COMMITMENTS
                    AND CONTINGENCIES**
  **Environmental
          Matters**
 The
          Company is subject to regulation by federal, state and local authorities
          with
          regard to air quality and other environmental matters primarily through
          KCP&L’s operations.  The generation, transmission and distribution
          of electricity produces and requires disposal of certain hazardous products
          that
          are subject to these laws and regulations.  In addition to imposing
          continuing compliance obligations, these laws and regulations authorize
          the
          imposition of substantial penalties for noncompliance, including fines,
          injunctive relief and other sanctions.  Failure to comply with these
          laws and regulations could have a material adverse effect on consolidated
          KCP&L and Great Plains Energy.
  KCP&L
          seeks to use current environmental technology.  KCP&L conducts
          environmental audits designed to ensure compliance with governmental
          regulations.  At September 30, 2007, and December 31, 2006, KCP&L
          had $0.3 million accrued for environmental remediation expenses.  The
          accrual covers water monitoring at one site.  The amounts accrued were
          established on an undiscounted basis and KCP&L does not currently have an
          estimated time frame over which the accrued amounts may be paid.
  Environmental-related
          legislation is continually introduced in Congress.  Such legislation
          typically includes various compliance dates and compliance limits.  It
          is possible that legislation could be enacted at the federal or state level
          to
          address global climate change, including efforts to reduce and control
          the
          emission of greenhouse gases, such as CO2,
          which is created in the combustion of fossil fuels.  In addition,
          there could be national and state mandates to produce a set percentage
          of
          electricity from renewable forms of energy, such as wind.  The
          probability and impact of such legislation cannot be reasonably estimated
          at
          this time, including the cost to install new pollution control equipment
          to
          achieve compliance, but such legislation could have the potential for a
          significant financial impact on KCP&L.  KCP&L would seek
          recovery of capital costs and expenses for such compliance through rate
          increases; however, there can be no assurance that such rate increases
          would be
          granted.  KCP&L will continue to monitor proposed
          legislation.
  The
          Clean
          Air Act requires companies to obtain permits and, if necessary, install
          control
          equipment to reduce emissions when making a major modification or a change
          in
          operation if either is expected to cause a significant net increase in
          regulated
          emissions.  The Sierra Club and Concerned Citizens of Platte County
          have claimed that modifications were made to Iatan No. 1 in violation of
          Clean
          Air Act regulations.  Although KCP&L has entered into a
          Collaboration Agreement with those parties that provides, among other things,
          for the release of such claims, the Collaboration Agreement does not bind
          any
          other entity.  KCP&L is aware of subpoenas issued by a Federal
          grand jury to certain third parties seeking documents relating to capital
          projects at Iatan No. 1.  KCP&L has not received a subpoena, and
          has not been informed of the scope of the grand jury
          inquiry.  KCP&L believes that it is in compliance with all
          relevant laws and regulations; however, the ultimate outcome of these grand
          jury
          activities cannot presently be determined, nor can the costs and other
          liabilities that could potentially result from a negative outcome presently
          be
          reasonably estimated.  There is no assurance these costs, if any,
          could be recovered in rates.
  The
          following table contains current estimates of KCP&L’s capital expenditures
          (exclusive of allowance for funds used during construction and property
          taxes)
          to comply with environmental laws and regulations described below, including
          accelerated environmental upgrade expenditures outlined in KCP&L’s
          Comprehensive Energy Plan.  The ultimate cost could be significantly
          different from the amounts estimated.  The demand for environmental
          projects among utilities in the United States continues to present upward
          pressure on pricing and lead times for environmental control
          equipment.  KCP&L has obtained contracts to date for approximately
          84% of the estimated direct costs of its Iatan No. 1 environmental project,
          which has enabled KCP&L to refine the cost estimate of this
          project.  Additionally, the impact of the current pricing pressure is
          relatively less on this project than on other
 38
 environmental
          projects where contracts have not been awarded yet.  KCP&L has
          also developed more detailed project definition and cost estimates for
          the
          LaCygne Station environmental projects, reflecting increases in both project
          scope and prices.  The developments regarding these two projects are
          the primary drivers of the increases in the estimated environmental expenditure
          ranges from what was disclosed in Great Plains Energy’s and consolidated
          KCP&L’s 2006 Form 10-K and Form 10-Q for the second quarter of
          2007.  KCP&L continues to refine its cost estimates detailed in
          the table below and explore alternatives.  The allocation between
          states is based on location of the facilities and has no bearing as to
          recovery
          in jurisdictional rates.
  The
          table
          does not reflect potential costs relating to additional wind generation,
          energy
          efficiency and other CO2
          emission offsets contemplated by the Collaboration Agreement among KCP&L,
          Sierra Club and Concerned Citizens of Platte County.  Potential costs
          relating to the additional wind generation and energy efficiency investments
          that are subject to regulatory approval cannot be reasonably estimated
          at this
          time.  As well, the potential costs relating to the additional offset
          of approximately 711,000 tons of CO2
          emissions under the Collaboration Agreement cannot be reasonably estimated
          at
          this time.  KCP&L will evaluate the available operational and
          capital resource alternatives, and will select the most cost-effective
          mix of
          actions to achieve this additional offset.  The potential capital
          costs of the Collaboration Agreement provisions relating to emission limits
          at
          Iatan and LaCygne generating stations are within the overall estimated
          capital
          cost ranges disclosed below.  KCP&L expects to seek recovery of
          the costs associated with the Collaboration Agreement through rate increases;
          however, there can be no assurance that such rate increases would be
          granted.
 **Clean
                  Air Estimated Required****Environmental
                  Expenditures (a)**
              
              **Missouri**
              **Kansas**
              **Total**(millions)CAIR
              
              $426
              -
              1,020
              $
              -
              
              $426
              -
              1,020
              (b)Incremental
                  BART
              
              
              -
              
              538
              -
              657
              538
              -
              657
              (c)Incremental
                  CAMR
              
              11
              -
              15
              5
              -
              6
              16
              -
              21Estimated
                  required environmental expenditures
              
              $437
              -
              1,035
              $543
              -
              663
              $980
              -
              1,698(a)
              The
                  amounts reflect KCP&L's portion of the cost of projects at
                  jointly-owned units.(b)
              Reflects
                  an estimated $275 million to $287 million associated with the Iatan
                  No. 1
                  environmental project included in the Comprehensive Energy
                  Plan.(c)
              Reflects
                  an estimated $261 million to $318 million associated with the LaCygne
                  No.
                  1 baghouse and scrubber project included in the Comprehensive Energy
                  Plan.
 The
          table
          above has been adjusted from what was disclosed in Great Plains Energy’s and
          consolidated KCP&L’s 2006 Form 10-K to remove approximately $41 million for
          the first phase of environmental upgrades at LaCygne No. 1, installation
          of
          selective catalytic reduction equipment, which was completed and placed
          into
          service during the second quarter of 2007.  The table has not been
          adjusted for other environmental expenditures since 2006 of approximately
          $75
          million related to the projects contemplated in the table above.
  ***Clean
          Air Interstate Rule***
 The
          Environmental Protection Agency (EPA) Clean Air Interstate Rule (CAIR)
          requires
          reductions in SO2 and
          NOx emissions
          in 28
          states, including Missouri.  The reduction in both SO2 and
          NOx emissions
          will be
          accomplished through establishment of permanent statewide caps for NOx effective
          January 1, 2009, and SO2 effective
          January 1, 2010.  More restrictive caps will be effective
          January 1, 2015.  KCP&L’s fossil fuel-fired plants located in
          Missouri are subject to CAIR, while its fossil fuel-fired plants in Kansas
          are
          not.
 39
 KCP&L
          expects to meet the emissions reductions required by CAIR at its Missouri
          plants
          through a combination of pollution control capital projects and the purchase
          of
          emission allowances in the open market as needed.  The final CAIR rule
          establishes a market-based cap-and-trade program.  Missouri has
          approved a State Implementation Plan (SIP), which includes an emission
          allowance
          allocation mechanism, and in September 2007, EPA published its approval
          of the
          SIP in the Federal Register.  Facilities will demonstrate compliance
          with CAIR by holding sufficient allowances for each ton of SO2 and
          NOx emitted
          in any given
          year, with SO2
          emission allowances transferable among all regulated facilities nationwide
          and
          NOx emission
          allowances transferable among all regulated facilities within the 28 CAIR
          states.  KCP&L will also be allowed to utilize unused SO2 emission
          allowances
          that it has accumulated during previous years of the Acid Rain Program
          to meet
          the more stringent CAIR requirements.  At September 30, 2007,
          KCP&L had accumulated unused SO2 emission
          allowances
          sufficient to support just over 122,000 tons of SO2
          emissions under the provisions of the Acid Rain program, which are recorded
          in
          inventory at zero cost.  KCP&L is permitted to sell excess SO2 emission
          allowances
          in accordance with KCP&L’s Comprehensive Energy Plan as approved by the MPSC
          and KCC and in October 2007, KCP&L sold 25,000 SO2 emission
          allowances.
  Analysis
          of the final CAIR rule indicates that NOx and
          SO2 control
          may be
          required for KCP&L’s Montrose Station in Missouri, in addition to the
          environmental upgrades at Iatan No. 1 included in the Comprehensive Energy
          Plan.  The timing and necessity of the installation of such control
          equipment is currently being developed, and as required by the Collaboration
          Agreement with Sierra Club and Concerned Citizens of Platte County, a study
          will
          be completed in 2008 to assess potential future use of Montrose Station,
          including without limitation, retiring, re-powering and upgrading the
          units.  As discussed below, some of the control technology for SO2 and
          NOx will
          also aid in the
          control of mercury.
  ***Best
          Available Retrofit Technology Rule***
 The
          EPA
          best available retrofit technology rule (BART) directs state air quality
          agencies to identify whether visibility-reducing emissions from sources
          subject
          to BART are below limits set by the state or whether retrofit measures
          are
          needed to reduce emissions.  BART applies to specific eligible
          facilities including LaCygne Nos. 1 and 2 in Kansas and Iatan No. 1 and
          Montrose
          No. 3 in Missouri.  The CAIR suggests that states that meet the CAIR
          requirements through installation of environmental control equipment may
          also
          meet BART requirements for individual sources.  Missouri has included
          this understanding as part of its CAIR SIP.  Depending on the timing
          of installation of environmental control equipment and the availability
          of
          SO2
          emission allowances, the estimated required environmental expenditures
          presented
          in the table above could shift from CAIR to incremental BART for
          Missouri.   Kansas is not a CAIR state and therefore BART will
          impact LaCygne Nos. 1 and 2.  KCP&L is in discussions with the
          Kansas Department of Health and Environment (KDHE) regarding a Regional
          Haze
          (also referred to as BART) Agreement that will become part of the Kansas
          Regional Haze State Implementation Plan.  States must submit a BART
          implementation plan in 2007.  In the Collaboration Agreement with
          Sierra Club and Concerned Citizens of Platte County, KCP&L agreed to seek,
          through the BART regulation process, a consent agreement with the KDHE
          incorporating limits for stack particulate matter emissions, as well as
          limits
          for NOx
          and SO2
          emissions at its LaCygne Station that will be below the presumptive limits
          under
          BART.  KCP&L further agreed to use its best efforts to install
          emission control technologies to reduce those emissions from the LaCygne
          Station
          prior to the required compliance date under BART, but in no event later
          than
          June 1, 2015.  KCP&L further agreed to issue requests for proposal
          for the equipment required to comply with BART by December 31, 2008, requesting
          that construction commence by December 31, 2010.
  ***Mercury
          Emissions***
 The
          EPA
          Clean Air Mercury Rule (CAMR) regulates mercury emissions from coal-fired
          power
          plants located in 48 states, including Kansas and Missouri, under the New
          Source
          Performance Standards of the Clean Air Act.  The rule established a
          market-based cap-and-trade program that will reduce nationwide utility
          emissions
          of mercury in two phases.  The first phase cap is effective
          January 1, 2010,
 40
 and
          will
          establish a permanent nationwide cap of 38 tons of mercury for coal-fired
          power
          plants.  Management anticipates meeting the first phase cap by taking
          advantage of KCP&L’s mercury reductions achieved through capital
          expenditures to comply with CAIR and BART.  The second phase is
          effective January 1, 2018, and will establish a permanent nationwide cap
          of 15
          tons of mercury for coal-fired power plants.  When fully implemented,
          the rule will reduce utility emissions of mercury by nearly 70% from current
          emissions of 48 tons per year.  Both Missouri and Kansas have approved
          the SIPs implementing the CAMR cap-and-trade program.  In September
          2007, EPA published its approval of the Missouri SIP in the Federal
          Register.  The Kansas SIP is currently being reviewed by
          EPA.
  Facilities
          will be required to hold allowances for each ounce of mercury emitted in
          any
          given year and allowances will be readily transferable among facilities
          nationwide.  Under the cap-and-trade program, KCP&L will be able
          to purchase mercury allowances or elect to install pollution control equipment
          to achieve compliance.  While it is expected that mercury allowances
          will be available in sufficient quantities for purchase in the 2010-2018
          timeframe, the significant reduction in the nationwide cap in 2018 may
          hamper
          KCP&L’s ability to obtain reasonably priced allowances beyond
          2018.  Management expects capital expenditures will be required to
          install additional pollution control equipment to meet the second phase
          cap.  During the ensuing years, management will closely monitor
          advances in technology for removal of mercury from Powder River Basin (PRB)
          coal
          and expects to make decisions regarding second phase removal based on then
          available technology to meet the 2018 compliance date.
  ***Carbon
          Dioxide***
 Many
          bills concerning CO2are being
          debated in the U.S. Congress.  There are
          various compliance dates and nationwide caps stipulated in the
          bills.  The U.S. Supreme Court has determined that the EPA has
          statutory authority to regulate CO2from
          new motor
          vehicles if EPA forms a judgment that such emissions contribute to climate
          change.  If EPA forms such a judgment, it may ultimately regulate
          other sources of CO2, which
          may include
          KCP&L facilities.  In addition, the Secretary of the KDHE stated
          in October 2007, that the KDHE intends to work with various industries
          and
          stakeholders to establish goals for reducing CO2 emissions
          and
          strategies to achieve those goals.  CO2 regulation
          has the
          potential for a significant financial impact on KCP&L in connection with
          achieving compliance with limits that may be established.  However,
          the financial consequences to KCP&L cannot be determined until final
          legislation is passed or regulations enacted.  Management will
          continue to monitor the progress of these bills.  As previously
          discussed, KCP&L has entered into a Collaboration Agreement that includes
          various provisions regarding wind generation, energy efficiency and other
          CO2 emission
          offsets.
  ***Ozone***
 In
          June
          2007, the Missouri Department of Natural Resources (MDNR) and KDHE submitted
          to
          EPA for approval their respective maintenance plans for the control of
          ozone for
          the Kansas City area.  These plans were approved by EPA in July
          2007.  As part of the SIP requirements, contingency control measures
          were included.  These measures would go into effect only if associated
          triggers (such as a violation of the eight-hour ozone standard)
          occur.  It is anticipated the proposed controls for CAIR and BART will
          provide the required contingency control measures at KCP&L’s generation
          facilities.
  In
          June
          2007, monitor data indicated that the Kansas City area violated the eight-hour
          ozone national ambient air quality standard.  The monitor data must be
          quality-assured and provided to EPA before the violation will be confirmed
          and
          for EPA to respond to the violation.  Upon quality assurance of the
          monitoring data, Missouri and Kansas will implement the responses established
          in
          the maintenance plans for control of ozone, upon approval by EPA.  The
          responses in both states do not require additional controls at KCP&L’s
          generation facilities beyond the currently proposed controls for CAIR and
          BART.  EPA has various options over and above the implementation of
          the maintenance plans for control of ozone to address a confirmed
          violation.  These options include, but are not limited to, designating
          the area “non-attainment” and requiring a new regulatory plan to reduce
          emissions or leaving the designation unchanged, but still requiring a new
          regulatory plan.  At this time, management
 41
 is
          unable
          to predict how the EPA will respond or how that response will impact KCP&L’s
          operations, but the EPA’s response could have a significant impact on Great
          Plains Energy's and consolidated KCP&L's results of operations and financial
          position.  Management will continue to monitor the response and be
          involved in any regulatory developments to the extent possible.
  Also
          in
          June 2007, EPA issued a proposal for comment to reduce the existing eight-hour
          ozone national ambient air quality standard.  The proposal recommends
          an ozone standard within a range of 0.07 to 0.075 parts per million
          (ppm).  EPA also is taking comments on alternative standards within a
          range from 0.06 ppm up to the level of the current eight-hour ozone standard,
          which is 0.08 ppm.  The Kansas City area may have difficulty attaining
          a revised standard in the future.  EPA has taken public comments and
          will issue final standards by March 12, 2008.  Although it is
          difficult to determine the ultimate impact of the proposal at this time,
          it
          could have a significant impact on Great Plains Energy's and consolidated
          KCP&L's results of operations and financial position.  Management
          will continue to monitor proposed revisions to the standard.
  ***Sulfuric
          Acid Mist BACT Analysis – Iatan Station***
 As
          a
          requirement of the Iatan Station air permit and the Collaboration Agreement,
          KCP&L submitted a best available control technology (BACT) analysis for
          sulfuric acid mist to MDNR in June 2007.  MDNR will conduct its own
          BACT analysis and determine the final emission limit.  Although
          KCP&L believes the emission limit submitted is a BACT limit and can be
          achieved by the currently proposed emission control equipment, MDNR may
          ultimately determine a BACT limit for sulfuric acid mist that could require
          additional control equipment.  The above Clean Air Estimated Required
          Environmental Expenditures table does not reflect the potential costs for
          additional controls that may be required to meet such a
          determination.  If MDNR does make such a determination, KCP&L will
          evaluate the available operational and capital resource alternatives, and
          will
          select the most cost-effective mix of actions to achieve
          compliance.
  ***Water
          Use Regulations***
 The
          Clean
          Water Act (Act) establishes standards for cooling water intake
          structures.  Section 316(b) of the Act applies to certain existing
          power producing facilities that employ cooling water intake structures
          that
          withdraw 50 million gallons or more per day from lakes and rivers and use
          25% or
          more of that water for cooling purposes.  EPA had previously issued
          regulations that required KCP&L to conduct demonstration studies regarding
          the impact of its generating facilities’ intake structures on aquatic life that
          were expected to cost a total of $1.2 million to $2.0 million.  In
          July 2007, EPA suspended many of those regulations and indicated it will
          consider further rulemaking on this matter.  At this time, management
          is unable to predict how the EPA will respond or how that response will
          impact
          KCP&L’s operations.  Management will monitor any subsequent
          rulemaking.
  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 material adverse effect
          on
          KCP&L.  The outcome could also affect the terms of water permit
          renewals at KCP&L’s Iatan and Montrose Stations.
  **Contractual
          Obligations**
 Great
          Plains Energy’s and consolidated KCP&L’s contractual obligations for
          KCP&L’s Comprehensive Energy Plan were $140.5 million for the remainder of
          2007 and $472.4 million, $135.9 million and $14.0 million for the years
          2008
          through 2010, respectively.  Great Plains Energy’s and consolidated
          KCP&L’s
 42
 other
          contractual obligations have not significantly changed at September 30,
          2007,
          compared to December 31, 2006.
  **15.**
                **LEGAL
                    PROCEEDINGS**
  **Union
          Pacific**
 In
          2005,
          KCP&L filed a rate complaint case with the Surface Transportation Board
          (STB) charging that Union Pacific Railroad Company’s (Union Pacific) rates for
          transporting coal from the PRB in Wyoming to KCP&L’s Montrose Station are
          unreasonably high.  Prior to the end of 2005, the rates were
          established under a contract with Union Pacific.  Efforts to extend
          the term of the contract were unsuccessful and Union Pacific is the only
          service
          for coal transportation from the PRB to Montrose Station.  A
          procedural schedule was issued by the STB in May 2007, and KCP&L and Union
          Pacific submitted reply evidence on August 20, 2007.  Given this
          expedited schedule, the STB has indicated it may issue a final decision
          on this
          rate complaint in the fourth quarter of 2007.  Until the case is
          decided, KCP&L is paying the higher tariff rates subject to
          refund.
  **Hawthorn
          No. 5 Insurance 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,
          and KCP&L was added as a defendant in June 2006.  The case was
          subsequently transferred to, and is pending in, the U.S. District Court
          for the
          Western District of Missouri.  Travelers seeks recovery of $10 million
          that KCP&L recovered through subrogation litigation.  Management
          is unable to predict the outcome of this case.
  **Emergis
          Technologies, Inc.**
 In
          March
          2006, Emergis Technologies, Inc. f/k/a BCE Emergis Technologies, Inc. (Emergis)
          filed suit against KCP&L in Federal District Court for the Western District
          of Missouri, alleging infringement of a patent, entitled “Electronic Invoicing
          and Payment System” and seeking unspecified monetary damages and injunctive
          relief.  This patent relates to automated electronic bill presentment
          and payment systems, particularly those involving Internet billing and
          collection.  In March 2006, KCP&L filed a response and denied
          infringing the patent.  KCP&L counterclaimed for a declaration
          that the patent is invalid and not infringed.  Emergis responded to
          KCP&L’s counterclaims in April 2006.  Court ordered mediation
          occurred in July 2006, but the case was not resolved.  Management does
          not expect the outcome of this case to have a significant impact on Great
          Plains
          Energy's or consolidated KCP&L's results of operations and financial
          position.
  **Spent
          Nuclear Fuel and Radioactive Waste**
 In
          2004,
          KCP&L and the other two Wolf Creek owners filed suit against the United
          States in the U.S. Court of Federal Claims seeking an unspecified amount
          of
          monetary damages resulting from the government’s failure to begin accepting
          spent fuel for disposal in January 1998, as the government was required
          to do by
          the Nuclear Waste Policy Act of 1982.  Approximately sixty other
          similar cases are pending before that court.  A handful of the cases
          have received damages awards, most of which are on appeal now.  The
          Wolf Creek case is on a court-ordered stay until further order of the court
          to
          allow for some of the earlier cases to be decided first by an appellate
          court.  Another Federal 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.  KCP&L management cannot predict the outcome of this
          case.
  43
 **Class
          Action Complaint**
 In
          2005,
          a class action complaint for breach of contract was filed against Strategic
          Energy in the Court of Common Pleas of Allegheny County,
          Pennsylvania.  The plaintiffs purportedly represent the interests of
          certain customers in Pennsylvania who entered intoPower Supply Coordination
          Service Agreements (Agreements) for a certain product in
          Pennsylvania.  The complaint seeks monetary damages alleged to be in
          excess of $25,000, attorney fees and costs and a declaration that the customers
          may terminate their Agreements with Strategic Energy.  In response to
          Strategic Energy’s preliminary objections, plaintiffs filed an amended complaint
          in July 2006, and Strategic Energy filed its preliminary objections in
          July
          2007.  Plaintiff’s counsel agreed to file an additional amended
          complaint in response to Strategic Energy’s preliminary
          objections.  Management is awaiting the amended complaint and is
          unable to predict the outcome of this case.
  **Texas
          Customer Dispute**
 In
          February 2006, a customer in Texas that procures electricity for schools
          notified Strategic Energy that it had selected another provider for its
          school
          members during the time it was under contract with Strategic
          Energy.  Strategic Energy exercised it rights under the agreement for
          breach.  In June 2006, Strategic Energy received a notice of demand
          for arbitration from the customer pursuant to the agreement.  In July
          2007, the parties settled this matter and there was no material impact
          on the
          Company’s financial position or results of operations.
  **Weinstein
          v. KLT Telecom**
 Richard
          D. Weinstein (Weinstein) filed suit against KLT Telecom Inc. (KLT Telecom)
          in
          September 2003 in the St. Louis County, Missouri Circuit Court.  KLT
          Telecom acquired a controlling interest in DTI Holdings, Inc. (Holdings)
          in
          February 2001 through the purchase of approximately two-thirds of the Holdings
          stock held by Weinstein.  In connection with that purchase, KLT
          Telecom entered into a put option in favor of Weinstein, which granted
          Weinstein
          an option to sell to KLT Telecom his remaining shares of Holdings
          stock.  The put option provided for an aggregate exercise price for
          the remaining shares equal to their fair market value with an aggregate
          floor
          amount of $15 million and was exercisable between September 1, 2003, and
          August
          31, 2005.  In June 2003, the stock of Holdings was cancelled and
          extinguished pursuant to the joint Chapter 11 plan confirmed by the Bankruptcy
          Court.  In September 2003, Weinstein delivered a notice of exercise of
          his claimed rights under the put option.  KLT Telecom rejected the
          notice of exercise, and Weinstein filed suit, alleging breach of
          contract.  Weinstein sought damages of at least $15 million, plus
          statutory interest.  In April 2005, summary judgment was granted in
          favor of KLT Telecom, and Weinstein appealed this judgment to the Missouri
          Court
          of Appeals for the Eastern District.  In May 2006, the Court of
          Appeals affirmed the judgment.  In July 2006, Weinstein filed an
          application for transfer of this case to the Missouri Supreme Court, which
          was
          granted.  Oral arguments were presented to the Missouri Supreme Court
          in December 2006.  In May 2007, the Missouri Supreme Court reversed
          the summary judgment and remanded the case to the trial court.  In
          July 2007, Weinstein filed a renewed Motion for Summary Judgment and KLT
          Telecom
          responded in opposition in August 2007.  A hearing on the motion is
          anticipated to occur in the fourth quarter of 2007.  A $15 million
          reserve was recorded in 2001 for this matter.
  **16.**
                **SEGMENTS
                    AND RELATED INFORMATION**
  **Great
          Plains Energy**
 Great
          Plains Energy has two reportable segments based on its method of internal
          reporting, which generally segregates the reportable segments based on
          products
          and services, management responsibility and regulation.  The two
          reportable business segments are KCP&L, an integrated, regulated electric
          utility, and Strategic Energy, a competitive retail electricity
          supplier.  Other includes HSS, Services, all KLT Inc. activity other
          than Strategic Energy, unallocated corporate charges, consolidating entries
          and
          intercompany eliminations.  Intercompany eliminations include
          insignificant amounts of intercompany financing-related
          activities.  The summary of significant accounting policies applies to
          all of the reportable segments.  For segment reporting, each segment’s
          income taxes include
 44
 the
          effects of allocating holding company tax benefits.  Segment
          performance is evaluated based on net income.
  The
          following tables reflect summarized financial information concerning Great
          Plains Energy’s reportable segments.
 
 **Three
                  Months Ended**
              
              
              
              
              **Strategic**
              
              
              
              
              **Great
                  Plains****September
                  30, 2007**
              
              **KCP&L**
              
              **Energy**
              
              **Other**
              
              **Energy**(millions)Operating
                  revenues
              
              $
              416.0
              
              
              $
              576.0
              
              
              $
              -
              
              
              $
              992.0Depreciation
                  and amortization
              
              
              (44.1
              )
              
              
              (2.1
              )
              
              
              -
              
              
              
              (46.2
              )Interest
                  charges
              
              
              (17.1
              )
              
              
              (0.9
              )
              
              
              (10.2
              )
              
              
              (28.2
              )Income
                  taxes
              
              
              (33.5
              )
              
              
              4.7
              
              
              
              5.3
              
              
              
              (23.5
              )Loss
                  from equity investments
              
              
              -
              
              
              
              -
              
              
              
              (0.4
              )
              
              
              (0.4
              )Net
                  income (loss)
              
              
              76.5
              
              
              
              (4.1
              )
              
              
              (10.3
              )
              
              
              62.1
 **As
                  Adjusted****Three
                  Months Ended**
              
              
              
              
              **Strategic**
              
              
              
              
              **Great
                  Plains****September
                  30, 2006**
              
              **KCP&L**
              
              **Energy**
              
              **Other**
              
              **Energy**(millions)Operating
                  revenues
              
              $
              359.3
              
              
              $
              459.2
              
              
              $
              -
              
              
              $
              818.5Depreciation
                  and amortization
              
              
              (38.5
              )
              
              
              (1.9
              )
              
              
              -
              
              
              
              (40.4
              )Interest
                  charges
              
              
              (15.5
              )
              
              
              (0.6
              )
              
              
              (1.9
              )
              
              
              (18.0
              )Income
                  taxes
              
              
              (40.0
              )
              
              
              10.2
              
              
              
              2.8
              
              
              
              (27.0
              )Loss
                  from equity investments
              
              
              -
              
              
              
              -
              
              
              
              (0.4
              )
              
              
              (0.4
              )Net
                  income (loss)
              
              
              70.7
              
              
              
              (10.9
              )
              
              
              (3.9
              )
              
              
              55.9
 **Year
                  to Date**
              
              
              
              
              **Strategic**
              
              
              
              
              **Great
                  Plains****September
                  30, 2007**
              
              **KCP&L**
              
              **Energy**
              
              **Other**
              
              **Energy**(millions)Operating
                  revenues
              
              $
              990.8
              
              
              $
              1,470.1
              
              
              $
              -
              
              
              $
              2,460.9Depreciation
                  and amortization
              
              
              (130.9
              )
              
              
              (6.2
              )
              
              
              -
              
              
              
              (137.1
              )Interest
                  charges
              
              
              (52.0
              )
              
              
              (2.4
              )
              
              
              (13.4
              )
              
              
              (67.8
              )Income
                  taxes
              
              
              (45.7
              )
              
              
              (9.1
              )
              
              
              8.7
              
              
              
              (46.1
              )Loss
                  from equity investments
              
              
              -
              
              
              
              -
              
              
              
              (1.1
              )
              
              
              (1.1
              )Net
                  income (loss)
              
              
              115.1
              
              
              
              16.5
              
              
              
              (20.5
              )
              
              
              111.1
 **As
                  Adjusted****Year
                  to Date**
              
              
              
              
              **Strategic**
              
              
              
              
              **Great
                  Plains****September
                  30, 2006**
              
              **KCP&L**
              
              **Energy**
              
              **Other**
              
              **Energy**(millions)Operating
                  revenues
              
              $
              890.6
              
              
              $
              1,129.2
              
              
              $
              -
              
              
              $
              2,019.8Depreciation
                  and amortization
              
              
              (112.8
              )
              
              
              (5.8
              )
              
              
              -
              
              
              
              (118.6
              )Interest
                  charges
              
              
              (45.4
              )
              
              
              (1.5
              )
              
              
              (6.2
              )
              
              
              (53.1
              )Income
                  taxes
              
              
              (63.7
              )
              
              
              17.4
              
              
              
              8.0
              
              
              
              (38.3
              )Loss
                  from equity investments
              
              
              -
              
              
              
              -
              
              
              
              (1.0
              )
              
              
              (1.0
              )Net
                  income (loss)
              
              
              120.3
              
              
              
              (17.6
              )
              
              
              (9.5
              )
              
              
              93.2
 
 45
 **Strategic**
              
              
              
              
              **Great
                  Plains****KCP&L**
              
              
              **Energy**
              
              
              **Other**
              
              **Energy****September
                  30, 2007**
              
              (millions)Assets
              
              $
              4,313.6
              
              
              $
              476.9
              
              
              $
              44.9
              
              
              $
              4,835.4Capital
                  expenditures (a)
              
              
              359.7
              
              
              
              3.0
              
              
              
              0.7
              
              
              
              363.4**December
                  31, 2006**Assets
              
              $
              3,858.0
              
              
              $
              459.6
              
              
              $
              18.1
              
              
              $
              4,335.7Capital
                  expenditures (a)
              
              
              476.0
              
              
              
              3.9
              
              
              
              0.2
              
              
              
              480.1(a)Capital
                  expenditures reflect year to date amounts for the periods
                  presented.
 **Consolidated
        KCP&L**
 The
          following tables reflect summarized financial information concerning
          consolidated KCP&L’s reportable segment.  Other includes HSS and
          intercompany eliminations.  Intercompany eliminations include
          insignificant amounts of intercompany financing-related activities.
 **Three
                  Months Ended**
              
              
              
              
              
              
              
              **Consolidated****September
                  30, 2007**
              
              **KCP&L**
              
              
              **Other**
              
              
              **KCP&L**(millions)Operating
                  revenues
              
              $
              416.0
              
              
              $
              -
              
              
              $
              416.0Depreciation
                  and amortization
              
              
              (44.1
              )
              
              
              -
              
              
              
              (44.1
              )Interest
                  charges
              
              
              (17.1
              )
              
              
              -
              
              
              
              (17.1
              )Income
                  taxes
              
              
              (33.5
              )
              
              
              -
              
              
              
              (33.5
              )Net
                  income
              
              
              76.5
              
              
              
              0.1
              
              
              
              76.6
 **As
                  Adjusted****Three
                  Months Ended**
              
              
              
              
              
              
              
              **Consolidated****September
                  30, 2006**
              
              **KCP&L**
              
              
              **Other**
              
              
              **KCP&L**(millions)Operating
                  revenues
              
              $
              359.3
              
              
              $
              -
              
              
              $
              359.3Depreciation
                  and amortization
              
              
              (38.5
              )
              
              
              -
              
              
              
              (38.5
              )Interest
                  charges
              
              
              (15.5
              )
              
              
              (0.1
              )
              
              
              (15.6
              )Income
                  taxes
              
              
              (40.0
              )
              
              
              0.2
              
              
              
              (39.8
              )Net
                  income (loss)
              
              
              70.7
              
              
              
              (1.2
              )
              
              
              69.5
 **Year
                  to Date**
              
              
              
              
              
              
              
              **Consolidated****September
                  30, 2007**
              
              **KCP&L**
              
              
              **Other**
              
              
              **KCP&L**(millions)Operating
                  revenues
              
              $
              990.8
              
              
              $
              -
              
              
              $
              990.8Depreciation
                  and amortization
              
              
              (130.9
              )
              
              
              -
              
              
              
              (130.9
              )Interest
                  charges
              
              
              (52.0
              )
              
              
              -
              
              
              
              (52.0
              )Income
                  taxes
              
              
              (45.7
              )
              
              
              -
              
              
              
              (45.7
              )Net
                  income (loss)
              
              
              115.1
              
              
              
              -
              
              
              
              115.1
 
 46
  **As
                  Adjusted****Year
                  to Date**
              
              
              
              
              
              
              
              **Consolidated****September
                  30, 2006**
              
              **KCP&L**
              
              
              **Other**
              
              
              **KCP&L**(millions)Operating
                  revenues
              
              $
              890.6
              
              
              $
              -
              
              
              $
              890.6Depreciation
                  and amortization
              
              
              (112.8
              )
              
              
              -
              
              
              
              (112.8
              )Interest
                  charges
              
              
              (45.4
              )
              
              
              (0.1
              )
              
              
              (45.5
              )Income
                  taxes
              
              
              (63.7
              )
              
              
              0.2
              
              
              
              (63.5
              )Net
                  income (loss)
              
              
              120.3
              
              
              
              (1.2
              )
              
              
              119.1
 **Consolidated****KCP&L**
                
                
                **Other**
                
                
                **KCP&L****September
                    30, 2007**
                
                (millions)Assets
                
                $
                4,313.6
                
                
                $
                2.1
                
                
                $
                4,315.7Capital
                    expenditures (a)
                
                
                359.7
                
                
                
                -
                
                
                
                359.7**December
                    31, 2006**Assets
                
                $
                3,858.0
                
                
                $
                1.5
                
                
                $
                3,859.5Capital
                    expenditures (a)
                
                
                476.0
                
                
                
                -
                
                
                
                476.0(a)Capital
                    expenditures reflect year to date amounts for the periods
                    presented.
 **17.**
                **DERIVATIVE
                    INSTRUMENTS**
  The
          Company is exposed to a variety of market risks including interest rates
          and
          commodity prices.  Management has established risk management policies
          and strategies to reduce the potentially adverse effects that the volatility
          of
          the markets may have on the Company’s operating results.  The risk
          management activities, including the use of derivative instruments, are
          subject
          to the management, direction and control of internal risk management
          committees. Management’s
          interest rate risk management strategy uses derivative instruments to adjust
          the
          Company’s liability portfolio to optimize the mix of fixed and floating rate
          debt within an established range.  In addition, the Company uses
          derivative instruments to hedge against future interest rate fluctuations
          on
          anticipated debt issuances.  Management maintains commodity-price risk
          management strategies that use derivative instruments to reduce the effects
          of
          fluctuations in fuel and purchased power expense caused by commodity price
          volatility.  Counterparties to commodity derivatives and interest rate
          swap agreements expose the Company to credit loss in the event of
          nonperformance.  This credit loss is limited to the cost of replacing
          these contracts at current market rates less the application of counterparty
          collateral held.  Derivative instruments, excluding those instruments
          that qualify for the NPNS election, which are accounted for by accrual
          accounting, are recorded on the balance sheet at fair value as an asset
          or
          liability.  Changes in the fair value are recognized currently in net
          income unless specific hedge accounting criteria are met.
  **Interest
          Rate Risk Management**
 ***Fair
          Value Hedges***
 In
          2002,
          KCP&L remarketed its Series 1998 A, B and D EIRR bonds totaling $146.5
          million to a five-year fixed interest rate of 4.75% ending October 1,
          2007.  Simultaneously with the remarketing, KCP&L entered into an
          interest rate swap for the $146.5 million based on the London Interbank
          Offered
          Rate (LIBOR) to effectively create a floating interest rate obligation,
          which
          expired on October 1, 2007.  The transaction was a fair value hedge
          with no ineffectiveness.  Changes in the fair market value of the swap
          were recorded on the balance sheet as an asset or liability with an offsetting
          entry to the respective debt balances with no net impact on net
          income.
  47
 ***Forward
          Starting Swaps***
 In
          July
          2007, Great Plains Energy entered into three Forward Starting Swaps (FSS),
          with
          a total notional amount of $250.0 million, to hedge against interest rate
          fluctuations on future issuances of long-term debt.  The long-term
          debt issuance is contingent on the consummation of the acquisition of
          Aquila.  If the merger is terminated due to regulatory actions,
          neither Great Plains Energy or the counterparty to these transactions are
          obligated to settle the FSS since the fair value of the FSS is set to
          zero.  The FSS was designed to effectively remove most of the interest
          rate and credit spread uncertainty with respect to the debt to be issued,
          thereby enabling Great Plains Energy to predict with greater assurance
          what its
          future interest costs on that debt will be.  The transaction is an
          economic hedge (non-hedging derivative) that does not qualify for cash
          flow
          hedge accounting.  The change in the fair value of this derivative
          instrument increased interest expense by $9.0 million for the three months
          ended
          and year to date September 30, 2007.
  In
          2006,
          KCP&L entered into two FSS to hedge against interest rate fluctuations on
          the $250.0 million 10-year long-term debt that KCP&L issued in the second
          quarter of 2007.  The FSS settled simultaneously with the issuance of
          the long-term fixed rate debt.  The FSS removed most of the interest
          rate and credit spread uncertainty with respect to debt to be issued, thereby
          enabling KCP&L to predict with greater assurance what its future interest
          costs on that debt would be.  The FSS were accounted for as a cash
          flow hedge and no ineffectiveness was recorded on the FSS.  A pre-tax
          gain of $3.3 million on the FSS was recorded to OCI and is being reclassified
          to
          interest expense over the life of the 10-year debt.  An insignificant
          amount was reclassified from OCI to interest expense subsequent to the
          debt
          issuance.  At September 30, 2007, KCP&L had $3.2 million recorded
          in OCI for the FSS.
  ***Treasury
          Locks***
 In
          2007,
          Great Plains Energy entered into three T-Locks, with a notional amount
          of $350.0
          million, to hedge against interest rate fluctuations on the U.S. Treasury
          rate
          component on future issuances of long-term debt.  The T-Locks will
          settle simultaneously with the issuance of the long-term fixed rate
          debt.  The T-Locks remove the uncertainty with respect to the U.S.
          Treasury rate component of the debt to be issued, thereby enabling Great
          Plains
          Energy to predict with greater assurance what its future interest costs
          on that
          debt will be.  The T-Locks are accounted for as cash flow hedges and
          the fair value is recorded as a current asset or liability with an offsetting
          entry to OCI, to the extent the hedges are effective, until the forecasted
          transaction occurs.  No ineffectiveness has been recorded on the
          T-Locks.  The pre-tax gain or loss on the T-Locks recorded to OCI will
          be reclassified to interest expense over the life of the future debt
          issuance.
  In
          2007,
          Great Plains Energy entered into a T-Lock to hedge against interest rate
          fluctuations on the U.S. Treasury rate component of the $100.0 million
          10-year
          long-term debt that Great Plains Energy issued in the third quarter of
          2007.  The T-Lock settled simultaneously with the issuance of the
          long-term fixed rate debt.  The T-Lock removed the uncertainty with
          respect to the U.S. Treasury rate component of the debt to be issued, thereby
          enabling Great Plains Energy to predict with greater assurance what its
          future
          interest costs on that debt would be.  The T-Lock was accounted for as
          cash flow hedge and no ineffectiveness was recorded on the T-Lock.  A
          pre-tax loss of $4.5 million on the T-Lock was recorded to OCI and is being
          reclassified to interest expense over the life of the issued 10-year
          debt.  An insignificant amount was reclassified from OCI to interest
          expense subsequent to the debt issuance.  At September 30, 2007, Great
          Plains Energy had $4.5 million recorded in OCI for this T-Lock.  Great
          Plains Energy had originally hedged this debt in 2006 using a
          T-Lock.  In the first quarter of 2007, Great Plains Energy allowed the
          T-Lock to expire while the terms of the debt offering were
          re-evaluated.  The $0.2 million gain recorded in OCI at December 31,
          2006, and the first quarter fair value loss of $0.1 million was reclassified
          to
          interest expense as cash flow ineffectiveness.
  48
 In
          2005,
          KCP&L entered into two T-Locks to hedge against interest rate fluctuations
          on the U.S. Treasury rate component of the $250.0 million 30-year long-term
          debt
          that KCP&L issued in 2005.  The T-Locks settled simultaneously
          with the issuance of the long-term fixed rate debt.  The T-Locks
          removed the uncertainty with respect to the U.S. Treasury rate component
          of the
          debt to be issued, thereby enabling KCP&L to predict with greater assurance
          what its future interest costs on that debt would be.  The T-Locks
          were accounted for as cash flow hedges and no ineffectiveness was recorded
          on
          the T-Locks.  A pre-tax gain of $12.0 million on the T-Locks was
          recorded to OCI and is being reclassified to interest expense over the
          life of
          the issued 30-year debt.  An insignificant amount was reclassified
          from OCI to interest expense subsequent to the debt issuance.  At
          September 30, 2007, KCP&L had $11.2 million recorded in OCI for the 2005
          T-Locks.
  **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.  As of September 30, 2007, KCP&L had hedged 17% and 4% of
          its 2008 and 2009 projected natural gas usage for retail load and firm
          MWh
          sales, respectively, primarily by utilizing fixed forward physical contracts
          and
          financial calls.  The fair values of these instruments are recorded as
          assets or liabilities with an offsetting entry to OCI for the effective
          portion
          of the hedge.  To the extent the hedges are not effective, the
          ineffective portion of the change in fair market value is recorded currently
          in
          fuel expense.  KCP&L did not record any gains or losses due to
          ineffectiveness during the three months ended and year to date September
          30,
          2007 and 2006.
  KCP&L
          has entered into an economic hedge (non-hedging derivative) that does not
          qualify for cash flow hedge accounting.  The change in the fair value
          of this derivative instrument recorded as a component of electric revenues
          was a
          gain of $0.2 million and $0.6 million for the three months ended and year
          to
          date September 30, 2007, respectively.
  Strategic
          Energy maintains a commodity-price risk management strategy that uses forward
          physical energy purchases and other derivative instruments to reduce the
          effects
          of fluctuations in purchased power expense caused by commodity-price
          volatility.  Derivative instruments are used to limit the unfavorable
          effect that price increases will have on electricity purchases, effectively
          fixing the future purchase price of electricity for the applicable forecasted
          usage and protecting Strategic Energy from significant price
          volatility.  The maximum term over which Strategic Energy hedged its
          exposure and variability of future cash flows was 5.25 years at September
          30,
          2007, and 5.5 years at December 31, 2006.
  Certain
          forward fixed price purchases and swap agreements are designated as cash
          flow
          hedges.  The fair values of these instruments are recorded as assets
          or liabilities with an offsetting entry to OCI for the effective portion
          of the
          hedge.  To the extent the hedges are not effective, the ineffective
          portion of the change in fair market value is recorded currently in purchased
          power.  When the forecasted purchase is completed, the amounts in OCI
          are reclassified to purchased power expense.  Purchased power expense
          for the three months ended and year to date September 30, 2007, includes
          a loss
          of $16.1 million and a gain of $5.5 million, respectively, due to
          ineffectiveness of the cash flow hedges, and a $13.1 million and $27.1
          million
          loss for the same periods of 2006.
  As
          part
          of its commodity-price risk management strategy, Strategic Energy also
          enters
          into economic hedges (non-hedging derivatives) that do not qualify for
          cash flow
          hedge accounting.  The changes in the fair value of these derivative
          instruments recorded as a component of purchased power expense were a loss
          of
          $3.2 million and $13.5 million for the three months ended September 30,
          2007 and
          2006, respectively, and a $15.0 million gain and $37.4 million loss year
          to date
          September 30, 2007 and 2006, respectively.
  49
 The
          fair
          value of non-hedging derivatives at September 30, 2007, also includes certain
          forward contracts at Strategic Energy that were amended during
          2005.  Prior to being amended, the contracts were accounted for under
          the NPNS election in accordance with SFAS No. 133.  As a result of
          being amended, the contracts no longer qualify for NPNS exceptions or cash
          flow
          hedge accounting and are now accounted for as non-hedging derivatives with
          the
          fair value at amendment being recorded as a deferred liability that will
          be
          reclassified to net income as the contracts settle.  For the three
          months ended September 30, 2007 and 2006, Strategic Energy amortized $0.2
          million and $0.4 million, respectively, of the deferred liability to purchased
          power expense related to the delivery of power under the
          contracts.  Year to date September 30, 2007 and 2006, Strategic Energy
          amortized $0.6 million and $5.0 million, respectively, of the deferred
          liability
          to purchased power expense related to the delivery of power under the
          contracts.  Strategic Energy will amortize the remaining deferred
          liability over the remaining original contract lengths, which end in the
          first
          quarter of 2008.  After the amendment, Strategic Energy is recording
          the change in fair value of these contracts to purchased power
          expense.
  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.
 
 **September
                  30**
              
              
              **December
                  31****2007**
              
              
              **2006****Notional**
              
              
              
              
              
              **Notional****Contract**
              
              
              **Fair**
              
              
              **Contract**
              
              
              **Fair****Amount**
              
              
              **Value**
              
              
              **Amount**
              
              
              **Value****Great
                  Plains Energy**
              
              (millions)Swap
                  contractsCash
                  flow hedges
              
              $
              302.2
              
              
              $
              (23.5
              )
              
              $
              477.5
              
              
              $
              (38.9
              )Non-hedging
                  derivatives
              
              
              89.4
              
              
              
              (7.6
              )
              
              
              37.1
              
              
              
              (6.8
              )Forward
                  contractsCash
                  flow hedges
              
              
              1,022.9
              
              
              
              (28.4
              )
              
              
              871.5
              
              
              
              (69.7
              )Non-hedging
                  derivatives
              
              
              318.5
              
              
              
              (9.0
              )
              
              
              250.7
              
              
              
              (24.8
              )Anticipated
                  debt issuanceForward
                  starting swap
              
              
              -
              
              
              
              -
              
              
              
              225.0
              
              
              
              (0.4
              )Treasury
                  lock
              
              
              350.0
              
              
              
              (9.9
              )
              
              
              77.6
              
              
              
              0.2Non-hedging
                  derivatives
              
              
              250.0
              
              
              
              (9.0
              )
              
              
              -
              
              
              
              -Interest
                  rate swapsFair
                  value hedges
              
              
              146.5
              
              
              
              -
              
              
              
              146.5
              
              
              
              (1.8
              )**Consolidated
                  KCP&L**Swap
                  contractsCash
                  flow hedges
              
              
              1.9
              
              
              
              -
              
              
              
              -
              
              
              
              -Forward
                  contractsCash
                  flow hedges
              
              
              1.4
              
              
              
              (0.1
              )
              
              
              6.1
              
              
              
              (0.5
              )Non-hedging
                  derivatives
              
              
              3.4
              
              
              
              0.6
              
              
              
              -
              
              
              
              -Anticipated
                  debt issuanceForward
                  starting swap
              
              
              -
              
              
              
              -
              
              
              
              225.0
              
              
              
              (0.4
              )Interest
                  rate swapsFair
                  value hedges
              
              
              146.5
              
              
              
              -
              
              
              
              146.5
              
              
              
              (1.8
              )
 
 50
 The
        amounts recorded in accumulated OCI related to the cash flow hedges are
        summarized in the following table.
 **Great
                  Plains Energy**
              
              
              **Consolidated
                  KCP&L****September
                  30**
              **December
                  31**
              **September
                  30**
              **December
                  31****2007**
              **2006**
              **2007**
              **2006**(millions)Current
                  assets
              
              $
              12.1
              
              
              $
              12.7
              
              
              $
              14.4
              
              
              $
              12.0Other
                  deferred charges
              
              
              3.9
              
              
              
              1.7
              
              
              
              -
              
              
              
              -Other
                  current liabilities
              
              
              (50.4
              )
              
              
              (56.3
              )
              
              
              (0.1
              )
              
              
              (1.3
              )Deferred
                  income taxes
              
              
              15.1
              
              
              
              32.1
              
              
              
              (5.4
              )
              
              
              (4.0
              )Other
                  deferred credits
              
              
              (2.5
              )
              
              
              (35.3
              )
              
              
              -
              
              
              
              -Total
              
              $
              (21.8
              )
              
              $
              (45.1
              )
              
              $
              8.9
              
              
              $
              6.7
 Great
          Plains Energy’s accumulated OCI in the table above at September 30, 2007,
          includes a loss of $38.2 million that is expected to be reclassified to
          expenses
          over the next twelve months.  Consolidated KCP&L’s accumulated OCI
          includes a gain of $0.7 million that is expected to be reclassified to
          expense
          over the next twelve months.
  The
          amounts reclassified to expenses are summarized in the following
          table.
 **Three
                  Months Ended**
              
              
              **Year
                  to Date****September
                  30**
              
              
              **September
                  30****2007**
              
              
              **2006**
              
              
              **2007**
              
              
              **2006****Great
                  Plains Energy**
              
              (millions)Purchased
                  power expense
              
              $
              26.1
              
              
              $
              13.0
              
              
              $
              64.4
              
              
              $
              29.6Interest
                  expense
              
              
              (0.2
              )
              
              
              (0.1
              )
              
              
              (0.4
              )
              
              
              (0.3
              )Income
                  taxes
              
              
              (10.6
              )
              
              
              (5.3
              )
              
              
              (26.1
              )
              
              
              (12.2
              )OCI
              
              $
              15.3
              
              
              $
              7.6
              
              
              $
              37.9
              
              
              $
              17.1**Consolidated
                  KCP&L**Interest
                  expense
              
              $
              (0.3
              )
              
              $
              (0.1
              )
              
              $
              (0.5
              )
              
              $
              (0.3
              )Income
                  taxes
              
              
              0.1
              
              
              
              -
              
              
              
              0.2
              
              
              
              0.1OCI
              
              $
              (0.2
              )
              
              $
              (0.1
              )
              
              $
              (0.3
              )
              
              $
              (0.2
              )
 **18.**
                **JOINTLY
                    OWNED ELECTRIC UTILITY
                    PLANTS**
  KCP&L’s
          share of jointly owned electric utility plants at September 30, 2007, is
          detailed in the following table.
 **Wolf
                  Creek**
              
              **LaCygne**
              
              **Iatan
                  No. 1**
              
              **Iatan
                  No. 2****Unit**
              
              **Units**
              
              **Unit**
              
              **Unit**(millions,
                  except MW amounts)KCP&L's
                  share
              
              
              47 %
              
              
              50%
              
              
              70%
              
              
              
              55%Utility
                  plant in service
              
              $
              1,379.9
              
              $
              392.6
              
              $
              275.6
              
              
              $
              -Accumulated
                  depreciation
              
              
              741.3
              
              
              260.1
              
              
              198.3
              
              
              
              -Nuclear
                  fuel, net
              
              
              64.4
              
              
              -
              
              
              -
              
              
              
              -Construction
                  work in progress
              
              
              21.5
              
              
              0.7
              
              
              87.7
              
              
              
              217.0KCP&L's
                  2007 accredited capacity-MWs
              
              
              548
              
              
              709
              
              
              460
              (a)
              
              
              -(a)The
                  Iatan No. 2 air permit limits KCP&L's accredited capacity of Iatan No.
                  1 to 460 MWs from469
                  MWs until theair quality control equipment included in the Comprehensive Energy
                Plan isoperational.




51


Each
        owner must fund its own portion of the plant's operating expenses and capital
        expenditures.  KCP&L’s share of direct expenses is included in the
        appropriate operating expense classifications in Great Plains Energy’s and
        consolidated KCP&L’s financial statements.
  **19.**
              **NEW
                  ACCOUNTING STANDARDS**
  **SFAS
        No. 159**
 In
        February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
        Financial Assets and Financial Liabilities—Including an amendment of FASB
        Statement No. 115.”  This statement provides companies with an option
        to report selected financial assets and liabilities at fair value, with changes
        in fair value recorded in earnings.  The statement is effective for
        Great Plains Energy and consolidated KCP&L January 1, 2008, with earlier
        application permitted in certain circumstances.  Management is
        currently evaluating the impact of SFAS No. 159 and has not yet determined
        the
        impact on Great Plains Energy’s and consolidated KCP&L’s consolidated
        financial statements.
  **ITEM
        2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS**
  The
        MD&A that follows is a combined presentation for Great Plains Energy and
        consolidated KCP&L, both registrants under this filing.  The
        discussion and analysis by management focuses on those factors that had a
        material effect on the financial condition and results of operations of the
        registrants during the periods presented.
  Great
        Plains Energy is a public utility holding company and does not own or operate
        any significant assets other than the stock of its
        subsidiaries.  Great Plains Energy’s direct subsidiaries with
        operations or active subsidiaries are KCP&L, KLT Inc., IEC and
        Services.  As a diversified energy company, Great Plains Energy’s
        reportable business segments include KCP&L and Strategic
        Energy.
  **Executive
        Summary**
 At
        KCP&L, both retail and wholesale revenues were higher for the three months
        ended September 30, 2007, compared to the same period last
        year.  Favorable weather, new retail rates and customer growth more
        than offset higher purchased power expense and higher operating
        expenses.  Retail and wholesale revenues were higher year to date
        September 30, 2007, compared to the same period last year; however, outages
        at
        base load generating units during the first half of 2007 led to increased
        use of
        natural gas, increased purchased power expense and increased maintenance
        expense.  For both the three months ended and year to date September
        30, 2007, KCP&L experienced higher pension costs due to the increased level
        of pension costs in KCP&L’s rates effective January 1, 2007, and higher
        depreciation and amortization expense.
  On
        May 9,
        2007, KCP&L experienced a steam pipe rupture at Iatan No. 1, which resulted
        in two fatalities.  The repair and precautionary work on Iatan No. 1
        resulted in an 18-day outage.  An Occupational Safety and Health
        Administration (OSHA) investigation is on-going and expected to be completed
        before the end of the year.  Management is unable to predict the
        outcome of this investigation.
  At
        Strategic Energy, average retail gross margin per MWh for the three months
        ended
        September 30, 2007, increased compared to the same period last year primarily
        due to the changes in fair value related to non-hedging energy contracts
        and
        from hedge ineffectiveness.  Average retail gross margins per MWh
        without the impact of unrealized fair value gains and losses on energy contracts
        increased slightly due to increased retail MWh deliveries to the small business
        segment, which has a higher margin, and lower customer acquisition
        costs.
  52
 Average
        retail gross margin per MWh year to date September 30, 2007, increased compared
        to the same period last year primarily due to the changes in fair value related
        to non-hedging energy contracts and from hedge
        ineffectiveness.  Average retail gross margins per MWh without the
        impact of unrealized fair value gains and losses on energy contracts decreased
        primarily due to increased purchased power expense associated with a
        resettlement attributable to under-reported deliveries to one of the primary
        market regulators where Strategic Energy conducts scheduling and settlement
        operations, the disposition of previously-acquired power at lower than
        contracted prices and the absence of supplier contract
        settlements.  Strategic Energy also experienced an increase in bad
        debt expense in the small business segment and recognized potential penalty
        expense related to the purchased power adjustment for under-reported
        deliveries.
  **Anticipated
        Acquisition of Aquila, Inc.**
 In
        February 2007, Great Plains Energy entered into an agreement to acquire all
        outstanding shares of Aquila for $1.80 in cash plus 0.0856 of a share of
        Great
        Plains Energy common stock for each share of Aquila common
        stock.  Immediately prior to Great Plains Energy’s acquisition of
        Aquila, Black Hills will acquire Aquila’s electric utility in Colorado and its
        gas utilities in Colorado, Kansas, Nebraska and Iowa plus associated liabilities
        for a total of $940 million in cash, subject to closing
        adjustments.  Each of the two transactions is conditioned on the
        completion of the other transaction and is expected to close in the first
        quarter of 2008.  Activity related to the anticipated acquisition of
        Aquila is as follows:
  ·
              In
                  April 2007, Great Plains Energy, KCP&L and Aquila filed joint
                  applications with the MPSC and KCC for approval of the acquisition
                  of
                  Aquila by Great Plains Energy.  These filings were updated in
                  August 2007.  The MPSC Staff has filed testimony asserting that
                  the transaction is detrimental to the public interest and should
                  not be
                  approved.  Other parties in the MPSC case have asserted that the
                  transaction should not be approved, or approved withconditions.  Evidentiary
                  hearings are scheduled for December 2007 in Missouri and January
                  2008 in
                  Kansas, with decisions expected in the first quarter of
                  2008.
  ·
              In
                  April 2007, Aquila and Black Hills filed applications with the
                  Colorado
                  Public Utilities Commission (CPUC), KCC, the Nebraska Public Service
                  Commission (NPSC) and the Iowa Utilities Board (IUB) seeking approval
                  of
                  the sale of assets to Black Hills.  The IUB and NPSC have
                  approved the sale of assets.
  ·
              In
                  May 2007, Great Plains Energy, KCP&L, Aquila and Black Hills filed a
                  joint application (which was amended in June 2007) with FERC for
                  approval
                  of the transactions.  On October 18, 2007, FERC granted the
                  joint application.
  ·
              In
                  July 2007, Great Plains Energy and Aquila submitted their respective
                  Hart-Scott-Rodino pre-merger notifications relating to the acquisition
                  of
                  Aquila by Great Plains Energy, and received early termination of
                  the
                  waiting period on August 27, 2007.
  ·
              In
                  October 2007, Great Plains Energy received approval from its shareholders
                  to issue common stock in connection with the anticipated acquisition
                  of
                  Aquila and Aquila’s shareholders approved the acquisition of Aquila by
                  Great Plains Energy.
  ·
              Integration
                  planning is underway.
  See
        Note
        2 to the consolidated financial statements for additional
        information.
  53
 **Strategic
          Energy Alternatives Review**
 Great
          Plains Energy has retained Merrill Lynch & Co. as financial advisor to
          assist in a review of strategic and structural alternatives for its Strategic
          Energy subsidiary.  The alternatives may include, among others,
          continuation of Strategic Energy’s current subsidiary status and business plans,
          joint ventures with strategic partners, acquisitions of similar businesses,
          or
          sales of part or all of Strategic Energy.  There is no assurance
          regarding which of the foregoing alternatives, if any, will be selected,
          or the
          terms of any possible joint venture, acquisition or sale.
  **EXECUTING
        ON STRATEGIC INTENT**
  **KCP&L’s
        Comprehensive Energy Plan**
 KCP&L
        continues to execute on its Comprehensive Energy Plan.  The first
        phase of environmental upgrades at LaCygne No. 1, installation of selective
        catalytic reduction equipment, was completed and placed into service during
        the
        second quarter of 2007.  Environmental upgrades at Iatan No. 1 are
        currently underway and completion is scheduled for late 2008.  An
        outage at Iatan No. 1 is planned to complete and place in service these
        environmental upgrades during the fourth quarter of
        2008.  Construction of Iatan No. 2 is on-going and on schedule for
        completion in 2010.  The erection of the stack liner continues,
        underground utilities and foundations are proceeding on schedule, boiler
        foundations have been released to the boiler erection contractor, steel erection
        has commenced and the turbine generator pedestal is complete.
  In
        March
        2007, KCP&L, the Sierra Club and the Concerned Citizens of Platte County
        entered into a Collaboration Agreement that resolved disputes among the parties
        and KCP&L agreed to pursue a set of initiatives including energy efficiency,
        additional wind generation, lower emission permit levels at its Iatan and
        LaCygne generating stations and other initiatives designed to offset carbon
        dioxide emissions.  Under the Collaboration Agreement, KCP&L will,
        among other things, pursue increasing its wind generation capacity by 100
        MW by
        year-end 2010 and another 300 MW by year-end 2012, subject to regulatory
        approval.  In April 2007, KCP&L issued a request for proposals to
        develop 100 MW of wind generation in Missouri and/or Kansas.  The
        request is an outgrowth of commitments under the Comprehensive Energy
        Plan.  KCP&L has received proposals, which are being
        evaluated.  KCP&L will address the other items contemplated in the
        Collaboration Agreement in its integrated resource planning and comprehensive
        energy planning processes expected to be completed in the third and fourth
        quarters of 2008.  See Notes 6 and 14 to the consolidated financial
        statements for additional information.
  **KCP&L
        Regulatory Proceedings**
 On
        February 1, 2007, KCP&L filed a request with the MPSC for an annual rate
        increase of $45 million or 8.3%, which, if approved, would take effect January
        1, 2008.  In July 2007, the MPSC Staff filed its case regarding
        KCP&L’s rate request.  In its filing, the Staff asserted that
        KCP&L’s annual revenues should be increased by $0.7 million, before
        adjustments resulting from the September 30, 2007, true-up of test year
        information.  The Staff’s filing assumed adjustments resulting from
        this true-up would increase revenue requirements by $14 million, resulting
        in a
        required increase in annual revenues of $14.7 million.  This amount
        reflects approximately $15 million to $17 million in accelerated depreciation,
        which the Staff asserts will maintain certain KCP&L credit ratios at
        investment-grade levels as provided for in the stipulation and agreement
        approved by the MPSC in 2005.  Evidentiary hearings were held in
        October 2007, true-up hearings are anticipated in November 2007 and a decision
        is expected in December 2007.
  On
        March
        1, 2007, KCP&L filed a request with KCC for an annual rate increase of $47
        million or 10.8%, along with a proposed energy cost adjustment clause, which,
        if
        approved, would take effect January 1, 2008.  KCP&L reached a
        negotiated settlement of its request with certain parties to the rate
        proceedings and in September 2007 filed a Joint Stipulation and Agreement
        (Agreement) containing the settlement with KCC.  The Agreement
        stipulates a $28 million increase in annual revenues effective January 1,
 54
 2008,
        with $11 million of that amount treated for accounting purposes as an increase
        to the depreciation reserve.  The Agreement also recommends an Energy
        Cost Adjustment Clause (ECA) tariff.  The ECA tariff will reflect the
        projected annual amount of fuel, purchased power, emission allowances,
        transmission costs and asset-based off-system sales margin.  The
        Agreement is subject to KCC approval, and is voidable if not approved in
        its
        entirety.  It is possible that KCC may approve the Agreement with
        changes, or may not approve the Agreement.  A decision is expected in
        December 2007.  See Note 6 to the consolidated financial statement for
        additional information.
  The
        rate
        increases were filed in order to help recover costs of air quality improvement
        investments included in KCP&L’s Comprehensive Energy Plan as well as higher
        fuel and other operational costs.
  **KCP&L
        BUSINESS OVERVIEW**
  KCP&L
        is an integrated, regulated electric utility that engages in the generation,
        transmission, distribution and sale of electricity.  KCP&L has
        over 4,000 MWs of generating capacity and has transmission and distribution
        facilities that provide electricity to approximately 507,000 customers in
        the
        states of Missouri and Kansas.  KCP&L has continued to experience
        modest load growth.  Load growth consists of higher usage per customer
        and the addition of new customers.  Retail electricity rates are below
        the national average.
  KCP&L’s
        residential customers’ usage is significantly affected by
        weather.  Bulk power sales, the major component of wholesale sales,
        vary with system requirements, generating unit and purchased power availability,
        fuel costs and requirements of other electric systems.  Less than 1%
        of revenues currently include a fuel cost adjustment clause; however, an
        energy
        cost adjustment clause is expected to be implemented in Kansas retail rates
        in
        2008.
  KCP&L’s
        nuclear unit, Wolf Creek,
        accounts for approximately 20%of KCP&L’s base load
        capacity.  KCP&L defers operations and maintenance expenses
        incurred for scheduled refueling outages and amortizes these expenses evenly
        (monthly) over the unit’s 18 month operating cycle until the next scheduled
        outage.  Replacement power costs during refueling outages are expensed
        as incurred.  The next refueling outage is scheduled to begin in March
        2008.
  The
        fuel
        cost per MWh generated and the purchased power cost per MWh have a significant
        impact on the results of operations for KCP&L.  Generation fuel
        mix can substantially change the fuel cost per MWh generated.  Nuclear
        fuel cost per MWh generated is substantially less than the cost of coal per
        MWh
        generated, which is significantly lower than the cost of natural gas and
        oil per
        MWh generated.  The cost per MWh for purchased power is generally
        significantly higher than the cost per MWh of coal and nuclear
        generation.  KCP&L continually evaluates its system requirements,
        the availability of generating units, availability and cost of fuel supply
        and
        purchased power, and the requirements of other electric systems to provide
        reliable power economically.
  **STRATEGIC
        ENERGY BUSINESS OVERVIEW**
  Great
        Plains Energy indirectly owns 100% of Strategic Energy.  Strategic
        Energy does not own any generation, transmission or distribution
        facilities.  Strategic Energy provides competitive retail electricity
        supply services by entering into power supply contracts to supply electricity
        to
        its end-use customers.  Of the states that offer retail choice,
        Strategic Energy operates in California, Connecticut, Illinois, Maryland,
        Massachusetts, Michigan, New Jersey, New York, Ohio, Pennsylvania and
        Texas.  In addition to competitive retail electricity supply services,
        Strategic Energy also provides strategic planning, consulting and billing
        and
        scheduling services in the natural gas and electricity markets.
  55
 The
        cost
        of supplying electric service to retail customers can vary widely by geographic
        market.  This variability can be affected by many factors, including,
        but not limited to, geographic differences in the cost per MWh of purchased
        power, renewable energy requirements and capacity charges due to regional
        purchased power availability and requirements of other electricity providers
        and
        differences in transmission charges.
  Strategic
        Energy provides services to approximately 110,200 commercial, institutional
        and
        small manufacturing accounts (for approximately 26,000 customers) including
        numerous Fortune 500 companies, smaller companies and governmental
        entities.  Strategic Energy offers an array of products designed to
        meet the various requirements of a diverse customer base including fixed
        price,
        index-based and month-to-month renewal products.  Strategic Energy’s
        volume-based customer retention rate, excluding month-to-month customers
        on
        market-based rates was 57% for the three months ended and 48% year to date
        September 30, 2007.  The corresponding volume-based customer retention
        rates including month-to-month customers on market-based rates was 74% and
        60%,
        respectively.  The year to date retention rates are lower than the
        typical rates experienced by Strategic Energy, reflecting Strategic Energy's
        decision not to renew two large customer accounts during the second
        quarter.
  Management
        has focused sales and marketing efforts on states that currently provide
        a more
        competitive pricing environment in relation to host utility default
        rates.  In these states, Strategic Energy continues to experience
        improvement in certain key metrics, including forecasted future MWh commitments
        (backlog) growth.  Total backlog grew to 37.4 million MWh at September
        30, 2007, compared to 28.4 million MWh at September 30, 2006.  Based
        solely on expected MWh usage under current signed contracts, Strategic Energy
        has backlog of 5.3 million MWh for the remainder of 2007, 15.9 million MWh
        and
        7.6 million MWh for the years 2008 and 2009, respectively, and 8.6 million
        MWh
        over the years 2010 through 2012.  Strategic Energy expects to deliver
        additional MWhs above amounts currently in backlog through new and renewed
        term
        contracts and MWh deliveries to month-to-month customers.  Strategic
        Energy’s projected MWh deliveries for 2007 are in the range of 19 million to 21
        million MWhs.
  Strategic
        Energy currently expects the average retail gross margin per MWh (retail
        revenues less retail purchased power divided by retail MWhs delivered) delivered
        in 2007 to average $4.00 to $5.00.  This range excludes unrealized
        changes in fair value of non-hedging energy contracts and from hedge
        ineffectiveness because management does not predict the future impact of
        these
        unrealized changes.  Actual retail gross margin per MWh may differ
        from these estimates.
  **RELATED
        PARTY TRANSACTIONS**
  See
        Note
        13 to the consolidated financial statements for information regarding related
        party transactions.
 56
 **GREAT
        PLAINS ENERGY RESULTS OF OPERATIONS**
  The
        following table summarizes Great Plains Energy’s comparative results of
        operations.


**Three
                  Months Ended**
              
              
              **Year
                  to Date****September
                  30**
              
              
              **September
                  30****As
                  Adjusted**
              
              
              
              
              
              **As
                  Adjusted****2007**
              
              **2006**
              
              
              **2007**
              
              **2006**(millions)Operating
                  revenues
              
              $
              992.0
              
              
              $
              818.5
              
              
              $
              2,460.9
              
              
              $
              2,019.8Fuel
              
              
              (75.6
              )
              
              
              (76.3
              )
              
              
              (186.2
              )
              
              
              (178.1
              )Purchased
                  power
              
              
              (606.8
              )
              
              
              (467.4
              )
              
              
              (1,467.2
              )
              
              
              (1,136.2
              )Other
                  operating expenses
              
              
              (150.4
              )
              
              
              (139.4
              )
              
              
              (448.7
              )
              
              
              (397.1
              )Skill
                  set realignment costs
              
              
              -
              
              
              
              (1.4
              )
              
              
              -
              
              
              
              (15.9
              )Depreciation
                  and amortization
              
              
              (46.2
              )
              
              
              (40.4
              )
              
              
              (137.1
              )
              
              
              (118.6
              )Gain
                  on property
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              0.6Operating
                  income
              
              
              113.0
              
              
              
              93.6
              
              
              
              221.7
              
              
              
              174.5Non-operating
                  income and expenses
              
              
              1.2
              
              
              
              7.7
              
              
              
              4.4
              
              
              
              11.1Interest
                  charges
              
              
              (28.2
              )
              
              
              (18.0
              )
              
              
              (67.8
              )
              
              
              (53.1
              )Income
                  taxes
              
              
              (23.5
              )
              
              
              (27.0
              )
              
              
              (46.1
              )
              
              
              (38.3
              )Loss
                  from equity investments
              
              
              (0.4
              )
              
              
              (0.4
              )
              
              
              (1.1
              )
              
              
              (1.0
              )Net
                  income
              
              
              62.1
              
              
              
              55.9
              
              
              
              111.1
              
              
              
              93.2Preferred
                  dividends
              
              
              (0.3
              )
              
              
              (0.5
              )
              
              
              (1.2
              )
              
              
              (1.3
              )Earnings
                  available for common shareholders
              $
              61.8
              
              
              $
              55.4
              
              
              $
              109.9
              
              
              $
              91.9
  In
        December 2006, Great Plains Energy and consolidated KCP&L adopted Financial
        Accounting Standards Board (FASB) Staff Position (FSP) No. AUG AIR-1,
“Accounting for Planned Major Maintenance Activities,” and retrospectively
        adjusted prior periods.  FSP No. AUG AIR-1 prohibits the use of the
        accrue-in-advance method of accounting for planned major maintenance
        activities.  Prior to adoption, KCP&L utilized the
        accrue-in-advance method for incremental costs to be incurred during scheduled
        Wolf Creek refueling outages.  KCP&L adopted the deferral method
        to account for operations and maintenance expenses incurred for scheduled
        refueling outages to be amortized evenly (monthly) over the unit’s 18 month
        operating cycle until the next scheduled outage.  Replacement power
        costs during the outage are expensed as incurred.  See Note 5 to the
        consolidated financial statements for additional information.
 
 **Three
        Months Ended September 30, 2007, Compared to September 30,
        2006**
 Great
        Plains Energy’s earnings for the three months ended September 30, 2007,
        increased to $61.8 million, or $0.72 per share, from earnings of $55.4 million,
        or $0.69 per share, in the same period in 2006.  A higher average
        number of common shares, primarily due to the issuance of 5.2 million shares
        to
        the holders of FELINE PRIDES in February 2007, diluted 2007 earnings per
        share
        by $0.05.
  Consolidated
        KCP&L’s net income increased to $76.6 million for the three months ended
        September 30, 2007, compared to $69.5 million for the same period in
        2006.  Increased retail and wholesale revenues were partially offset
        by increased purchased power expense as lower natural gas prices allowed
        KCP&L to purchase power more economically than running natural gas-fired
        generation, increased pension expense, increased amortization per 2006 rate
        orders and increased depreciation related to the Spearville Wind Energy
        Facility.
  57
 Strategic
        Energy had a net loss of $4.1 million for the three months ended September
        30,
        2007, compared to a net loss of $10.9 million for the same period in
        2006.  The after-tax loss from the changes in fair value related to
        non-hedging energy contracts and from hedge ineffectiveness decreased $4.3
        million in 2007 compared to 2006.
  The
        $6.2
        million decrease in other non-regulated activities for the three months ended
        September 30, 2007, compared to the same period in 2006, is primarily due
        to a
        $5.6 million after-tax loss for the fair value of FSS entered into by Great
        Plains Energy in July 2007, related to a future debt issuance that is contingent
        on the consummation of the acquisition of Aquila.  If the merger is
        terminated due to regulatory actions, neither Great Plains Energy or the
        counterparty to these transactions are obligated to settle the FSS since
        the
        fair value of the FSS is set to zero.
  **Year
        to Date September 30, 2007, Compared to September 30, 2006**
 Great
        Plains Energy’s earnings year to date September 30, 2007, increased to $109.9
        million, or $1.29 per diluted share, from $91.9 million, or $1.19 per share,
        in
        the same period in 2006.  A higher average number of common shares,
        primarily due to the issuance of 5.2 million shares to the holders of FELINE
        PRIDES in February 2007 and 5.2 million shares in May 2006, diluted 2007
        earnings per share by $0.13.
 
 Consolidated
        KCP&L’s net income decreased to $115.1 million year to date September 30,
        2007, compared to $119.1 million for the same period in 2006.  A
        scheduled maintenance outage which was extended by several days at Iatan
        No. 1
        during the first quarter of 2007 and outages at KCP&L’s base load generating
        units during the first and second quarter of 2007, including the unplanned
        outage at Iatan No. 1, led to increased fuel, purchased power and maintenance
        expense.  Additionally, pension expense, depreciation and amortization
        and interest expense increased.  These decreases to net income were
        partially offset by an increase in retail revenue, wholesale revenue and
        the
        absence of skill set realignment costs.
 
 Strategic
        Energy had net income of $16.5 million year to date September 30, 2007, compared
        to a $17.6 million net loss in the same period in 2006.  This change
        is primarily due to the impact of a $50.2 million after-tax increase in changes
        in fair value related to non-hedging energy contracts and from hedge
        ineffectiveness.  This increase was partially offset by increased
        purchased power expense due to a resettlement attributable to under-reported
        deliveries and the disposition of previously-acquired power at lower than
        contracted prices caused by early terminations in the small business segment
        and
        the absence of supplier contract settlements.  Strategic Energy also
        experienced an increase in bad debt expense in the small business segment
        and
        recognized penalty expense related to the purchased power adjustment for
        under-reported deliveries.
  The
        $10.9
        million decrease in other non-regulated activities year to date September
        30,
        2007, compared to the same period in 2006, is primarily attributable to a
        decline in available tax credits from affordable housing investment and overall
        higher expenses at the holding company including $5.9 million of transition
        costs related to the anticipated acquisition of Aquila and a $5.6 million
        after-tax loss for the fair value of FSS entered into by Great Plains Energy
        in
        July 2007.
  58
 **CONSOLIDATED
        KCP&L RESULTS OF OPERATIONS**
  The
        following discussion of consolidated KCP&L results of operations includes
        KCP&L, an integrated, regulated electric utility and HSS, an unregulated
        inactive subsidiary of KCP&L.  In the discussion that follows,
        references to KCP&L reflect only the operations of the
        utility.  The following table summarizes consolidated KCP&L's
        comparative results of operations.
 **Three
                  Months Ended**
              
              
              **Year
                  to Date****September
                  30**
              
              
              **September
                  30****As
                  Adjusted**
              
              
              
              
              
              **As
                  Adjusted****2007**
              
              
              **2006**
              
              
              **2007**
              
              
              **2006**(millions)Operating
                  revenues
              
              $
              416.0
              
              
              $
              359.3
              
              
              $
              990.8
              
              
              $
              890.6Fuel
              
              
              (75.6
              )
              
              
              (76.3
              )
              
              
              (186.2
              )
              
              
              (178.1
              )Purchased
                  power
              
              
              (41.3
              )
              
              
              (5.1
              )
              
              
              (80.4
              )
              
              
              (18.8
              )Other
                  operating expenses
              
              
              (128.0
              )
              
              
              (119.6
              )
              
              
              (383.1
              )
              
              
              (346.6
              )Skill
                  set realignment costs
              
              
              -
              
              
              
              (1.4
              )
              
              
              -
              
              
              
              (15.6
              )Depreciation
                  and amortization
              
              
              (44.1
              )
              
              
              (38.5
              )
              
              
              (130.9
              )
              
              
              (112.8
              )Gain
                  on property
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              0.6Operating
                  income
              
              
              127.0
              
              
              
              118.4
              
              
              
              210.2
              
              
              
              219.3Non-operating
                  income and expenses
              
              
              0.2
              
              
              
              6.5
              
              
              
              2.6
              
              
              
              8.8Interest
                  charges
              
              
              (17.1
              )
              
              
              (15.6
              )
              
              
              (52.0
              )
              
              
              (45.5
              )Income
                  taxes
              
              
              (33.5
              )
              
              
              (39.8
              )
              
              
              (45.7
              )
              
              
              (63.5
              )Net
                  income
              
              $
              76.6
              
              
              $
              69.5
              
              
              $
              115.1
              
              
              $
              119.1
 **Consolidated
        KCP&L Sales Revenues and MWh Sales**
 **Three
                  Months Ended**
              
              
              
              
              
              **Year
                  to Date****September
                  30**
              
              
              **%**
              
              
              **September
                  30**
              
              
              **%****2007**
              
              
              **2006**
              
              
              **Change**
              
              
              **2007**
              
              
              **2006**
              
              
              **Change**Retail
                  revenues
              
              (millions)
              
              
              
              
              
              (millions)Residential
              
              $
              160.0
              
              
              $
              140.2
              
              
              
              14
              
              
              $
              348.8
              
              
              $
              310.4
              
              
              
              12Commercial
              
              
              157.8
              
              
              
              140.2
              
              
              
              13
              
              
              
              386.1
              
              
              
              347.7
              
              
              
              11Industrial
              
              
              31.7
              
              
              
              28.7
              
              
              
              10
              
              
              
              83.4
              
              
              
              77.6
              
              
              
              7Other
                  retail revenues
              
              
              2.4
              
              
              
              2.3
              
              
              
              14
              
              
              
              7.3
              
              
              
              6.7
              
              
              
              11Total
                  retail
              
              
              351.9
              
              
              
              311.4
              
              
              
              13
              
              
              
              825.6
              
              
              
              742.4
              
              
              
              11Wholesale
                  revenues
              
              
              59.3
              
              
              
              43.7
              
              
              
              36
              
              
              
              152.0
              
              
              
              137.4
              
              
              
              11Other
                  revenues
              
              
              4.8
              
              
              
              4.2
              
              
              
              11
              
              
              
              13.2
              
              
              
              10.8
              
              
              
              22Consolidated
                  KCP&L revenues
              
              $
              416.0
              
              
              $
              359.3
              
              
              
              16
              
              
              $
              990.8
              
              
              $
              890.6
              
              
              
              11
 59
 **Three
                  Months Ended**
              
              
              
              **Year
                  to Date****September
                  30**
              
              **%**
              
              **September
                  30**
              %**2007**
              
              **2006**
              
              **Change**
              
              **2007**
              
              **2006**
              
              **Change**Retail
                  MWh sales
              
              (thousands)
              
              
              
              (thousands)Residential
              
              1,840
              
              1,769
              
              4
              
              
              
              4,232
              
              3Commercial
              
              2,242
              
              2,117
              
              6
              
              5,905
              
              5,654
              
              4Industrial
              
              602
              
              579
              
              4
              
              1,657
              
              1,643
              
              1Other
                  retail MWh sales
              
              19
              
              21
              
              (3)
              
              67
              
              63
              
              6Total
                  retail
              
              4,703
              
              4,486
              
              5
              
              11,996
              
              11,592
              
              3Wholesale
                  MWh sales
              
              1,438
              
              1,058
              
              36
              
              3,686
              
              3,240
              
              14KCP&L
                  electric MWh sales
              
              6,141
              
              5,544
              
              11
              
              15,682
              
              14,832
              
              6
 Retail
        revenues increased $40.5 million for the three months ended September 30,
        2007,
        compared to the same period in 2006 due to favorable weather, with an 8%
        increase in cooling degree days, new retail rates effective January 1, 2007,
        growth in the number of customers and higher usage per
        customer.  Retail revenues increased $83.2 million year to date
        September 30, 2007, compared to the same period in 2006 due to new retail
        rates
        effective January 1, 2007, growth in the number of customers and higher usage
        per customer.  Favorable winter and third quarter weather partially
        offset by a 29% decrease in cooling degree days in the second quarter of
        2007
        also contributed to the year to date increase in retail revenue.
  Wholesale
        revenues increased $15.6 million for the three months ended September 30,
        2007,
        compared to the same period in 2006 due to an 11% increase in the average
        market
        price per MWh to $41.99 and a 36% increase in wholesale MWh sales resulting
        from
        increased generation due to greater plant availability.  Wholesale
        revenues increased $14.6 million year to date September 30, 2007, compared
        to
        the same period in 2006 due to a 14% increase in wholesale MWh
        sales.  Wholesale MWh sales increased for both the second and third
        quarter of 2007 partially offset by a 20% decrease in wholesale MWh sales
        in the
        first quarter of 2007.  This first quarter decrease was the result of
        a 3% decrease in MWhs generated due to planned and unplanned plant outages
        as
        well as an increase in retail load.  These increases were slightly
        offset by $2.5 million in litigation recoveries received in 2006 for the
        loss of
        use of Hawthorn No. 5 from a 1999 boiler explosion.
  **Consolidated
        KCP&L Fuel and Purchased Power**
 **Three
                  Months Ended**
              
              
              
              **Year
                  to Date****September
                  30**
              
              **%**
              
              **September
                  30**
              **%****2007**
              
              **2006**
              
              **Change**
              
              **2007**
              
              **2006**
              
              **Change**Net
                  MWhs Generated by Fuel Type
              
              (thousands)
              
              
              
              (thousands)Coal
              
              4,232
              
              4,067
              
              4
              
              10,829
              
              10,945
              
              (1)Nuclear
              
              1,215
              
              1,216
              
              -
              
              3,638
              
              3,641
              
              -Natural
                  gas and oil
              
              280
              
              346
              
              (19)
              
              524
              
              522
              
              -Wind
              
              74
              
              24
              
              NM
              
              211
              
              24
              
              NMTotal
                  Generation
              
              5,801
              
              5,653
              
              3
              
              15,202
              
              15,132
              
              -
  For
        the
        three months ended September 30, 2007, KCP&L’s coal base load equivalent
        availability factor increased slightly to 89% from 88% compared to the same
        period in 2006.  The capacity factor, which reflects how much coal
        generation that is available is actually utilized by retail or sold wholesale,
        increased to 86% from 82% resulting in greater coal generation as there were
        fewer outages in the third quarter of 2007 compared to 2006.
  60
 Year
        to
        date September 30, 2007, KCP&L’s coal base load equivalent availability
        factor decreased to 78% from 82% compared to the same period in 2006, and
        the
        capacity factor also decreased to 74% from 75% reflecting the impact of planned
        and unplanned plant outages during the first half of 2007.
  Fuel
        expense decreased $0.7 million for the three months ended September 30, 2007,
        compared to the same period in 2006 due to less natural gas, which has higher
        cost compared to other fuel types, and more coal in the fuel mix partially
        offset by higher coal and coal transportation costs.  Fuel expense
        increased $8.1 million year to date September 30, 2007, compared to the same
        period in 2006 primarily due to higher coal and coal transportation
        costs.  Fuel expense for the three months ended and year to date
        September 30, 2006, was reduced by $3.7 million in Hawthorn No. 5 litigation
        recoveries.
  Purchased
        power expense increased $36.2 million for the three months ended September
        30,
        2007, compared to the same period in 2006 primarily due to a 284% increase
        in
        MWh purchases resulting from increased peak power purchases as lower natural
        gas
        prices allowed KCP&L to purchase power more economically than running
        natural gas-fired generation, slightly offset by a 29% decrease in the average
        price per MWh due to lower natural gas prices.  Purchased power
        expense increased $61.6 million year to date September 30, 2007, compared
        to the
        same period in 2006 primarily due to a 240% increase in MWh purchases to
        support
        increased retail load and the impact of planned and unplanned outages in
        the
        first half of 2007, slightly offset by a 12% decrease in the average price
        per
        MWh.  Purchased power expense for the three months ended and year to
        date September 30, 2006, was reduced by $10.8 million in Hawthorn No. 5
        litigation recoveries.
  **Consolidated
        KCP&L Other Operating Expenses *(including operating expenses –
KCP&L, maintenance, general taxes and other)***
 Consolidated
        KCP&L's other operating expenses increased $8.4 million for the three months
        ended September 30, 2007, compared to the same period in 2006 primarily due
        to
        the following:
  ·
              increased
                  pension expense of $4.6 million primarily due to the increased
                  level of
                  pension costs in KCP&L’s rates effective January 1,
                  2007,
  ·
              increased
                  transmission expenses of $1.6 million due to increased transmission
                  usage
                  charges as a result of the increased wholesale MWh sales and higher
                  Southwest Power Pool, Inc. (SPP)
                  fees,
  ·
              increased
                  property tax expense of $1.1 million due to increases in assessed
                  property
                  valuations and mill levies and
  ·
              increased
                  gross receipts tax expense of $1.3 million due to the increase
                  in
                  revenues.
  Consolidated
        KCP&L’s other operating expenses increased $36.5 million year to date
        September 30, 2007, compared to the same period in 2006 primarily due to
        the
        following:
  ·
              increased
                  pension expenses of $14.3 million due to the increased level of
                  pension
                  costs in KCP&L’s rates effective January 1,
                  2007,
  ·
              increased
                  plant operations and maintenance expenses of $8.8 million primarily
                  due to
                  planned and unplanned outages and the addition of the Spearville
                  Wind
                  Energy Facility in the third quarter of
                  2006,
  ·
              increased
                  labor expense of $2.1 million primarily due to filling open positions
                  subsequent to the skill set realignment
                  process,
  ·
              increased
                  transmission expenses of $5.1 million primarily due to increased
                  transmission usage charges as a result of the increased wholesale
                  MWh
                  sales and higher SPP fees,
  ·
              increased
                  gross receipts tax expense of $3.2 million due to the increase
                  in revenues
                  and
  61
 ·
              increased
                  equity compensation of $1.7
                  million.
  Partially
        offsetting the year to date increase in other operating expenses was decreased
        incentive compensation expense of $5.5 million.
  **Consolidated
        KCP&L Depreciation and Amortization**
 Consolidated
        KCP&L’s depreciation and amortization costs increased $5.6 million for the
        three months ended and $18.1 million year to date September 30, 2007, compared
        to the same periods in 2006 primarily due to additional amortization pursuant
        to
        2006 rate case orders of $3.0 million for the three months ended and $8.9
        million year to date September 30, 2007.  Additionally, depreciation
        increased $1.0 million and $4.6 million for the three months ended and year
        to
        date September 30, 2007, respectively, due to wind generation assets placed
        in
        service in the third quarter of 2006.
 
 **Consolidated
        KCP&L Interest Charges**
 Consolidated
        KCP&L’s interest charges increased $6.5 million year to date September 30,
        2007, compared to the same period in 2006 due to an increase in commercial
        paper
        borrowings.
 
 **Consolidated
        KCP&L Income Taxes**
 Consolidated
        KCP&L’s income taxes decreased $6.3 million for the three months ended
        September 30, 2007, compared to the same period in 2006, due to recognition
        of
        wind credits in the amount of $1.1 million, $2.3 million of income tax true
        ups
        and a $3.3 million increase in the allocation of tax benefits from holding
        company losses pursuant to Great Plains Energy’s intercompany tax allocation
        agreement.
  Consolidated
        KCP&L’s income taxes decreased $17.8 million year to date September 30,
        2007, compared to the same period in 2006 due to a decrease in pre-tax income,
        $3.8 million of wind credits, $2.3 million of income tax true ups and a $4.3
        million increase in the allocation of tax benefits from holding company losses
        pursuant to Great Plains Energy’s intercompany tax allocation
        agreement.
  **STRATEGIC
        ENERGY RESULTS OF OPERATIONS**
  The
        following table summarizes Strategic Energy's comparative results of
        operations.
 **Three
                  Months Ended**
              
              
              **Year
                  to Date****September
                  30**
              
              
              **September
                  30****2007**
              
              
              **2006**
              
              
              **2007**
              
              
              **2006**(millions)Operating
                  revenues
              
              $
              576.0
              
              
              $
              459.2
              
              
              $
              1,470.1
              
              
              $
              1,129.2Purchased
                  power
              
              
              (565.5
              )
              
              
              (462.3
              )
              
              
              (1,386.8
              )
              
              
              (1,117.4
              )Other
                  operating expenses
              
              
              (17.1
              )
              
              
              (16.6
              )
              
              
              (52.1
              )
              
              
              (42.5
              )Depreciation
                  and amortization
              
              
              (2.1
              )
              
              
              (1.9
              )
              
              
              (6.2
              )
              
              
              (5.8
              )Operating
                  income (loss)
              
              
              (8.7
              )
              
              
              (21.6
              )
              
              
              25.0
              
              
              
              (36.5
              )Non-operating
                  income and expenses
              
              
              0.8
              
              
              
              1.1
              
              
              
              3.0
              
              
              
              3.0Interest
                  charges
              
              
              (0.9
              )
              
              
              (0.6
              )
              
              
              (2.4
              )
              
              
              (1.5
              )Income
                  taxes
              
              
              4.7
              
              
              
              10.2
              
              
              
              (9.1
              )
              
              
              17.4Net
                  income (loss)
              
              $
              (4.1
              )
              
              $
              (10.9
              )
              
              $
              16.5
              
              
              $
              (17.6
              )
 Strategic
        Energy’s retail MWh deliveries increased 23% to 5.8 million for the three months
        ended and 22% to 15.1 million year to date September 30, 2007, compared to
        the
        same periods in 2006.
  62
 Strategic
        Energy had a net loss of $4.1 million for the three months ended September
        30,
        2007, compared to a net loss of $10.9 million for the same period in
        2006.  The after-tax loss from the changes in fair value related to
        non-hedging energy contracts and from hedge ineffectiveness decreased $4.3
        million in 2007 compared to 2006.  Strategic Energy also experienced
        higher bad debt expense mostly offset by lower employee-related
        expenses.
  Strategic
        Energy had net income of $16.5 million year to date September 30, 2007, compared
        to a net loss of $17.6 million for the same period in 2006 due to the impact
        of
        a $50.2 million after-tax increase in changes in fair value related to
        non-hedging energy contracts and from hedge
        ineffectiveness.  Partially offsetting this increase to net income was
        increased purchased power associated with a resettlement attributable to
        under-reported deliveries and the disposition of previously-acquired power
        at
        lower than contract prices caused by early terminations in the small business
        segment and the absence of supplier contract settlements.  Strategic
        Energy also experienced increased bad debt expense in the small business
        segment
        and recognized penalty expense related to the purchased power adjustment
        for
        under-reported deliveries.
  **Average
        Retail Gross Margin per MWh Without Fair Value Impacts**
 **Three
                  Months Ended**
              
              
              **Year
                  to Date****September
                  30**
              
              
              **September
                  30****2007**
              
              
              **2006**
              
              
              **2007**
              
              
              **2006**Average
                  retail gross margin per MWh
              
              $
              1.75
              
              
              $
              (0.79
              )
              
              $
              5.42
              
              
              $
              0.78Change
                  in fair value related to non-hedging energycontracts
                  and from cash flow hedge ineffectiveness
              
              
              3.30
              
              
              
              5.60
              
              
              
              (1.36
              )
              
              
              5.21Average
                  retail gross margin per MWh withoutfair
                  value impacts
              
              $
              5.05
              
              
              $
              4.81
              
              
              $
              4.06
              
              
              $
              5.99
  Average
        retail gross margin per MWh without fair value impacts is a non-GAAP financial
        measure that differs from GAAP because it excludes the impact of unrealized
        fair
        value gains or losses.  Fair value impacts result from changes in fair
        value of non-hedging energy contracts and from hedge ineffectiveness associated
        with MWhs under contract but not yet delivered.  By not reflecting the
        impact of unrealized fair value gains or losses, this non-GAAP financial
        measure
        does not reflect the volatility recognized in the Company’s consolidated
        statement of income as a result of the unrealized fair value gains or losses
        in
        the periods presented related to energy under contract for future delivery
        to
        customers.  The fair value of energy under contract but not yet
        delivered fluctuates from the time the contract is entered into until the
        energy
        is delivered to customers.  However, the ultimate value realized by
        Strategic Energy under the customer sales contracts is determined when the
        electricity supply contract settles at the originally contracted price at
        the
        time of delivery to customers.  Management and the Board of Directors
        use this as a measurement of Strategic Energy’s realized retail gross margin per
        delivered MWh, which are settled at contracted prices upon
        delivery.  Because certain of Strategic Energy’s derivative supply
        contracts do not meet the requirements for cash flow hedge designation and
        certain other derivative supply contracts designated as cash flow hedges
        have a
        level of ineffectiveness, Strategic Energy recognizes unrealized gains or
        losses
        during the term of these derivative supply contracts prior to delivery while
        the
        associated customer sales contracts are not subject to fair value accounting
        treatment and therefore do not result in unrecognized gains or losses being
        recorded during the term prior to delivery.  By removing these
        non-cash timing differences that occur during the term of the contracts prior
        to
        delivery and impact only one side of the overall buy-sell transaction,
        management believes this non-GAAP financial measure provides investors with
        a
        measure of average retail gross margin per MWh that more accurately reflects
        Strategic Energy’s realized margin on delivered MWhs.
 63
 As
        detailed in the table above, average retail gross margin per MWh without
        the
        impact of unrealized fair value gains and losses increased to $5.05 for the
        three months ended September 30, 2007, compared to $4.81 for the same period
        in
        2006 due to increased retail MWh deliveries to the small business segment,
        which
        has a higher margin, and lower customer acquisition costs.
  The
        average retail gross margin per MWh without the impact of unrealized fair
        value
        gains and losses decreased to $4.06 year to date September 30, 2007, compared
        to
        $5.99 for the same period in 2006.  This decrease is attributable to
        the disposition of previously-acquired power at lower than contracted prices
        caused by early terminations in the small business segment, increased purchased
        power expense associated with a resettlement attributable to under-reported
        deliveries and the absence of settlements of supplier
        contracts.  Partially offsetting these decreases was an increase in
        net SECA recoveries.
  **Strategic
        Energy Purchased Power**
 Purchased
        power is the cost component of Strategic Energy’s average retail gross
        margin.  Strategic Energy purchases electricity from power suppliers
        based on forecasted peak demand for its retail customers.  Actual
        customer demand does not always equate to the volume purchased based on
        forecasted peak demand.  Consequently, Strategic Energy makes
        short-term power purchases in the wholesale market when necessary to meet
        actual
        customer requirements.  Strategic Energy also sells any excess retail
        electricity supply over actual customer requirements back into the wholesale
        market.  These sales occur on many contracts, are usually short-term
        power sales (day ahead) and typically settle within the reporting
        period.  Excess retail electricity supply sales also include long-term
        and short-term forward physical sales to wholesale counterparties, which
        are
        accounted for on a mark-to-market basis.  Strategic Energy typically
        executes these transactions to manage basis and credit risks.  The
        proceeds from excess retail supply sales are recorded as a reduction of
        purchased power, as they do not represent the quantity of electricity consumed
        by Strategic Energy’s customers.  The amount of excess retail supply
        sales that reduced purchased power was $16.6 million for the three months
        ended
        and $47.9 million year to date September 30, 2007, compared to $1.6 million
        and
        $67.0 million for the same periods in 2006,
        respectively.  Additionally, in certain markets, Strategic Energy is
        required to sell to and purchase power from a RTO/ISO rather than directly
        transact with suppliers and end use customers.  The sale and purchase
        activity related to these certain RTO/ISO markets is reflected on a net basis
        in
        Strategic Energy’s purchased power.
  Strategic
        Energy utilizes derivative instruments, including forward physical delivery
        contracts, in the procurement of electricity.  Purchased power is also
        impacted by the net change in fair value related to non-hedging energy contracts
        and from cash flow hedge ineffectiveness.  Net changes in fair value
        increased purchased power expenses by $19.3 million for the three months
        ended
        September 30, 2007, compared to an increase of $26.6 million for the same
        period
        in 2006.  Net changes in fair value decreased purchased power expense
        by $20.5 million year to date September 30, 2007, compared to an increase
        of
        $64.5 million for the same period in 2006.  These changes are a result
        of volatility in the forward market prices for power combined with Strategic
        Energy designating more derivative instruments as cash flow hedges that no
        longer qualify for the NPNS election.  See Note 17 to the consolidated
        financial statements for more information.
  **Strategic
        Energy Other Operating Expenses *(including selling, general and
        administrative – non-regulated and general taxes)***
 Strategic
        Energy’s other operating expenses increased $0.5 million for the three months
        ended September 30, 2007, compared to the same period in 2006 primarily due
        to a
        $3.2 million increase in bad debt expense attributable to the small business
        segment, which has a higher default rate than Strategic Energy’s larger
        customers, mostly offset by lower employee-related expenses.
  64
 Strategic
        Energy’s other operating expenses increased $9.6 million year to date September
        30, 2007, compared to the same period in 2006 due to a $9.4 million increase
        in
        bad debt expense combined with penalty expense related to the purchased power
        adjustment for under-reported deliveries recorded in the first quarter of
        2007
        partially offset by lower employee-related expenses.
  **Strategic
        Energy Income Taxes**
 Strategic
        Energy had a tax benefit of $4.7 million for the three months ended September
        30, 2007, compared to a tax benefit of $10.2 million for the same period
        in 2006
        due to a decrease in pre-tax losses.  The deferred tax benefit related
        to the net changes in fair value related to non-hedging energy contracts
        and
        hedge ineffectiveness decreased $3.0 million for the three months ended
        September 30, 2007, compared to the same period in 2006.
  Strategic
        Energy had tax expense of $9.1 million year to date September 30, 2007, compared
        to a tax benefit of $17.4 million for the same period in 2006 due to pre-tax
        income year to date September 30, 2007, compared to a pre-tax loss for the
        same
        period in 2006.  The deferred tax expense related to the net changes
        in fair value related to non-hedging energy contracts and from hedge
        ineffectiveness was $8.3 million year to date September 30, 2007, compared
        to a
        tax benefit of $26.5 million for the same period in 2006.
  **GREAT
        PLAINS ENERGY AND CONSOLIDATED KCP&L SIGNIFICANT BALANCE SHEET CHANGES
        (September 30, 2007 compared to December 31, 2006)**
  ·
              Great
                  Plains Energy’s and consolidated KCP&L’s restricted cash increased
                  $147.0 million and $146.5 million, respectively, due to proceeds
                  from
                  KCP&L’s $146.5 million EIRR Bonds Series 2007A and 2007B issued in the
                  third quarter of 2007 being restricted for the repayment of $146.5
                  million
                  of Series 1998 A, B and D EIRR bonds on October 1,
                  2007.
  ·
              Great
                  Plains Energy’s and consolidated KCP&L’s receivables increased $136.3
                  million and $63.2 million, respectively.  KCP&L’s
                  receivables increased $46.3 million due to new retail rates effective
                  January 1, 2007, seasonal increases from higher summer tariff rates
                  and
                  usage and $12.1 million due to additional receivables from joint
                  owners
                  related to Comprehensive Energy Plan projects.  Strategic
                  Energy’s receivables increased $78.7 million due to seasonal increases
                  in
                  MWh deliveries at higher prices slightly offset by a higher allowance
                  for
                  doubtful accounts primarily due to an increase in the aging of
                  the small
                  business customer segment.
  ·
              Great
                  Plains Energy’s and consolidated KCP&L’s fuel inventories increased
                  $7.6 million primarily due to increased coal inventory due to plant
                  outages as well as increased coal and coal transportation
                  costs.
  ·
              Great
                  Plains Energy’s combined refundable income taxes and accrued taxes of a
                  net current liability of $58.9 million at September 30, 2007, increased
                  $44.6 million from December 31, 2006 due to an increase at consolidated
                  KCP&L.  Consolidated KCP&L’s refundable income taxes and
                  accrued taxes of a net current liability of $60.4 million at September
                  30,
                  2007, increased $49.5 million from December 31, 2006.  This
                  increase was due to higher property and income tax accruals partially
                  offset by a $6.0 million reclassification of an income tax receivable
                  from
                  other deferred charges.
  ·
              Great
                  Plains Energy’s derivative instruments, including current and deferred
                  liabilities, decreased $56.2 million primarily due to a $70.7 million
                  decrease in the fair value of Strategic Energy’s energy-related derivative
                  instruments as a result of increases in the forward market prices
                  for
                  power partially offset by an $18.9 million increase related to
                  the fair
                  value of FSS entered into in 2007 by Great Plains
                  Energy.
  65
 ·
              Great
                  Plains Energy’s and consolidated KCP&L’s construction work in progress
                  increased $173.5 million due to $196.8 million related to KCP&L’s
                  Comprehensive Energy Plan, including $49.4 million for environmental
                  upgrades and $147.4 million related to the construction of Iatan
                  No. 2
                  partially offset by normal construction activity as assets are
                  completed
                  and placed into service.
  ·
              Great
                  Plains Energy’s other deferred charges and other assets increased $16.1
                  million primarily due to deferred costs associated with Great Plains
                  Energy’s anticipated acquisition of
                  Aquila.
  ·
              Great
                  Plains Energy’s notes payable increased $86.0 million due to an increase
                  in consolidated KCP&L’s notes payable and borrowings on its short-term
                  credit facility used to settle a forward sale agreement for $12.3
                  million,
                  with the remainder due to the timing of cash
                  payments.  Consolidated KCP&L’s notes payable increased
                  $50.0 million due to a decrease in operating cash flows resulting
                  from
                  higher operating expense due to the impact of outages at KCP&L’s base
                  load generating units during the first half of 2007.  KCP&L
                  elected to make a cash borrowing on its short-term credit facility
                  as this
                  was a more economical option than issuing commercial
                  paper.
  ·
              Great
                  Plains Energy’s and consolidated KCP&L’s commercial paper increased
                  $52.2 million primarily due to a decrease in operating cash flows
                  resulting from higher operating expense due to the impact of outages
                  at
                  KCP&L’s base load generating units during the first half of
                  2007.
  ·
              Great
                  Plains Energy’s and consolidated KCP&L’s current maturities of
                  long-term debt decreased $389.1 million and $225.5 million, respectively,
                  due to Great Plains Energy’s settlement of the FELINE PRIDES Senior Notes
                  by issuing $163.6 million of common stock and KCP&L’s repayment of
                  $225.0 million 6.00% Senior Notes at
                  maturity.
  ·
              Great
                  Plains Energy’s and consolidated KCP&L’s accrued interest increased
                  $10.4 million and $6.6 million due to the timing of interest payments
                  and
                  an increase in interest accrued related to unrecognized tax
                  benefits.
  ·
              Great
                  Plains Energy’s and consolidated KCP&L’s accrued compensation and
                  benefits decreased $10.2 million and $2.7 million, respectively,
                  primarily
                  due to the 2007 payments of employee incentive compensation accrued
                  at
                  December 31, 2006, and lower incentive compensation expense during
                  2007.
  ·
              Great
                  Plains Energy’s and consolidated KCP&L’s other – deferred credits and
                  other liabilities increased $23.7 million and $20.6 million, respectively,
                  primarily due to a $19.5 million impact of the adoption of FIN
                  48, which
                  was mostly a reclassification from deferred income
                  taxes.
  ·
              Consolidated
                  KCP&L’s common stock increased $94.0 million due to an equity
                  contribution from Great Plains
                  Energy.
  ·
              Great
                  Plains Energy’s accumulated other comprehensive loss decreased $23.3
                  million primarily due to changes in the fair value of Strategic
                  Energy’s
                  energy-related derivative
                  instruments.
  ·
              Great
                  Plains Energy’s long-term debt increased $495.7 million due to Great
                  Plains Energy’s issuance of $100.0 million of 6.875% Senior Notes and an
                  increase at consolidated KCP&L.  Consolidated KCP&L’s
                  long-term debt increased $396.2 million reflecting the issuance
                  of $250.0
                  million of 5.85% Senior Notes and the issuance of $146.5 million
                  of EIRR
                  Bonds Series 2007A and 2007B.  The proceeds from the issuance of
                  $146.5 million EIRR Bonds Series 2007A and 2007B were used for
                  the
                  repayment of $146.5 million of Series 1998 A, B and D EIRR bonds
                  on
                  October 1, 2007.
  66
 **CAPITAL
        REQUIREMENTS AND LIQUIDITY**
  Great
        Plains Energy operates through its subsidiaries and has no material assets
        other
        than the stock of its subsidiaries.  Great Plains Energy’s ability to
        make payments on its debt securities and its ability to pay dividends is
        dependent on its receipt of dividends or other distributions from its
        subsidiaries and proceeds from the issuance of its securities.
  Great
        Plains Energy’s capital requirements are principally comprised of KCP&L’s
        utility construction and other capital expenditures, debt maturities and
        credit
        support provided to Strategic Energy.  These items as well as
        additional cash and capital requirements for the companies are discussed
        below.
  Great
        Plains Energy's liquid resources at September 30, 2007, consisted of $35.0
        million of cash and cash equivalents on hand, including $0.7 million at
        consolidated KCP&L, and $632.3 million of unused bank lines of
        credit.  The unused lines at September 30, 2007, consisted of $334.6
        million from KCP&L's revolving credit facility, $85.0 million from Strategic
        Energy’s revolving credit facility and $212.7 million from Great Plains Energy's
        revolving credit facility.  See the Debt Agreements section below for
        more information on these agreements.
  KCP&L
        currently expects to fund its Comprehensive Energy Plan expenditures from
        a
        combination of internal and external sources including, but not limited to,
        contributions from rate increases, capital contributions to KCP&L from Great
        Plains Energy's security issuances and new short and long-term debt
        financing.
  KCP&L
        expects to meet day-to-day cash flow requirements including interest payments,
        construction requirements (excluding its comprehensive energy plan), dividends
        to Great Plains Energy and pension benefit plan funding requirements, discussed
        below, with internally generated funds.  KCP&L may not be able to
        meet these requirements with internally generated funds because of the effect
        of
        inflation on operating expenses, the level of MWh sales, regulatory actions,
        compliance with environmental regulations and the availability of generating
        units.  The funds Great Plains Energy and consolidated KCP&L need
        to retire maturing debt will be provided from operations, the issuance of
        long
        and short-term debt and/or the issuance of equity or equity-linked
        instruments.  In addition, the Company may issue debt, equity and/or
        equity-linked instruments to finance growth or take advantage of new
        opportunities.
  Strategic
        Energy expects to meet day-to-day cash flow requirements including interest
        payments, credit support fees and capital expenditures with internally generated
        funds.  Strategic Energy may not be able to meet these requirements
        with internally generated funds because of the effect of inflation on operating
        expenses, the level of MWh sales, seasonal working capital requirements,
        commodity-price volatility and the effects of counterparty
        non-performance.
  In
        February 2007, Great Plains Energy entered into an agreement to acquire
        Aquila.  See Note 2 to the consolidated financial statements for
        additional information.
  **Cash
        Flows from Operating Activities**
 Great
        Plains Energy and consolidated KCP&L generated positive cash flows from
        operating activities for the periods presented.  Great Plains Energy’s
        cash flows from operating activities year to date September 30, 2007, decreased
        primarily due to lower net income at Strategic Energy after considering non-cash
        after-tax fair value impacts from energy contracts, an increase in receivables
        at Strategic Energy due to seasonal increases in MWh deliveries at higher
        prices
        and $12.1 million of costs associated with the anticipated acquisition of
        Aquila.  Other changes in working capital detailed in Note 3 to the
        consolidated financial statements also impacted operating cash
        flows.  Consolidated KCP&L’s cash flows from operating activities
        year to date September 30, 2007, increased primarily due to the changes in
        working capital detailed in Note 3 to the consolidated financial
        statements.  The timing of
        the
 67
 Wolf
        Creek outage affects the deferred refueling outage costs, deferred income
        taxes
        and amortization of nuclear fuel.  The individual components of
        working capital vary with normal business cycles and operations.
  **Cash
        Flows from Investing Activities**
 Great
        Plains Energy’s and consolidated KCP&L’s cash used for investing activities
        varies with the timing of utility capital expenditures and purchases of
        investments and nonutility property.  Investing activities are offset
        by the proceeds from the sale of properties and insurance
        recoveries.  Great Plains Energy’s and consolidated KCP&L’s cash
        flows from investing activities decreased $167.9 million and $161.6 million,
        respectively, year to date September 30, 2007, compared to the same period
        in
        2006 primarily due to the $146.5 million of proceeds from KCP&L’s EIRR Bonds
        Series 2007A and 2007B issued in the third quarter of 2007 being restricted
        for
        the repayment of $146.5 million of Series 1998 A, B and D EIRR bonds on October
        1, 2007.  Additionally in 2006, KCP&L received $15.8 million of
        litigation recoveries related to Hawthorn No. 5.
  **Cash
        Flows from Financing Activities**
 Great
        Plains Energy’s cash flows from financing activities year to date September 30,
        2007, reflect consolidated KCP&L’s repayment and issuance of Senior Notes;
        an issuance, at a discount, of $100.0 million of 6.875% Senior Notes that
        mature
        in 2017, an increase in short-term borrowings and the $12.3 million settlement
        of an equity forward contract at Great Plains Energy.  Consolidated
        KCP&L’s financing activities year to date September 30, 2007, reflect
        KCP&L’s repayment of its $225.0 million 6.00% Senior Notes at maturity;
        issuance, at a discount, of $250.0 million 5.85% Senior Notes that mature
        in
        2017, issuance of $146.5 million of EIRR Bonds Series 2007A and 2007B and
        an
        increase in short-term borrowings.  Consolidated KCP&L’s
        short-term borrowings have increased primarily due to a decrease in operating
        cash flows year to date September 30, 2007, resulting from higher operating
        expense due to the impact of outages at KCP&L’s base load generating units
        in the first half of 2007.
  **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 2005, the MPSC
        authorized KCP&L to issue up to $635.0 million of long-term debt and to
        enter into interest rate hedging instruments in connection with such debt
        through December 31, 2009.  KCP&L has $135.0 million of
        authorization remaining.
  During
        2006, FERC authorized KCP&L to issue up to a total of $600.0 million in
        outstanding short-term debt instruments through February 2008.  The
        authorizations are 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.  In October 2007, KCP&L filed
        an application with FERC to increase the authorization to $800.0 million
        for a
        two-year period following the effective date of a FERC order granting such
        authorization.
  68
 **Significant
        Financing Activities**
 ***Great
        Plains Energy***
 In
        the
        third quarter of 2007, Great Plains Energy issued $100.0 million of 6.875%
        unsecured Senior Notes.  Great Plains Energy used the proceeds to make
        a $94.0 million equity contribution to KCP&L.
  In
        2006,
        Great Plains Energy entered into a forward sale agreement with Merrill Lynch
        Financial Markets, Inc. (forward purchaser) for 1.8 million shares of Great
        Plains Energy common stock.  In April 2007, Great Plains Energy
        elected to terminate the forward sale agreement and settle it in
        cash.  Based on the difference between Great Plains Energy’s average
        stock price of $32.60 over the period used to determine the settlement and
        the
        then-applicable forward price of $25.58, Great Plains Energy paid $12.3 million
        to Merrill Lynch Financial Markets, Inc.
  ***KCP&L***
 In
        the
        third quarter of 2007, KCP&L’s $146.5 million of unsecured EIRR Bonds Series
        2007A and 2007B were issued.  The bonds mature on September 1, 2035,
        and will bear interest as determined through 35-day auction
        periods.  The initial interest rate was 4.05%.  The EIRR
        Bonds Series 2007A and 2007B are covered by a municipal bond insurance policy
        issued by FGIC.  The insurance agreement between KCP&L and FGIC
        provides for reimbursement by KCP&L for any amounts that FGIC pays under the
        municipal bond insurance policy.  The insurance policy is in effect
        for the term of the bonds.  The policy also restricts the amount of
        secured debt KCP&L may issue.  In the event that KCP&L issues
        debt secured by liens not permitted by the agreement, KCP&L is required to
        issue and deliver to FGIC first mortgage bonds or similar securities equal
        in
        principal amount to the principal amount of the EIRR Bonds Series 2007A and
        2007B then outstanding.  The proceeds from the issuance of $146.5
        million EIRR Bonds Series 2007A and 2007B were used for the repayment of
        $146.5
        million of Series 1998 A, B and D EIRR bonds on October 1, 2007.
  In
        the
        second quarter of 2007, KCP&L issued $250.0 million of 5.85% unsecured
        Senior Notes.  The proceeds from this issuance were used to repay a
        short-term intercompany loan from Great Plains Energy.  KCP&L used
        the proceeds from the intercompany loan to repay its $225.0 million unsecured
        6.00% Senior Notes at maturity.
  In
        January 2007, KCP&L received authorization from FERC, as part of its
        aggregate $600.0 million short-term debt authorization, to issue an aggregate
        of
        $150 million of short-term debt in connection with participation in the Great
        Plains Energy money pool for a period of three years.  The money pool
        was an internal financing arrangement in which up to $150 million of funds
        deposited into the money pool by Great Plains Energy and Strategic Energy
        could
        be lent on a short-term basis to KCP&L.  The money pool was
        terminated in July 2007.
  **Debt
        Agreements**
 See
        Note
        7 to the consolidated financial statements for discussion of Great Plains
        Energy’s, KCP&L’s and Strategic Energy’s revolving credit
        facilities.  Strategic Energy’s facility contains a Material Adverse
        Change (MAC) clause that requires Strategic Energy to represent prior to
        receiving funding, that no MAC has occurred.
  In
        October 2007, Strategic Energy terminated its $135 million revolving credit
        facility with a group of banks, expiring in June 2009, and entered into a
        new
        revolving credit facility with a group of banks, expiring in October
        2010.  The new facility provides for loans and letters of credit not
        exceeding an aggregate of the lesser of $50 million or the borrowing base,
        which
        is generally 85% of Strategic Energy’s retail accounts receivables plus the
        amount of a Great Plains Energy guarantee.  Great Plains Energy issued
        an initial guarantee in the amount of $12.5 million and may increase the
        guarantee up to a maximum of $27.5 million to increase the borrowing base
        or to
        cure a default of the minimum fixed charge coverage ratio, provided that
        Great
        Plains Energy maintains certain favorable ratings on its
 69
 senior
        unsecured debt.  Under the terms of the agreement, Strategic Energy is
        required to maintain, as of the end of each quarter, a minimum fixed charge
        coverage ratio of at least 1.05 to 1.0 and a minimum EBITDA, as defined in
        the
        agreement, for the four quarters then ended of $15 million through March
        31,
        2008, and thereafter increasing to $17.5 million (through September 30, 2008),
        $20 million (through March 31, 2009) and $22.5 million through
        maturity.
  At
        the
        same time, Strategic Energy entered into an agreement to sell its current
        and
        future retail accounts receivable to its wholly owned subsidiary, Strategic
        Receivables, LLC (Strategic Receivables), which in turn sells undivided
        percentage ownership interests in the accounts receivable to Market Street
        Funding LLC (Market Street) and Fifth Third Bank ratably based on each
        purchaser’s commitments.  Strategic Energy sells its receivables at a
        price equal to the amount of the accounts receivable less a discount based
        on
        the prime rate and days sales outstanding (as defined in the
        agreement).  Strategic Receivables may also issue letters of credit to
        Strategic Energy, with the amount of such letters of credit being credited
        against the purchase price.  Market Street’s and Fifth Third Bank’s
        obligation to purchase accounts receivable is limited to $112.5 million and
        $62.5 million, respectively, less the proportionate aggregate amount of letters
        of credit issued pursuant to the agreement.  Strategic Energy services
        the receivables and receives an annual servicing fee of 1.0% times the daily
        average aggregate outstanding balance of receivables. Strategic
        Energy transferred its outstanding letters of credit under the terminated
        revolving credit facility totaling $49.8 million to the receivables facility
        upon termination.
  **Credit
        Ratings**
 None
        of
        the companies’ outstanding debt, except for the notes associated with affordable
        housing investments, requires the acceleration of interest and/or principal
        payments in the event of a ratings downgrade, unless the downgrade occurs
        in the
        context of Great Plains Energy or KCP&L entering into a merger,
        consolidation or sale.  In the event of a downgrade, the companies
        and/or their subsidiaries may be subject to increased interest costs on their
        credit facilities.  The anticipated acquisition of Aquila will not be
        a merger, consolidation or sale that would trigger acceleration of interest
        and/or principal payments.
  **Pensions**
 The
        Company maintains defined benefit plans for substantially all employees of
        KCP&L, Services and WCNOC and incurs significant costs in providing the
        plans, with the majority incurred by KCP&L.  All plans meet the
        funding requirements of the Employee Retirement Income Security Act of 1974
        (ERISA) with additional contributions made when deemed financially
        advantageous.
  Year
        to
        date September 30, 2007, the Company contributed $25.9 million to the plans
        and
        an additional $6.8 million is expected to be contributed during the remainder
        of
        2007, all paid by KCP&L. Management believes KCP&L has adequate access
        to capital resources through cash flows from operations or through existing
        lines of credit to support the funding requirements.
  Under
        the
        terms of the pension plans, the Company reserves the right to amend or terminate
        the plans.  See Note 10 to the consolidated financial statements for
        additional information regarding plan amendments.
 
 **Strategic
        Energy Supplier Concentration and Credit**
 Strategic
        Energy enters into forward physical contracts with multiple
        suppliers.  At September 30, 2007, Strategic Energy’s five largest
        suppliers under forward supply contracts represented 70% of the total future
        dollar committed purchases.  The five largest suppliers, or their
        guarantors, are rated investment grade.  In the event of supplier
        non-delivery or default, Strategic Energy’s results of operations could be
        affected to the extent the cost of replacement power exceeded the combination
        of
        the contracted price with the supplier and the amount of collateral held
        by
        Strategic Energy to mitigate its credit risk with the supplier.  In
        addition to the collateral, if any, that the supplier provides, Strategic
        Energy’s risk may be
 70
 further
        mitigated by the obligation of the supplier to make a default payment equal
        to
        the shortfall and to pay liquidated damages in the event of a failure to
        deliver
        power.  There is no assurance that the supplier in such an instance
        would make the default payment and/or pay liquidated
        damages.  Strategic Energy’s results of operations and financial
        position could also be affected, in a given period, if it were required to
        make
        a payment upon termination of a supplier contract to the extent the contracted
        price with the supplier exceeded the market value of the contract at the
        time of
        termination.
  The
        following tables provide information on Strategic Energy’s credit exposure to
        suppliers, net of collateral, at September 30, 2007.
 **Number
                  Of**
              
              **Net
                  Exposure Of****Counterparties**
              
              **Counterparties****Exposure**
              
              
              
              
              
              
              
              **Greater
                  Than**
              
              **Greater
                  Than****Before
                  Credit**
              
              **Credit**
              
              
              **Net**
              
              
              **10%
                  Of Net**
              
              **10%
                  of Net****Rating**
              **Collateral**
              
              **Collateral**
              
              
              **Exposure**
              
              
              **Exposure**
              
              **Exposure**External
                  rating
              
              (millions)
              
              
              
              
              
              (millions)Investment
                  Grade
              
              $
              1.8
              
              
              $
              -
              
              
              $
              1.8
              
              
              
              2
              
              
              $
              1.8Non-Investment
                  Grade
              
              
              7.2
              
              
              
              6.2
              
              
              
              1.0
              
              
              
              1
              
              
              
              1.0Internal
                  ratingNon-Investment
                  Grade
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Total
              
              $
              9.0
              
              
              $
              6.2
              
              
              $
              2.8
              
              
              
              3
              
              
              $
              2.8
 **Maturity
                  Of Credit Risk Exposure Before Credit Collateral****Less
                  Than**
              
              
              
              **Total****Rating**
              **2
                  Years**
              **2
                  - 5 Years**
              **Exposure**External
                  rating
              
              (millions)Investment
                  Grade
              
              $
              0.9
              
              
              $
              0.9
              
              
              $
              1.8Non-Investment
                  Grade
              
              
              4.3
              
              
              
              2.9
              
              
              
              7.2Internal
                  ratingNon-Investment
                  Grade
              
              
              -
              
              
              
              -
              
              
              
              -Total
              
              $
              5.2
              
              
              $
              3.8
              
              
              $
              9.0
 External
        ratings are determined by using publicly available credit ratings of the
        counterparty.  If a counterparty has provided a guarantee by a higher
        rated entity, the determination has been based on the rating of its
        guarantor.  Internal ratings are determined by, among other things, an
        analysis of the counterparty’s financial statements and consideration of
        publicly available credit ratings of the counterparty’s
        parent.  Investment grade counterparties are those with a minimum
        senior unsecured debt rating of BBB- from Standard & Poor’s or Baa3 from
        Moody’s Investors Service.  Exposure before credit collateral has been
        calculated considering all netting agreements in place, netting accounts
        payable
        and receivable exposure with net mark-to-market exposure.  Exposure
        before credit collateral, after consideration of all netting agreements,
        is
        impacted significantly by the power supply volume under contract with a given
        counterparty and the relationship between current market prices and contracted
        power supply prices.  Credit collateral includes the amount of cash
        deposits and letters of credit received from counterparties.  Net
        exposure has only been calculated for those counterparties to which Strategic
        Energy is exposed and excludes counterparties exposed to Strategic
        Energy.
  71
 At
        September 30, 2007, Strategic Energy had exposure before collateral to
        non-investment grade counterparties totaling $7.2 million, of which $4.3
        million
        is scheduled to mature in less than two years.  In addition, Strategic
        Energy held collateral totaling $6.2 million limiting its exposure to these
        non-investment grade counterparties to $1.0 million.
  Strategic
        Energy contracts with national and regional counterparties that have direct
        supplies and assets in the region of demand.  Strategic Energy also
        manages its counterparty portfolio through disciplined margining, collateral
        requirements and contract-based netting of credit exposures against payable
        balances.
  **Supplemental
        Capital Requirements and Liquidity Information**
 Great
        Plains Energy’s and consolidated KCP&L’s contractual obligations for
        KCP&L’s Comprehensive Energy Plan were $140.5 million for the remainder of
        2007 and $472.4 million, $135.9 million and $14.0 million for the years 2008
        through 2010, respectively.  Great Plains Energy’s and consolidated
        KCP&L’s other contractual obligations have not significantly changed outside
        of the ordinary course of business at September 30, 2007, compared to December
        31, 2006.
  Great
        Plains Energy and consolidated KCP&L adopted the provisions of FASB
        Interpretation No. 48, “Accounting for Uncertainty in Income Taxes,” an
        interpretation of SFAS No. 109, ”Accounting for Income Taxes” on January 1,
        2007.  At September 30, 2007, the total liability for unrecognized tax
        benefits for Great Plains Energy and consolidated KCP&L was $21.6 million
        and $19.5 million, respectively.  Great Plains Energy and consolidated
        KCP&L are unable to determine reasonably reliable estimates of the period of
        cash settlement with the respective taxing authorities.
  **Off-Balance
        Sheet Arrangements**
 In
        the
        normal course of business, Great Plains Energy and certain of its subsidiaries
        enter into various agreements providing financial or performance assurance
        to
        third parties on behalf of certain subsidiaries.  Such agreements
        include, for example, guarantees, stand-by letters of credit and surety
        bonds.  These agreements are entered into primarily to support or
        enhance the creditworthiness otherwise attributed to a subsidiary on a
        stand-alone basis, thereby facilitating the extension of sufficient credit
        to
        accomplish the subsidiaries’ intended business purposes.  Great Plains
        Energy’s guarantees provided on behalf of Strategic Energy for its power
        purchases and regulatory requirements increased $79.0 million to $337.7 million
        at September 30, 2007, compared to $258.7 million at December 31,
        2006.  This increase is comprised of $31.4 million in direct
        guarantees and $47.6 million in letters of credit and is due to a combination
        of
        higher collateral requirements at Strategic Energy and more emphasis on using
        Great Plains Energy’s facilities for credit support due to its lower cost than
        Strategic Energy’s credit facility.  Consolidated KCP&L’s
        guarantees were unchanged at September 30, 2007, compared to December 31,
        2006.
  **New
        Accounting Standards**
 See
        Note
        19 of the consolidated financial statements for information regarding new
        accounting standards.
  72
 **ITEM
        3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
        RISK**
  Great
        Plains Energy and consolidated 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 consolidated 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 2006 Form 10-K and therefore are not represented
        here.
  Great
        Plains Energy and consolidated 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 2006 Form 10-K of each of Great Plains Energy and
        KCP&L, incorporated herein by reference.
  Strategic
        Energy maintains a commodity-price risk management strategy that uses derivative
        instruments including forward physical energy purchases, to minimize
        significant, unanticipated net income fluctuations caused by commodity-price
        volatility.  In certain markets where Strategic Energy operates,
        entering into forward fixed price contracts is cost
        prohibitive.  Financial derivative instruments, including swaps, are
        used to limit the unfavorable effect that price increases will have on
        electricity purchases, effectively fixing the future purchase price of
        electricity for the applicable forecasted usage and protecting Strategic
        Energy
        from significant price volatility.  At September 30, 2007, a
        hypothetical 10% increase in the market price of purchased power could result
        in
        a $3.6 million increase in purchased power expense for the remainder of
        2007.
  **ITEM
        4.  CONTROLS AND PROCEDURES**
  **Disclosure
        Controls and Procedures**
 Great
        Plains Energy carried out evaluations of its disclosure controls and procedures
        (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange
        Act of
        1934, as amended) as of the end of the fiscal quarter ended September 30,
        2007.  These evaluations were conducted under the supervision, and
        with the participation, of the company’s management, including the chief
        executive officer, chief financial officer and the 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
        are functioning effectively to provide reasonable assurance that: (i) the
        information required to be disclosed by the company in the reports that it
        files
        or submits under the Securities Exchange Act of 1934, as amended, is recorded,
        processed, summarized and reported within the time periods specified in the
        SEC’s rules and forms, and (ii) the information required to be disclosed by the
        company in the reports that it files or submits under the Securities Exchange
        Act of 1934, as amended, is accumulated and communicated to management,
        including the principal executive and principal financial officers, as
        appropriate to allow timely decisions regarding required
        disclosure.
  **Changes
        in Internal Control Over Financial Reporting**
 There
        has
        been no change in Great Plains Energy’s internal control over financial
        reporting that occurred during the quarterly period ended September 30, 2007,
        that has materially affected, or is reasonably likely to materially affect,
        the
        company’s internal control over financial reporting.
  73
 **ITEM
        4T.  CONTROLS AND PROCEDURES**
  **Disclosure
        Controls and Procedures**
 KCP&L
        carried out evaluations of its disclosure controls and procedures (as defined
        in
        Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as
        amended) as of the end of the fiscal quarter ended September 30,
        2007.  These evaluations were conducted under the supervision, and
        with the participation, of the company’s management, including the chief
        executive officer, chief financial officer and the disclosure
        committee.
  Based
        upon these evaluations, the chief executive officer and chief financial officer
        of KCP&L have concluded as of the end of the period covered by this report
        that the disclosure controls and procedures of KCP&L are functioning
        effectively to provide reasonable assurance that: (i) the information required
        to be disclosed by the company in the reports that it files or submits under
        the
        Securities Exchange Act of 1934, as amended, is recorded, processed, summarized
        and reported within the time periods specified in the SEC’s rules and forms, and
        (ii) the information required to be disclosed by the company in the reports
        that
        it files or submits under the Securities Exchange Act of 1934, as amended,
        is
        accumulated and communicated to management, including the principal executive
        and principal financial officers, as appropriate to allow timely decisions
        regarding required disclosure.
  **Changes
        in Internal Control Over Financial Reporting**
 There
        has
        been no change in KCP&L’s internal control over financial reporting that
        occurred during the quarterly period ended September 30, 2007, that has
        materially affected, or is reasonably likely to materially affect, the company’s
        internal control over financial reporting.
  **PART
        II *–*OTHER INFORMATION**
  **ITEM
        1.  LEGAL PROCEEDINGS**
  **KCP&L
        Missouri 2007 Rate Case**
 On
        February 1, 2007, KCP&L filed a retail rate case with the MPSC, requesting
        an annual rate increase effective January 1, 2008, of approximately $45 million
        over current levels.  In July 2007, the MPSC Staff filed its case
        regarding KCP&L’s rate request.  In its filing, the Staff asserted
        that KCP&L’s annual revenues should be increased by $0.7 million, before
        adjustments resulting from the September 30, 2007, true-up of test year
        information.  The Staff’s filing assumed adjustments resulting from
        this true-up would increase revenue requirements by $14 million, resulting
        in a
        required increase in annual revenues of $14.7 million.  This amount
        reflects approximately $15 million to $17 million in accelerated depreciation,
        which the Staff asserts will maintain certain KCP&L credit ratios at
        investment-grade levels as provided for in the stipulation and agreement
        approved by the MPSC in 2005.  Evidentiary hearings were held in
        October 2007, and true-up hearings are anticipated in November
        2007.  A decision is expected in December 2007.
  **KCP&L
        Kansas 2007 Rate Case**
 On
        March
        1, 2007, KCP&L filed a rate increase request with KCC, requesting an
        additional approximate $47 million in annual revenues, with approximately
        $13
        million of that amount treated for accounting purposes as an increase to
        KCP&L’s depreciation reserve.  KCP&L reached a negotiated
        settlement of its request with certain parties to the rate proceedings, and
        on
        September 12, 2007, filed a Joint Stipulation and Agreement (Agreement)
        containing the settlement with KCC.
  The
        parties to the Agreement are KCP&L, the Staff of the KCC, and the Citizens’
Utility Ratepayers Board (CURB).  The Agreement stipulates a $28
        million increase in annual revenues effective January 1, 2008, with $11 million
        of that amount treated for accounting purposes as an increase to KCP&L’s
        depreciation reserve.  The Agreement also recommends an ECA
        tariff.  The ECA tariff will reflect the projected annual amount of
        fuel, purchased power, emission allowances and transmission costs and
        asset-based off-system sales margin.  The ECA tariff provides that
        these projected amounts are subject
 74
 to
        quarterly re-forecasts.  Any difference between the ECA revenue
        collected and the actual ECA amounts for a given year (which may be positive
        or
        negative) will be recovered over twelve months beginning April 1 of the
        succeeding year.
  The
        Agreement recommends various other provisions, including but not limited
        to:
        (i)  establishing an energy efficiency rider as an interim mechanism
        to recover deferred costs incurred for affordability, energy efficiency and
        demand side management programs; (ii) establishing for regulatory purposes
        annual pension cost for the period beginning January 1, 2008, of approximately
        $40 million ($18 million on a Kansas jurisdictional basis), before amounts
        capitalized and amounts billed to the other joint owners of KCP&L’s power
        plants, through the creation of a regulatory asset or liability, as appropriate;
        (iii) amortizing over ten years the costs incurred in 2006 of approximately
        $9
        million ($4 million on a Kansas jurisdictional basis) associated with skill
        set
        realignment; and (iv) setting at 8.3% the equity rate used to calculate the
        equity component of the allowance for funds used during construction rate
        calculation for Iatan 2 as of January 1, 2008.  The treatment of
        pension costs in the Agreement is consistent with KCP&L’s last Kansas rate
        order.
  The
        Agreement is subject to KCC approval, and is voidable if not approved in
        its
        entirety.  It is possible that the KCC may approve the Agreement with
        changes, or may not approve the Agreement.  A decision is expected in
        December 2007.
  **Aquila
        Transaction Proceedings**
 On
        April
        4, 2007, Great Plains Energy, KCP&L and Aquila submitted joint applications
        to the MPSC and KCC seeking approval of the proposed acquisition by Great
        Plains
        Energy of Aquila.  In the MPSC filing, the companies requested that
        Aquila be authorized to use an additional amortization mechanism to maintain
        credit ratios once Aquila achieves financial metrics necessary to support
        an
        investment-grade credit rating.  Aquila and KCP&L also requested
        authorization to amortize transaction and incremental transition-related
        costs
        over five years, and to collectively retain for a five year period 50 percent
        of
        estimated synergy savings resulting from the transaction.  Aquila
        further requested approval to transfer to Great Plains Energy approximately
        $677
        million of the proceeds from the sale of its non-Missouri utility operations
        to
        Black Hills to fund substantially all of the cash portion of the merger
        consideration payable to its shareholders by Great Plains Energy.  In
        the KCC filing, KCP&L requested similar regulatory treatment of costs and
        synergies.  In updates filed with the MPSC and KCC on August 8, 2007,
        Great Plains Energy and KCP&L currently propose to retain for a five year
        period 50 percent of the estimated utility operational synergies, net of
        estimated transition costs.  The MPSC Staff has filed testimony
        asserting that the transaction is detrimental to the public interest and
        should
        not be approved.  Other parties in the MPSC case have asserted that
        the transaction should not be approved, or approved with
        conditions.  Evidentiary hearings are scheduled for December in
        Missouri and January 2008 in Kansas, with decisions expected in the first
        quarter of 2008.
  On
        May
        25, 2007, Great Plains Energy, KCP&L, Aquila and Black Hills filed a joint
        application (which was amended in June 2007) with FERC seeking approval of
        the
        proposed acquisition by Great Plains Energy of Aquila and certain Aquila
        Colorado electric assets by Black Hills, and for a declaratory order that
        the
        transfer of proceeds from Aquila to Great Plains Energy will not constitute
        a
        payment of funds properly included in a capital account in a manner contrary
        to
        the Federal Power Act.  On October 18, 2007, the FERC granted the
        joint application.  Great Plains Energy and Aquila submitted their
        respective Hart-Scott-Rodino pre-merger notifications in July 2007 relating
        to
        the acquisition of Aquila by Great Plains Energy, and received early termination
        of the waiting period on August 27, 2007.
 75
 Two
        purported shareholder class action lawsuits were filed against Aquila and
        certain of its individual directors and officers on February 8, 2007, in
        Jackson
        County, Missouri, Circuit Court seeking, among other things, an injunction
        against the consummation of the proposed transaction.  The lawsuits
        allege, among other things, breaches of fiduciary duties and self-dealing
        by
        Aquila directors and officers.  In July 2007, the plaintiff in one of
        the suits amended his petition to include Great Plains Energy and Black Hills
        as
        defendants, alleging that they aided and abetted alleged breaches of fiduciary
        duties by the named Aquila directors and officers.  On July 26, 2007,
        the Court consolidated the two cases and directed plaintiffs to file a
        Consolidated Petition, which was done on August 31, 2007.  Aquila,
        Great Plains Energy and Black Hills filed motions to dismiss this case, which
        were granted on October 29, 2007.  Plaintiffs have 30 days to appeal
        the dismissal.
  **Weinstein
        v. KLT Telecom**
 Richard
        D. Weinstein (Weinstein) filed suit against KLT Telecom Inc. (KLT Telecom)
        in
        September 2003 in the St. Louis County, Missouri Circuit Court.  KLT
        Telecom acquired a controlling interest in DTI Holdings, Inc. (Holdings)
        in
        February 2001 through the purchase of approximately two-thirds of the Holdings
        stock held by Weinstein.  In connection with that purchase, KLT
        Telecom entered into a put option in favor of Weinstein, which granted Weinstein
        an option to sell to KLT Telecom his remaining shares of Holdings
        stock.  The put option provided for an aggregate exercise price for
        the remaining shares equal to their fair market value with an aggregate floor
        amount of $15 million and was exercisable between September 1, 2003, and
        August
        31, 2005.  In June 2003, the stock of Holdings was cancelled and
        extinguished pursuant to the joint Chapter 11 plan confirmed by the Bankruptcy
        Court.  In September 2003, Weinstein delivered a notice of exercise of
        his claimed rights under the put option.  KLT Telecom rejected the
        notice of exercise, and Weinstein filed suit alleging breach of
        contract.  Weinstein sought damages of at least $15 million, plus
        statutory interest.  In April 2005, summary judgment was granted in
        favor of KLT Telecom, and Weinstein appealed this judgment to the Missouri
        Court
        of Appeals for the Eastern District.  On May 16, 2006, the Court of
        Appeals affirmed the judgment.  Weinstein filed a motion for transfer
        of this case to the Missouri Supreme Court, which was granted.  On May
        29, 2007, the Supreme Court reversed the summary judgment and remanded the
        case
        to the trial court.  On July 26, 2007, Weinstein filed a renewed
        Motion for Summary Judgment and KLT Telecom responded in opposition on August
        28, 2007.  A hearing on the motion is anticipated to occur in the
        fourth quarter of 2007.  A $15 million reserve was recorded in 2001
        for this matter.
 
 **Other
        Proceedings**
 The
        companies are parties to various other lawsuits and regulatory proceedings
        in
        the ordinary course of their respective businesses.  For information
        regarding other lawsuits and proceedings, see Notes 6, 14 and 15 to the
        consolidated financial statements.  Such descriptions are incorporated
        herein by reference.
  76
 **ITEM
        1A.  RISK FACTORS**
  Actual
        results in future periods for Great Plains Energy and consolidated KCP&L
        could differ materially from historical results and the forward-looking
        statements contained in this report.  Factors that might cause or
        contribute to such differences include, but are not limited to, those discussed
        below and in Item 1A. Risk Factors included in the 2006 Form 10-K of each
        of
        Great Plains Energy and KCP&L.  The companies’ businesses are
        influenced by many factors that are difficult to predict, involve uncertainties
        that may materially affect actual results, and are often beyond the companies’
control.  Additional risks and uncertainties not presently known or
        that the companies’ management currently believes to be immaterial may also
        adversely affect the companies.  The information presented below
        updates certain of the risk factors described in the 2006 Form 10-K of each
        of
        Great Plains Energy and KCP&L.  This information, as well as the
        other information included in this report and in the other documents filed
        with
        the SEC, should be carefully considered before making an investment in the
        securities of Great Plains Energy and KCP&L.  Risk factors of
        consolidated KCP&L are also risk factors for Great Plains
        Energy.
  **The
        Company has Regulatory Risks**
 The
        Company is subject to extensive federal and state regulation.  Failure
        to obtain adequate rates or regulatory approvals, in a timely manner, adoption
        of new regulations by federal or state agencies, or changes to current
        regulations and interpretations of such regulations may materially affect the
        Company’s business and its results of operations and financial
        position.
  In
        October 2007, the MPSC adopted rules requiring vegetation management programs
        and periodic inspections of transmission and distribution
        facilities.  The vegetation management rules require periodic
        inspections and completion of tree trimming cycles every four years in urban
        areas and every six years in rural areas.  The transmission and
        distribution facilities inspection rules require periodic inspections of,
        and
        any necessary repairs to, these facilities.  Electric utilities may
        request to defer the costs incurred in implementing these rules, above the
        levels reflected in rates, for possible recovery in future rate
        cases.  KCP&L currently expects that the costs of implementing
        these rules will not be material to its results of operation or financial
        condition.
  **The
        outcome of KCP&L’s pending and future retail rate proceedings could have a
        material impact on its business and are largely outside its
        control.**
 The
        rates
        that KCP&L is allowed to charge its customers are the single most important
        item influencing its results of operations, financial position and
        liquidity.  These rates are subject to the determination, in large
        part, of governmental entities outside of KCP&L’s control, including the
        MPSC, KCC and FERC.  Decisions made by these entities could have a
        material impact on KCP&L’s business including its results of operations and
        financial position.
  In
        February 2007, KCP&L filed a request with the MPSC to increase the annual
        rates charged to its retail customers in Missouri by approximately $45
        million.  KCP&L and certain parties filed a negotiated stipulation
        and agreement with the KCC in September 2007 to increase the annual rates
        it is
        permitted to charge its Kansas retail customers by approximately $28
        million.  The requested rate increases are subject to the approvals of
        the MPSC and KCC, respectively, which are expected to rule on the requests
        in
        December 2007, with any rate changes taking effect on January 1,
        2008.  It is possible that the MPSC and/or KCC will authorize a lower
        rate increase than what KCP&L has requested, or no increase or a rate
        reduction.  Additionally, the December 2006 order of the MPSC
        authorizing an increase in annual rates of approximately $51 million has
        been
        appealed in the Missouri courts.  It is possible that the MPSC order
        could be vacated and the proceedings remanded to the MPSC.  Management
        cannot predict or provide any assurances regarding the outcome of these
        proceedings.
  77
 As
        a part
        of the Missouri and Kansas stipulations approved by the MPSC and KCC in 2005,
        KCP&L began implementation of its Comprehensive Energy
        Plan.  Under the Comprehensive Energy Plan, KCP&L agreed to
        undertake certain projects, including building and owning a portion of Iatan
        No.
        2, installing a new wind-powered generating facility, installing environmental
        upgrades to certain existing plants, infrastructure improvements and demand
        management, distributed generation, and customer efficiency and affordability
        programs.  In March 2007, KCP&L entered into a Collaboration
        Agreement with the Sierra Club and Concerned Citizens of Platte County that
        provides for increases in KCP&L’s wind generation capacity and energy
        efficiency initiatives, reductions in certain emission permit levels at its
        Iatan and LaCygne generating stations, and projects to offset certain carbon
        dioxide emissions.  Most, but not all, of these commitments are
        conditioned on regulatory approval.  A reduction or rejection by the
        MPSC or KCC of rate increase requests reflecting the costs of projects under
        the
        comprehensive energy plan or Collaboration Agreement may result in increased
        financing requirements or a significant adverse effect on KCP&L’s results of
        operations and financial position, or both.
  In
        response to competitive, economic, political, legislative and regulatory
        pressures, KCP&L may be subject to rate moratoriums, rate refunds, limits on
        rate increases or rate reductions, including phase-in plans designed to spread
        the impact of rate increases over an extended period of time for the benefit
        of
        customers.  Any or all of these could have a significant adverse
        effect on KCP&L’s results of operations and financial position.
  **The
        Company is Subject to Environmental Laws and the Incurrence of Environmental
        Liabilities**
 The
        Company is subject to regulation by federal, state and local authorities
        with
        regard to air quality and other environmental matters primarily through
        KCP&L’s operations.  The generation, transmission and distribution
        of electricity produces and requires disposal of certain hazardous products,
        which are subject to these laws and regulations.  In addition to
        imposing continuing compliance obligations, these laws and regulations authorize
        the imposition of substantial penalties for noncompliance, including fines,
        injunctive relief and other sanctions.  Failure to comply with these
        laws and regulations could have a material adverse effect on Great Plains
        Energy’s and consolidated KCP&L’s results of operations and financial
        position.
  The
        Clean
        Air Act requires companies to obtain permits and, if necessary, install control
        equipment to reduce emissions when making a major modification or a change
        in
        operation if either is expected to cause a significant net increase in regulated
        emissions.  The Sierra Club and Concerned Citizens of Platte County
        have claimed that modifications were made to Iatan No. 1 in violation of
        Clean
        Air Act regulations.  Although KCP&L has entered into a
        Collaboration Agreement with those parties that provides, among other things,
        for the release of such claims, the Collaboration Agreement does not bind
        any
        other entity.  KCP&L is aware of subpoenas issued by a Federal
        grand jury to certain third parties seeking documents relating to capital
        projects at Iatan No. 1.  KCP&L has not received a subpoena, and
        has not been informed of the scope of the grand jury
        inquiry.  KCP&L believes that it is in compliance with all
        relevant laws and regulations; however, the ultimate outcome of these grand
        jury
        activities cannot presently be determined, nor can the costs and other
        liabilities that could potentially result from a negative outcome presently
        be
        reasonably estimated.  There is no assurance these costs, if any,
        could be recovered in rates and failure to recover such costs could have
        a
        material adverse effect on Great Plains Energy’s and consolidated KCP&L’s
        results of operations and financial position.
  New
        environmental laws and regulations affecting KCP&L’s operations may be
        adopted, including but not limited to, regulation of carbon dioxide and other
        greenhouse gases or requirements that a portion of electric generation come
        from
        renewable resources, and new interpretations of existing laws and regulations
        could be adopted or become applicable to KCP&L or its facilities, any of
        which may substantially increase its environmental expenditures in the
        future.  New facilities, or modifications of existing facilities, may
        require new environmental permits or amendments to existing
        permits.  Delays in the environmental permitting process, denials of
        permit applications, and conditions imposed in permits
 78
 may
        materially affect the cost and timing of the generation and environmental
        retrofit projects included in the comprehensive energy plan, among other
        projects, and thus materially affect KCP&L’s results of operations and
        financial position.  Under current law, KCP&L is also generally
        responsible for any on-site liabilities associated with the environmental
        condition of its facilities, including those that it has previously owned
        or
        operated, regardless of whether the liabilities arose before, during or after
        the time it owned or operated the facilities.  KCP&L may not be
        able to recover all of its costs for environmental expenditures through rates
        in
        the future.  The incurrence of material environmental costs or
        liabilities, without related rate recovery, could have a material adverse
        effect
        on KCP&L’s results of operations and financial position.  See Note
        14 to the consolidated financial statements for additional information regarding
        environmental matters.
  ***Fossil
        Fuel and Transportation Prices Impact KCP&L’s
        Costs***
 KCP&L's
        electric tariffs in Missouri and Kansas do not currently contain fuel or
        purchased power cost adjustment clauses.  This exposes KCP&L to
        risk from changes in the market prices of coal, natural gas and purchased
        power.  Changes in KCP&L’s fuel mix due to electricity demand,
        plant availability, transportation issues, fuel prices and other factors
        can
        also adversely affect KCP&L’s fuel and purchased power costs.
  KCP&L
        does not hedge its entire exposure from fossil fuel and transportation price
        volatility.  Consequently, its results of operations and financial
        position may be materially impacted by changes in these prices until increased
        costs are recovered in rates.  KCP&L and other parties filed a
        stipulation and agreement with the KCC in September 2007 to implement a
        mechanism to fully recover its fuel and purchased power costs allocated to
        its
        Kansas operations.  If approved, it is slated to become effective in
        Kansas in January 2008.  KCP&L does not have, and has not
        requested, an energy cost adjustment mechanism for its Missouri
        operations.
  ***Wholesale
        Electricity Prices Affect Costs and Revenue, Creating Earnings
        Volatility***
 KCP&L's
        ability to maintain or increase its level of wholesale sales depends on the
        wholesale market price, transmission availability and the availability of
        KCP&L’s generation for wholesale sales, among other factors.  A
        substantial portion of KCP&L’s wholesale sales are made in the spot market,
        and thus KCP&L has immediate exposure to wholesale price
        changes.  Declines in wholesale market price or availability of
        generation or transmission constraints in the wholesale markets could reduce
        KCP&L's wholesale sales and adversely affect KCP&L’s results of
        operations and financial position.  If the aggregate margin on
        KCP&L’s wholesale sales exceeds a certain level, KCP&L is required to
        treat the Missouri jurisdictional portion of this excess as a regulatory
        liability.
 
 KCP&L
        is also exposed to price risk because at times it purchases power to meet
        its
        customers’ needs.  The cost of these purchases may be affected by the
        timing of customer demand and/or unavailability of KCP&L’s lower-priced
        generating units.  Wholesale power prices can be volatile and
        generally increase in times of high regional demand and high natural gas
        prices.  KCP&L and other parties filed a stipulation and agreement
        with the KCC in September 2007 to implement a mechanism to fully recover
        its
        fuel and purchased power costs allocated to its Kansas operations.  If
        approved, it is slated to become effective in Kansas in January
        2008.  KCP&L does not have, and has not requested, an energy cost
        adjustment mechanism for its Missouri operations.
  Strategic
        Energy operates in competitive retail electricity markets, competing against
        the
        host utilities and other retail suppliers.  Wholesale electricity
        costs, which account for a significant portion of its operating expenses,
        can
        materially affect Strategic Energy’s ability to attract and retain retail
        electricity customers.  There is also a regulatory lag that slows the
        adjustment of host public utility rates in response to changes in wholesale
        prices.  This lag can negatively affect Strategic Energy’s ability to
        compete in a rising wholesale price environment.  Strategic Energy
        manages wholesale electricity risk by establishing risk limits and entering
        into
        contracts to offset some****of its positions to balance
        energy
 79
 supply
        and demand; however, Strategic Energy is not always able to exactly match
        hedges
        to its aggregate exposure.  This imbalance position leaves Strategic
        Energy subject to the effects of electricity price
        volatility.  Consequently, its results of operations and financial
        position may be materially impacted by changes in the wholesale price of
        electricity.
  **Great
        Plains Energy is subject to business and regulatory uncertainties as a result
        of
        the anticipated acquisition of Aquila, Inc., which could adversely affect
        its
        business.**
 On
        February 6, 2007, Great Plains Energy entered into definitive agreements
        under
        which it would acquire all the outstanding shares of
        Aquila.  Immediately prior to this acquisition, Black Hills will
        acquire from Aquila its electric utility in Colorado and its gas utilities
        in
        Colorado, Kansas, Nebraska and Iowa.  These transactions are complex,
        and are subject to numerous regulatory approvals and other
        conditions.  The timing of, and the conditions imposed by, regulatory
        approvals may delay, or give rise to the ability to terminate the
        transactions.  In addition, the shareholder lawsuits filed against
        Aquila, Black Hills Corporation and Great Plains Energy seek to enjoin the
        transactions and recover alleged damages.  In the event of
        termination, Great Plains Energy would be required to write-off its deferred
        transaction costs, which could be material.  The conditions imposed by
        regulatory approvals could increase the costs, or decrease the benefits,
        anticipated by Great Plains Energy from the transaction.
  While
        it
        is anticipated that Great Plains Energy, KCP&L and Aquila will be rated
        investment grade after the transactions close, Great Plains Energy and KCP&L
        credit ratings have been negatively affected after the announcement of the
        proposed acquisition, and may be further negatively affected.  Credit
        rating downgrades could result in higher financing costs and potentially
        limit
        the companies’ access to the capital and credit markets, impact the regulatory
        rate treatment provided KCP&L, or both.
  Great
        Plains Energy entered into the transaction agreements with the expectation
        that
        the acquisition would result in various benefits to it and KCP&L including,
        among other things, synergies, cost savings and operating
        efficiencies.  Although Great Plains Energy expects to achieve the
        anticipated benefits of the acquisition, achieving them cannot be
        assured.  Great Plains Energy, KCP&L and Aquila proposed to
        regulators that the benefits resulting from the transaction be shared between
        retail electric customers and Great Plains Energy shareholders, and requested
        certain other regulatory assurances.  There is no assurance regarding
        the amount of benefit-sharing, or other regulatory treatment, in rate cases
        occurring after the closing of the transactions.
  Most
        of
        the Aquila employees remaining after the sale to Black Hills are expected
        to
        become employees of KCP&L.  KCP&L employees will operate and
        manage both KCP&L properties and Aquila’s properties, and KCP&L will
        charge Aquila for the cost of these services.  Procurement of goods
        and services for both KCP&L and Aquila is expected to be done by KCP&L,
        with the cost of goods and services used by Aquila being billed to
        Aquila.  These expected arrangements may pose risks to KCP&L,
        including possible claims by Aquila or third parties arising from actions
        of
        KCP&L employees in operating Aquila’s properties and providing other
        services to Aquila.  KCP&L’s claims for reimbursement for goods
        and services provided to Aquila will be unsecured and rank equally with other
        unsecured obligations of Aquila.  KCP&L’s ability to be reimbursed
        for the costs incurred for the benefit of Aquila depends on the financial
        ability of Aquila to make such payments.
  Additionally,
        Aquila’s utility operations are subject to regulation by numerous government
        entities, including the MPSC and FERC.  As such, a successful
        acquisition of Aquila will subject Great Plains Energy to additional regulatory
        risk.
  **The
        outcome of legal proceedings cannot be predicted.  An adverse finding
        could have a material adverse effect on Great Plains Energy’s and KCP&L’s
        financial condition.**
 Great
        Plains Energy and KCP&L are party to various material litigation and
        regulatory matters arising out of their business operations.  The
        ultimate outcome of these matters cannot presently be determined, nor can
        the
        liability that could potentially result from a negative outcome in each case
 80
 presently
        be reasonably estimated.  The liability Great Plains Energy and
        KCP&L may ultimately incur with respect to any of these cases in the event
        of a negative outcome may be in excess of amounts currently reserved and
        insured
        against with respect to such matters and, as a result, these matters may
        have a
        material adverse effect on the consolidated financial position of Great Plains
        Energy, KCP&L or both.
  **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 2007.
 **Issuer
                  Purchases of Equity Securities****Maximum
                  Number****Total
                  Number of**
              
              **(or
                  Approximate****Shares
                  (or Units)**
              
              **Dollar
                  Value) of****Total**
              
              
              
              **Purchased
                  as**
              
              **Shares
                  (or Units)****Number
                  of**
              **Average**
              **Part
                  of Publicly**
              
              **that
                  May Yet Be****Shares**
              **Price
                  Paid**
              **Announced**
              
              **Purchased
                  Under****(or
                  Units)**
              **per
                  Share**
              **Plans
                  or**
              
              **the
                  Plans or****Month**
              **Purchased**
              **(or
                  Unit)**
              **Programs**
              
              **Programs**July
                  1-31
              
              167
              (1)
              
              $  
                  29.47
              
              
              -
              
              
              
              N/AAugust
                  1-31
              
              -
              
              
              -
              
              
              -
              
              
              
              N/ASeptember
                  1-30
              
              -
              
              
              -
              
              
              -
              
              
              
              N/ATotal
              
              167
              
              
              $  
                  29.47
              
              
              -
              
              
              
              N/A(1)Represents
                  shares of common stock surrendered to Great Plains Energy by certain
                  officers topay
                  taxes related to the issuance of restricted stock and performance
                  shares.
 
 **ITEM
        3.  DEFAULTS UPON SENIOR SECURITIES**
  None.
  **ITEM
        4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY
        HOLDERS**
  None.
  **ITEM
        5.  OTHER INFORMATION**
  Pursuant
          to the guidance provided by the SEC Division of Corporation Finance in
          the
          Current Report on Form 8-K Frequently Asked Questions dated November 23,
          2004,
          the following information is provided pursuant to the requirements of Item
          5.02(e) of Form 8-K.
  On
          October 30, 2007, the Board of Directors of Great Plains Energy took the
          following executive compensation actions affecting one or more of its principal
          executive officer, principal financial officer, and other named executive
          officers.
 81
 **Section
          409A Remediation**
  2003
          Stock Options
  In
          2003,
          Great Plains Energy entered into stock option grant agreements with certain
          of
          its officers, including William H. Downey, President and Chief Operating
          Officer, that included the right to receive dividend equivalent payments
          in
          connection with the officer’s exercise of such stock options.  Under
          the terms established in 2003, these dividend equivalents accrue quarterly
          in a
          notional account, and are proportionately paid when the option holder exercises
          his stock options.  No interest is accrued on the notional
          account.  Mr. Downey’s stock option grant is for 5,249 shares, no
          portion of which has been exercised.  These stock option grants were
          made prior to the enactment of Internal Revenue Code Section 409A (Section
          409A).  Section 409A would impose adverse tax consequences on the
          option holders due to the present structuring of the dividend equivalent
          payments, unless these options are either brought into compliance with
          Section
          409A or amended so as to fall within an available exemption from Section
          409A.  To avoid these consequences, which were not foreseeable when
          the stock options were granted, and cause these stock option grants to
          be exempt
          from Section 409A, Great Plains Energy will offer each affected option
          holder
          the opportunity to amend these stock option grants to provide that the
          accrued
          dividend equivalents will be paid if there is a change in control of Great
          Plains Energy, or upon the earlier of (i) the first anniversary of the
          option
          holder’s separation from service with Great Plains Energy, or (ii) July 1,
          2014.  Assuming (i) Mr. Downey does not exercise any of his 2003 stock
          options, (ii) no change in control occurs and he remains employed by Great
          Plains Energy through July 1, 2014, and (iii) Great Plains Energy continues
          to
          pay a quarterly common stock dividend of $0.415 per share, he would be
          entitled
          to receive a cash payment of approximately $95,847 on July 1, 2014.
  Supplemental
          Executive Retirement Plan
  Great
          Plains Energy’s Supplemental Executive Retirement Plan (SERP) provides certain
          supplemental retirement benefits to Michael J. Chesser, Chairman of the
          Board
          and Chief Executive Officer, Mr. Downey, Terry Bassham, Executive Vice
          President
– Finance and Strategic Development and Chief Financial Officer, John R.
          Marshall, Senior Vice President – Deliver of KCP&L, and other
          officers.  The SERP is unfunded and provides out of general assets an
          amount substantially equal to the difference between the amount that would
          have
          been payable under Great Plain Energy's qualified pension plan in the absence
          of
          legislation limiting pension benefits and earnings that may be considered
          in
          calculating pension benefits, and the amount actually payable under such
          pension
          plan.  In order to bring the SERP into compliance with Section 409A,
          and to accommodate certain design changes to Great Plains Energy’s defined
          benefit pension plan covering KCP&L and Services employees (Pension Plan),
          the Great Plains Energy Board of Directors froze the existing SERP (Frozen
          SERP)
          with respect to all benefits accrued and vested through December 31, 2004,
          and
          adopted an amended and restated SERP (409A SERP) with respect to all benefits
          accruing or vesting after December 31, 2004.  The principal changes
          include:
  ·
                The
                    409A SERP limits payment of benefits to the events permitted
                    under Section
                    409A;
 ·
                The
                    409A SERP delays by six months any payments due upon the separation
                    from
                    service of “specified employees”, as defined in Section 409A (which
                    includes the four officers named
                    above);
 ·
                Participants
                    in the 409A SERP have an opportunity until December 31, 2008,
                    to change
                    their election as to when and in what form benefits under the
                    409A SERP
                    will be paid (however, no election change made during 2007 can
                    result in
                    amounts being paid in 2007 or defer amounts that otherwise would
                    have been
                    paid in 2007 and no election change made during 2008 can result
                    in amounts
                    being paid in 2008 or defer amounts that otherwise would have
                    been paid in
                    2008); and
  
 82
 ·
                The
                    Pension Plan benefit accrual rates have been reduced for employees
                    hired
                    on and after September 1, 2007, among other changes.  Those who
                    were employees prior to that date had the option to either continue
                    under
                    the terms of the Pension Plan prior to that date, or to elect
                    to be
                    covered under the new terms of the Pension Plan.  The 409A SERP
                    benefit accrual rate is reduced from 2% to 1.58%, effective January
                    1,
                    2008, for those participants with reduced Pension Plan benefit
                    accrual
                    rates.  Of the officers named in the first paragraph of this
                    section, Messrs. Bassham and Marshall have elected to be covered
                    under the
                    new terms of the Pension Plan.
  Nonqualified
          Deferred Compensation Plan
  Great
          Plains Energy’s Nonqualified Deferred Compensation Plan (DCP) is available to
          the Board of Directors, Messrs. Chesser, Downey, Bassham, Marshall, Shahid
          Malik, President and Chief Executive Officer of Strategic Energy and other
          officers.  The DCP provides the opportunity for participants to defer
          the receipt of compensation and to earn interest on the deferred
          amounts.  In order to bring the DCP into compliance with Section 409A,
          and to accommodate certain design changes to Great Plains Energy’s 401(k) plan
          covering KCP&L and Services employees (401(k) Plan), the Great Plains Energy
          Board of Directors (1) froze the existing DCP (Frozen DCP) with respect
          to all
          contributions accrued and vested through December 31, 2004 (and all earnings
          on
          such contributions) and (2) adopted an amended and restated DCP (409A DCP)
          with
          respect to all contributions accruing or vesting after December 31, 2004
          (and
          all earnings on such contributions).  The principal changes
          include:
  ·
                The
                    409A DCP limits payment of contributions and earnings to the
                    events
                    permitted under Section 409A;
 ·
                The
                    409A DCP delays by six months any payments due upon the separation
                    from
                    service of “specified employees”, as defined in Section 409A (which
                    includes the five officers named
                    above);
 ·
                The
                    409A DCP limits the form of payments to a lump-sum payment, or
                    annual
                    installments over 5, 10 or 15
                    years;
 ·
                Participants
                    in the 409A DCP have an opportunity until December 31, 2008,
                    to change
                    their election as to when and in what form their contributions
                    and
                    earnings under the 409A DCP will be paid (however, no election
                    change made
                    during 2007 can result in amounts being paid in 2007 or defer
                    amounts that
                    otherwise would have been paid in 2007 and no election change
                    made during
                    2008 can result in amounts being paid in 2008 or defer amounts
                    that
                    otherwise would have been paid in
                    2008);
 ·
                Participants
                    do not have to contribute to the 401(k) Plan to be eligible to
                    contribute
                    under the 409A DCP; however, participants who do not contribute
                    the
                    maximum amount to the 401(k) Plan (excluding “catch up” contributions) are
                    not eligible to receive the matching contributions described
                    below;
 ·
                The
                    409A DCP permits Great Plains Energy to make additional discretionary
                    contributions to participants if the Board of Directors determines
                    such
                    contributions are appropriate; and
  
 83
 ·
                In
                    connection with the Pension Plan changes discussed above, the
                    401(k) Plan
                    benefits have been enhanced for employees hired on and after
                    September 1,
                    2007, among other changes.  Those who were employees prior to
                    that date had the option to either continue under the terms of
                    the 401(k)
                    Plan and Pension Plan prior to that date, or to elect to be covered
                    under
                    the new terms of the 401(k) Plan and Pension Plan.  For those
                    participants who are covered under the new terms of the 401(k)
                    Plan, (i)
                    Great Plains Energy’s matching contribution under the 409A DCP will be
                    100% on each dollar contributed up to 6% of compensation (including
                    base
                    salary, bonus and incentive pay), offset by the matching contribution
                    for
                    401(k) Plan contributions, and (ii) such matching contributions
                    and
                    earnings thereon will be fully and immediately vested.  For
                    other participants, matching contributions and earnings thereon
                    will
                    continue to remain subject to a 6-year graded vesting schedule.
                    Of the
                    officers named in the first paragraph of this section, Messrs.
                    Bassham and
                    Marshall have elected to be covered under the new terms of the
                    401(k)
                    Plan.
  The
          foregoing descriptions of the stock option amendment, Frozen SERP, 409A
          SERP,
          Frozen DCP and 409A DCP do not purport to be complete and are qualified
          in their
          entirety by the text of such plans themselves, which are filed as exhibits
          to
          this report.
 **ITEM
        6.  EXHIBITS**
  **Great
        Plains Energy Documents**
 Exhibit
                Number
              
              Description
                  of Document4.1
              *
              Second
                  Supplemental Indenture dated as of September 25, 2007, between
                  Great
                  Plains Energy Incorporated and The Bank of New York Trust Company,
                  N.A.,
                  as trustee (Exhibit 4.1 to Form 8-K dated September 25,
                  2007).10.1.1
              
              $50,000,000
                  Revolving Credit Facility Credit Agreement by and among Strategic
                  Energy,
                  L.L.C., the lenders party thereto and PNC Bank, National Association,
                  as
                  Administrative Agent, dated as of October 3, 2007.10.1.2
              
              Receivables
                  Purchase Agreement dated as of October 3, 2007, by and among Strategic
                  Receivables, LLC, as Seller, Strategic Energy, L.L.C., as initial
                  Servicer, the Conduit Purchasers party thereto, the Purchaser Agents
                  party
                  thereto, the Financial Institutions from time to time party thereto
                  as LC
                  Participants, and PNC Bank, National Association, as Administrator
                  and as
                  LC Bank.10.1.3
              
              Purchase
                  and Sale Agreement dated as of October 3, 2007, by and among the
                  various
                  entities from time to time party thereto as Originators, Strategic
                  Energy,
                  L.L.C., as Servicer, and Strategic Receivables, LLC, as
                  Buyer.10.1.4
              
              Letter
                  Agreement dated as of August 31, 2007, to Asset Purchase Agreement
                  and
                  Partnership Interests Purchase Agreement by and among Aquila, Inc.,
                  Black
                  Hills Corporation, Great Plains Energy Incorporated and Gregory
                  Acquisition Corp.10.1.5
              
              Letter
                  Agreement dated as of September 28, 2007, to Asset Purchase Agreement
                  and
                  Partnership Interests Purchase Agreement by and among Aquila, Inc.,
                  Black
                  Hills Corporation, Great Plains Energy Incorporated and Gregory
                  Acquisition Corp.10.1.6
              
              Letter
                  Agreement dated as of October 3, 2007, to Agreement and Plan of
                  Merger,
                  Asset Purchase Agreement and Partnership Interests Purchase Agreement
                  by
                  and among Aquila, Inc., Black Hills Corporation, Great Plains Energy
                  Incorporated and Gregory Acquisition Corp.
 
 84
 10.1.7
              
              Joint
                  Stipulation and Agreement dated as of September 12, 2007, among
                  Kansas
                  City Power & Light Company, the Staff of the Kansas Corporation
                  Commission and the Citizens’ Utility Ratepayer Board (filed as Exhibit
                  10.2.1 hereto).10.1.8
              
              Insurance
                  Agreement dated as of September 19, 2007, by and between Financial
                  Guaranty Insurance Company and Kansas City Power & Light Company
                  (filed as Exhibit 10.2.2 hereto).10.1.9
              +
              Form
                  of Amendment to 2003 Stock Option Grants10.1.10
              +
              Great
                Plains Energy Incorporated Supplemental Executive Retirement Plan
                (As
                Amended and Restated for I.R.C. §409A)10.1.11
              +
              Great
                Plains Energy Incorporated Nonqualified Deferred Compensation Plan
                (As
                Amended and Restated for I.R.C. §409A)10.1.12
              *
              Notice
                  of Election to Transfer Unused Commitment between the Great Plains
                  Energy
                  Incorporated and Kansas City Power & Light Company Credit Agreements
                  dated as of May 11, 2006, with Bank of America, N.A., as Administrative
                  Agent, JPMorgan Chase Bank, N.A., as Syndication Agent, BNP Paribas,
                  The
                  Bank of Tokyo-Mitsubishi UFJ, Limited, Chicago Branch and Wachovia
                  Bank
                  N.A., as Co-Documentation Agents, The Bank of New York, KeyBank
                  National
                  Association, The Bank of Nova Scotia, UMB Bank, N.A., and Commerce
                  Bank,
                  N.A. (Exhibit 10.1.2 to Quarterly Report on Form 10-Q for the period
                  ended
                  June 30, 2007).12.1
              
              Computation
                  of Ratio of Earnings to Fixed Charges.31.1.a
              
              Rule
                  13a-14(a)/15d-14(a) Certifications of Michael J. Chesser.31.1.b
              
              Rule
                  13a-14(a)/15d-14(a) Certifications of Terry Bassham.32.1
              
              Section
                  1350 Certifications.
  *Filed
        with the SEC as exhibits to prior SEC filings and are incorporated herein
        by
        reference and made a part hereof.  The SEC filing and the exhibit
        number of the documents so filed, and incorporated herein by reference, are
        stated in parenthesis in the description of such exhibit.
  +Indicates
        management contract or compensatory plan or arrangement.
  Copies
        of
        any of the exhibits filed with the SEC in connection with this document may
        be
        obtained from Great Plains Energy upon written request.
  85
 **KCP&L
        Documents**
 Exhibit
                  Number
              
              Description
                  of Document10.2.1
              
              Joint
                  Stipulation and Agreement dated as of September 12, 2007, among
                  Kansas
                  City Power & Light Company, the Staff of the Kansas Corporation
                  Commission and the Citizens’ Utility Ratepayer Board.10.2.2
              
              Insurance
                  Agreement dated as of September 19, 2007, by and between Financial
                  Guaranty Insurance Company and Kansas City Power & Light Company
                  (Exhibit 10.2.2 hereto).10.2.3
              *
              Notice
                  of Election to Transfer Unused Commitment between the Great Plains
                  Energy
                  Incorporated and Kansas City Power & Light Company Credit Agreements
                  dated as of May 11, 2006, with Bank of America, N.A., as Administrative
                  Agent, JPMorgan Chase Bank, N.A., as Syndication Agent, BNP Paribas,
                  The
                  Bank of Tokyo-Mitsubishi UFJ, Limited, Chicago Branch and Wachovia
                  Bank
                  N.A., as Co-Documentation Agents, The Bank of New York, KeyBank
                  National
                  Association, The Bank of Nova Scotia, UMB Bank, N.A., and Commerce
                  Bank,
                  N.A. (Exhibit 10.1.2 to Quarterly Report on Form 10-Q for the period
                  ended
                  June 30, 2007).12.2
              
              Computation
                  of Ratio of Earnings to Fixed Charges.31.2.a
              
              Rule
                  13a-14(a)/15d-14(a) Certifications of William H. Downey.31.2.b
              
              Rule
                  13a-14(a)/15d-14(a) Certifications of Terry Bassham.32.2
              
              Section
                  1350 Certifications.
  ***Filed with the SEC as exhibits to prior 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.
 86
 **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 INCORPORATED**Dated:  November
                  5, 2007
              By:  /s/Michael
                  J. Chesser(Michael
                  J. Chesser)(Chief
                  Executive Officer)Dated:  November
                  5, 2007
              By:  /s/Lori
                  A. Wright(Lori
                  A. Wright)(Principal
                  Accounting Officer)
   **KANSAS
                  CITY POWER & LIGHT COMPANY**Dated:  November
                  5, 2007
              By:  /s/William
                  H. Downey(William
                  H. Downey)(Chief
                  Executive Officer)Dated:  November
                  5, 2007
              By:  /s/Lori
                  A. Wright(Lori
                  A. Wright)(Principal
                  Accounting Officer)
  87