Exhibit 10.2.a.


		GUARANTY AND SURETYSHIP AGREEMENT


      THIS GUARANTY AND SURETYSHIP AGREEMENT (this "GUARANTY") is made
and  entered  into as of this 8th day of March, 2002, by GREAT  PLAINS
ENERGY  INCORPORATED (the "GUARANTOR"), with an address at 1201 Walnut
Street,  Kansas City, MO 64106, in consideration of the  extension  of
credit by PNC BANK, NATIONAL ASSOCIATION (the "BANK"), with an address
at One PNC Plaza, 249 Fifth Avenue, Pittsburgh, Pennsylvania 15222, to
STRATEGIC ENERGY, L.L.C. (the "BORROWER"), and other good and valuable
consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged.

      1.    GUARANTY OF OBLIGATIONS.  The Guarantor hereby guarantees,
and  becomes  surety for, the prompt payment of all debts, liabilities
and  financial obligations owing by the Borrower to the Bank or to any
other  direct  or  indirect subsidiary of The PNC  Financial  Services
Group,  Inc., of any kind or nature, present or future (including  any
interest accruing thereon after maturity, or after the filing  of  any
petition  in  bankruptcy,  or  the  commencement  of  any  insolvency,
reorganization or like proceeding relating to the Borrower, whether or
not  a  claim for post-filing or post-petition interest is allowed  in
such  proceeding), arising under or related to (x) that certain Letter
Agreement  governing a $25,000,000 committed line of  credit  for  the
issuance  of  standby letters of credit between the Borrower  and  the
Bank,  dated March 30, 2001, as amended on or about the date herewith,
(y)  each  letter  of  credit issued by the Bank  on  account  of  the
Borrower  pursuant  to  such Letter Agreement, and  (z)  that  certain
Reimbursement  Agreement for Standby Letter(s) of Credit  executed  by
the Borrower in favor of the Bank, dated November 14, 2000, as amended
(but only as it pertains to the Letter Agreement and letters of credit
issued  pursuant  to  such  Letter  Agreement),  and  any  amendments,
extensions,  renewals  or increases of any of the  foregoing  and  all
costs  and  expenses  of  the  Bank  incurred  in  the  documentation,
negotiation,  modification, enforcement, collection  or  otherwise  in
connection  with any of the foregoing, including reasonable attorneys'
fees  and  expenses   (hereinafter referred  to  collectively  as  the
"OBLIGATIONS").  If the Borrower defaults under any such  Obligations,
the  Guarantor  will pay the amount due to the Bank.   Notwithstanding
anything contained in this Guaranty to the contrary, in the event that
the  Borrower is required to make a payment to cash-collateralize  any
Letters  of  Credit in accordance with the terms of the  Reimbursement
Agreement,

     (a)   the  Guarantor  shall  not  be  required  to  provide  cash
     collateral for the Letters of Credit unless one of the  following
     events shall have occurred:

          (1)   the  Guarantor shall fail, at any time, to  cause  the
          ratio  of  (i) Total Indebtedness (as defined on Schedule  A
          hereto) to (ii) Total Capitalization (as defined on Schedule
          A hereto) to be less than or equal to 0.65 to 1.0;

          (2)   the Guarantor shall permit the Interest Coverage Ratio
          (as  defined  on  Schedule A hereto) as of the  end  of  any
          fiscal quarter of the Guarantor to be less than 2.0 to 1.0;

          (3)   an "Event of Default" shall occur under this Guaranty;
          or

          (4)  the Borrower or the Guarantor shall dissolve, terminate
          its  existence, become insolvent, have a receiver  appointed
          for  it or any part of its property, make an assignment  for
          the  benefit  of creditors, or be subject to any proceedings
          under any bankruptcy or insolvency laws; then

     (b)   the  amount  of  cash collateral  to  be  provided  by  the
     Guarantor shall be limited to one hundred percent (100%)  of  the
     undrawn face amount of the outstanding Letters of Credit;

provided that the Guarantor shall continue to be obligated to pay,  to
the  extent not paid by the Borrower, all other Obligations (including
without  limitation, all fees charged in connection with the  issuance
of  the  Letters  of  Credit  and all reasonable  attorneys  fees  and
expenses)  whether or not cash collateral shall have been provided  to
the Bank by the Guarantor or any other party.

      2.   NATURE OF GUARANTY; WAIVERS.  This is a guaranty of payment
and  not  of  collection  and the Bank shall not  be  required,  as  a
condition of the Guarantor's liability, to make any demand upon or  to
pursue any of its rights against the Borrower, or to pursue any rights
which may be available to it with respect to any other person who  may
be liable for the payment of the Obligations.

      This  is  an absolute, unconditional, irrevocable and continuing
guaranty  and will remain in full force and effect until  all  of  the
Obligations  have  been indefeasibly paid in full, and  the  Bank  has
terminated this Guaranty.  This Guaranty will remain in full force and
effect  even  if there is no principal balance outstanding  under  the
Obligations at a particular time or from time to time.   This Guaranty
will   not   be  affected  by  any  surrender,  exchange,  acceptance,
compromise  or release by the Bank of any other party,  or  any  other
guaranty or any security held by it for any of the Obligations, by any
failure of the Bank to take any steps to perfect or maintain its  lien
or  security interest in or to preserve its rights to any security  or
other collateral for any of the Obligations or any guaranty, or by any
irregularity, unenforceability or invalidity of any of the Obligations
or


<PAGE>

any  part  thereof  or  any security or other guaranty  thereof.   The
Guarantor's  obligations hereunder shall not be affected, modified  or
impaired by any counterclaim, set-off, deduction or defense based upon
any  claim  the Guarantor may have against the Borrower or  the  Bank,
except payment or performance of the Obligations.

      Notice  of acceptance of this Guaranty, notice of extensions  of
credit  to  the  Borrower  from  time  to  time,  notice  of  default,
diligence,  presentment,  notice  of  dishonor,  protest,  demand  for
payment, and any defense based upon the Bank's failure to comply  with
the   notice  requirements  of  the  applicable  version  of   Uniform
Commercial  Code  9-504 are hereby waived.  The Guarantor  waives  all
defenses based on suretyship or impairment of collateral.

      The  Bank at any time and from time to time, without the consent
of  the Guarantor, and without impairing or releasing, discharging  or
modifying  the Guarantor's liabilities hereunder, may (a)  change  the
manner,  place, time or terms of payment or performance of or interest
rates  on,  or  other  terms  relating to,  any  of  the  Obligations;
(b)  renew,  substitute, modify, amend or alter, or grant consents  or
waivers  relating to any of the Obligations, any other guaranties,  or
any  security for any Obligations or guaranties; (c) apply any and all
payments  by whomever paid or however realized including any  proceeds
of  any  collateral, to any Obligations of the Borrower in such order,
manner  and  amount as the Bank may determine in its sole  discretion;
(d)  settle,  compromise or deal with any other person, including  the
Borrower  or  the Guarantor, with respect to any Obligations  in  such
manner   as  the  Bank  deems  appropriate  in  its  sole  discretion;
(e)  substitute, exchange or release any security or guaranty; or  (f)
take  such  actions and exercise such remedies hereunder  as  provided
herein.   The Bank shall provide the Guarantor with prompt  notice  of
the  occurrence of any actions within the scope of clauses (a) through
(f) of this paragraph; provided, however, that failure to provide such
notice  shall  not  affect  the  validity  of  said  actions  or   the
Obligations of the Guarantor under this Guaranty.

     3.   REPAYMENTS OR RECOVERY FROM THE BANK.  If any demand is made
at  any time upon the Bank for the repayment or recovery of any amount
received by it in payment or on account of any of the Obligations  and
if  the  Bank repays all or any part of such amount by reason  of  any
judgment,  decree or order of any court or administrative body  or  by
reason  of  any  settlement or compromise  of  any  such  demand,  the
Guarantor will be and remain liable hereunder for the amount so repaid
or  recovered  to  the same extent as if such amount  had  never  been
received originally by the Bank.  The provisions of this section  will
be  and remain effective notwithstanding any contrary action which may
have  been  taken by the Guarantor in reliance upon such payment,  and
any  such  contrary action so taken will be without prejudice  to  the
Bank's  rights  hereunder and will be deemed to have been  conditioned
upon such payment having become final and irrevocable.

      4.    FINANCIAL  STATEMENTS.  Unless  compliance  is  waived  in
writing by the Bank or until all of the Obligations have been paid  in
full,  the  Guarantor will promptly submit to the Bank copies  of  its
Annual Report on Form 10-K and its Quarterly Report on Form 10-Q.

      5.   ENFORCEABILITY OF OBLIGATIONS.  No modification, limitation
or  discharge  of the Obligations arising out of or by virtue  of  any
bankruptcy, reorganization or similar proceeding for relief of debtors
under federal or state law will affect, modify, limit or discharge the
Guarantor's liability in any manner whatsoever and this Guaranty  will
remain  and  continue in full force and effect and will be enforceable
against  the Guarantor to the same extent and with the same force  and
effect  as  if  any  such  proceeding had not  been  instituted.   The
Guarantor waives all rights and benefits which might accrue to  it  by
reason  of  any such proceeding and will be liable to the full  extent
hereunder,  irrespective of any modification, limitation or  discharge
of  the  liability  of  the Borrower that may  result  from  any  such
proceeding.

      6.    EVENTS OF DEFAULT.  The occurrence of any of the following
shall be an "EVENT OF DEFAULT": (i) the Guarantor's failure to perform
any  of  its obligations hereunder (including without limitation,  the
Guarantor's obligation to provide cash collateral for the  Letters  of
Credit  pursuant to the terms of Section 1 above); (ii)  the  falsity,
inaccuracy  or  material  breach  by  the  Guarantor  of  any  written
warranty, representation or statement made or furnished to the Bank by
or  on  behalf of the Guarantor; or (iii) the termination or attempted
termination  of this Guaranty.  Upon the occurrence of  any  Event  of
Default,  (a)  the Guarantor shall pay to the Bank the amount  of  the
Obligations;  or  (b)  on  demand of the  Bank,  the  Guarantor  shall
immediately deposit with the Bank, in U.S. dollars, all amounts due or
to  become due under the Obligations, and the Bank may at any time use
such funds to repay the Obligations; or (c) the Bank in its discretion
may  exercise with respect to any collateral any one or  more  of  the
rights  and  remedies  provided a secured party under  the  applicable
version  of  the  Uniform Commercial Code; or  (d)  the  Bank  in  its
discretion  may  exercise  from time to  time  any  other  rights  and
remedies available to it at law, in equity or otherwise.

      7.    COSTS.   To the extent that the Bank incurs any  costs  or
expenses  in  protecting or enforcing its rights under the Obligations
or  this Guaranty, including reasonable attorneys' fees and the  costs
and  expenses of litigation, such costs and expenses will  be  due  on
demand,  will  be included in the Obligations and will  bear  interest
from  the incurring or payment thereof at the Default Rate (as defined
in any of the Obligations).

      8.    POSTPONEMENT  OF SUBROGATION.  Until the  Obligations  are
indefeasibly paid in full, the Guarantor postpones and subordinates in
favor  of the Bank any and all rights which the Guarantor may have  to
(a)  assert any claim against the Borrower based on subrogation rights
with  respect  to payments made hereunder, and (b) any realization  on
any   property  of  the  Borrower,  including  participation  in   any
marshalling of the Borrower's assets.

                                  -2-

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       9.     NOTICES.   All  notices,  demands,  requests,  consents,
approvals  and  other  communications required or permitted  hereunder
must  be  in writing and will be effective upon receipt.  Such notices
and  other  communications may be hand-delivered,  sent  by  facsimile
transmission with confirmation of delivery and a copy sent  by  first-
class  mail,  or  sent  by  nationally  recognized  overnight  courier
service,  to  the addresses for the Bank and the Guarantor  set  forth
above or to such other address as one may give to the other in writing
for such purpose.

      10.  PRESERVATION OF RIGHTS.  No delay or omission on the Bank's
part to exercise any right or power arising hereunder will impair  any
such  right  or power or be considered a waiver of any such  right  or
power, nor will the Bank's action or inaction impair any such right or
power.   The  Bank's rights and remedies hereunder are cumulative  and
not  exclusive of any other rights or remedies which the Bank may have
under other agreements, at law or in equity.  The Bank may proceed  in
any order against the Borrower, the Guarantor or any other obligor of,
or collateral securing, the Obligations.

      11.   ILLEGALITY.   In case any one or more  of  the  provisions
contained in this Guaranty should be invalid, illegal or unenforceable
in  any  respect,  the  validity, legality and enforceability  of  the
remaining provisions contained herein shall not in any way be affected
or impaired thereby.

     12.  CHANGES IN WRITING.  No modification, amendment or waiver of
any  provision  of this Guaranty nor consent to any departure  by  the
Guarantor therefrom will be effective unless made in a writing  signed
by  the Bank, and then such waiver or consent shall be effective  only
in  the  specific  instance and for the purpose for which  given.   No
notice  to  or  demand on the Guarantor in any case will  entitle  the
Guarantor  to  any  other or further notice or  demand  in  the  same,
similar or other circumstance.

      13.   ENTIRE AGREEMENT.  This Guaranty (including the  documents
and  instruments referred to herein) constitutes the entire  agreement
and  supersedes  all  other prior agreements and understandings,  both
written  and oral, between the Guarantor and the Bank with respect  to
the subject matter hereof; provided, however, that this Guaranty is in
addition  to,  and not in substitution for, any other guarantees  from
the Guarantor to the Bank.

      14.  SUCCESSORS AND ASSIGNS.  This Guaranty will be binding upon
and  inure  to  the benefit of the Guarantor and the  Bank  and  their
respective  heirs, executors, administrators, successors and  assigns;
PROVIDED, HOWEVER, that the Guarantor may not assign this Guaranty  in
whole or in part without the Bank's prior written consent and the Bank
at any time may assign this Guaranty in whole or in part.

      15.  INTERPRETATION.  In this Guaranty, unless the Bank and  the
Guarantor otherwise agree in writing, the singular includes the plural
and  the  plural  the  singular; references  to  statutes  are  to  be
construed   as   including  all  statutory  provisions  consolidating,
amending or replacing the statute referred to; the word "or" shall  be
deemed  to  include  "and/or", the words "including",  "includes"  and
"include"  shall  be  deemed  to be followed  by  the  words  "without
limitation"; and references to sections or exhibits are  to  those  of
this  Guaranty unless otherwise indicated.  Section headings  in  this
Guaranty are included for convenience of reference only and shall  not
constitute  a  part of this Guaranty for any other purpose.   If  this
Guaranty  is  executed  by  more than  one  party  as  Guarantor,  the
obligations of such persons or entities will be joint and several.

      16.   INDEMNITY.  The Guarantor agrees to indemnify each of  the
Bank, its directors, officers and employees and each legal entity,  if
any,  who  controls the Bank (the "INDEMNIFIED PARTIES") and  to  hold
each  Indemnified Party harmless from and against any and all  claims,
damages,  losses,  liabilities and expenses (including  all  fees  and
charges  of  internal  or external counsel with whom  any  Indemnified
Party  may  consult  and  all  expenses of litigation  or  preparation
therefor)  which  any  Indemnified Party may incur  or  which  may  be
asserted against any Indemnified Party as a result of the execution of
or  performance  under  this  Guaranty; PROVIDED,  HOWEVER,  that  the
foregoing  indemnity  agreement shall not apply  to  claims,  damages,
losses, liabilities and expenses solely attributable to an Indemnified
Party's   gross  negligence  or  willful  misconduct.   The  indemnity
agreement  contained in this Section shall survive the termination  of
this  Guaranty.  The Guarantor may participate at its expense  in  the
defense of any such claim.

      17.   GOVERNING  LAW AND JURISDICTION.  This Guaranty  has  been
delivered to and accepted by the Bank and will be deemed to be made in
the  Commonwealth of Pennsylvania.  THIS GUARANTY WILL BE  INTERPRETED
AND  THE  RIGHTS  AND  LIABILITIES  OF  THE  BANK  AND  THE  GUARANTOR
DETERMINED  IN  ACCORDANCE  WITH  THE  LAWS  OF  THE  COMMONWEALTH  OF
PENNSYLVANIA,  EXCLUDING ITS CONFLICT OF LAWS  RULES.   The  Guarantor
hereby irrevocably consents to the exclusive jurisdiction of any state
or  federal court in the county or judicial district where the  Bank's
office indicated above is located; provided that nothing contained  in
this  Guaranty  will  prevent  the  Bank  from  bringing  any  action,
enforcing  any award or judgment or exercising any rights against  the
Guarantor  individually, against any security or against any  property
of  the  Guarantor within any other county, state or other foreign  or
domestic jurisdiction.  The Guarantor acknowledges and agrees that the
venue  provided above is the most convenient forum for both  the  Bank
and  the  Guarantor.  The Guarantor waives any objection to venue  and
any  objection  based  on  a  more  convenient  forum  in  any  action
instituted under this Guaranty.

      18.   EQUAL CREDIT OPPORTUNITY ACT.  If the Guarantor is not  an
"applicant  for  credit" under Section 202.2 (e) of the  Equal  Credit
Opportunity Act of 1974 ("ECOA"), the Guarantor acknowledges that  (i)
this Guaranty has been executed to

                                  -3-

<PAGE>

provide credit support for the Obligations, and (ii) the Guarantor was
not required to execute this Guaranty in violation of Section 202.7(d)
of the ECOA.

      19.  WAIVER OF JURY TRIAL.  THE GUARANTOR IRREVOCABLY WAIVES ANY
AND ALL RIGHT THE GUARANTOR MAY HAVE TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING  OR  CLAIM  OF ANY NATURE RELATING TO  THIS  GUARANTY,  ANY
DOCUMENTS EXECUTED IN CONNECTION WITH THIS GUARANTY OR ANY TRANSACTION
CONTEMPLATED  IN  ANY  OF SUCH DOCUMENTS.  THE GUARANTOR  ACKNOWLEDGES
THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.

      THE  GUARANTOR ACKNOWLEDGES THAT IT HAS READ AND UNDERSTOOD  ALL
THE  PROVISIONS OF THIS GUARANTY, INCLUDING THE WAIVER OF JURY  TRIAL,
AND HAS BEEN ADVISED BY COUNSEL AS NECESSARY OR APPROPRIATE.

WITNESS the due execution hereof as a document under seal, as  of  the
date first written above, with the intent to be legally bound hereby.

                                GREAT PLAINS ENERGY INCORPORATED



Attest:  ___________________    By:  ___________________________
                                                          (SEAL)
Print Name:  _______________    Print Name:  ___________________

Title:  ____________________    Title:  ________________________


                                  -4-

<PAGE>


                              SCHEDULE A

                                  To

                   GUARANTY AND SURETYSHIP AGREEMENT


                             DEFINED TERMS

"ATTRIBUTABLE INDEBTEDNESS" means, on any date, (a) in respect of any
Capitalized Lease Obligation of any person, the capitalized amount
thereof that would appear on a balance sheet of such person prepared
as of such date in accordance with GAAP, and (b) in respect of any
Synthetic Lease Obligation, the capitalized amount of the remaining
lease payments under the relevant lease that would appear on a balance
sheet of such person prepared as of such date in accordance with GAAP
if such lease were accounted for as a Capitalized Lease.

"CAPITALIZED LEASE" of a person means any lease of property by such
person as lessee which would be capitalized on a balance sheet of such
person prepared in accordance with GAAP.

"CAPITALIZED LEASE OBLIGATIONS" of a person means the amount of the
obligations of such person under Capitalized Leases which would be
shown as a liability on a balance sheet of such person prepared in
accordance with GAAP.

"CONSOLIDATED EBITDA" means, for any period, for the Guarantor and its
Consolidated Subsidiaries, an amount equal to the result of (i)
Consolidated Net Income PLUS (ii) Consolidated Interest charges PLUS
(iii) the amount of taxes, based on or measured by income, used or
included in the determination of such Consolidated Net Income PLUS
(iv) the amount of depreciation and amortization expense deducted in
determining such Consolidated Net Income PLUS (v) all other non-cash
items that reduce Consolidated Net Income for such period MINUS (vi)
all non-cash items that increase Consolidated Net Income for such
period.

"CONSOLIDATED INTEREST CHARGES" means, for the Guarantor and its
Consolidated Subsidiaries for any period, the sum of (i) all interest,
premium payments, fees, charges and related expenses of the Guarantor
and it Consolidated Subsidiaries in connection with borrowed money
(including capitalized interest) or in connection with the deferred
purchase price of assets, in each case to the extent treated as
interest in accordance with GAAP, and (ii) the portion of rent expense
of the Guarantor and its Consolidated Subsidiaries with respect to
such period under capital leases that is treated as interest in
accordance with GAAP.  It is understood and agreed that Consolidated
Interest Charges shall not include any obligations of the Guarantor or
any Consolidated Subsidiary with respect to subordinated, deferrable
interest debt securities, and any related securities issued by a trust
or other special purpose entity in connection therewith.

"CONSOLIDATED NET INCOME" means, for any period, for the Guarantor and
its Consolidated Subsidiaries, the net income of the Guarantor and its
Consolidated Subsidiaries from continuing operation, excluding
extraordinary items for that period.

"CONSOLIDATED SUBSIDIARIES" means, as to any person, each Subsidiary
of such person (whether now existing or hereafter created or acquired)
the financial statement of which shall be (or should have been)
consolidated with the financial statements of such person in
accordance with GAAP.

"CONTINGENT OBLIGATION" of a person means any agreement, undertaking
or arrangement by which such person assumes, guarantees, endorses,
contingently agrees to purchase or provide fund for the payment of, or
otherwise becomes or is contingently liable upon, the obligation or
liability of any other person, or agrees to maintain the net worth or
working capital or otherwise becomes or is contingently liable upon,
the obligation or liability of any other person, or agrees to maintain
the net worth or working capital or other financical condition of any
other person, or otherwise assures any creditor of such other person
against loss.

"INDEBTEDNESS" means, as to any person at any particular time, all of
the following, without duplication, to the extent recourse may be had
to the assets or properties of such person in respect thereof: (i) all
obligations of such person for borrowed money and all obligations of
such person evidenced by bonds, debentures, notes, loan agreements or
other similar instruments; (ii) any direct or contingent obligations
of such person in the aggregate in excess of $2,000,000 arising under
letters of credit (including standby and commercial), banker's
acceptances, bank guaranties, surety bonds and similar instruments;
(ii) net obligations of such person under Swap Contracts; (iv) all
obligations of such Persons to pay the deferred purchase price of
property or services (except trade accounts payable arising, and
accrued expenses incurred, in the ordinary course of business), and
indebtedness (excluding prepaid interest thereon) secured by a lien on
property owned or being purchased by

                                  -5-

<PAGE>

such person (including indebtedness arising under conditional sales or
other title retention agreements), whether or not such indebtedness
shall have been assumed by such person or is limited in recourse; (v)
cCapitalized lLease oObligations and sSynthetic lLease oObligations of
such person; and (vi) all Contingent Obligations of such person in
respect of any of the foregoing.

For all purposes hereof, the Indebtedness of any person shall include
the Indebtedness of any partnership or joint venture in which such
person is a general partner or a joint venturer, unless such
Indebtedness is non-recourse to such person.  It is understood and
agreed that Indebtedness (including Contingent Obligations) shall not
include any obligations of the Guarantor with respect to subordinated,
deferrable interest debt securities, and any related securities issued
by a trust or other special purpose entity in connection therewith, as
long as the maturity date of such debt is subsequent to the scheduled
facility termination date for the Guarantor's existing Credit
Agreement; PROVIDED that the amount of mandatory principal
amortization or defeasance of such debt prior to the scheduled
facility termination date shall be included in this definition of
Indebtedness.  The amount of any cCapitalized lLease oObligation ofr
Synthetic Lease Obligation as of any date shall be deemed to be the
amount of aAttributable iIndebtedness in respect thereof as of such
date.

"INTEREST COVERAGE RATIO" means, as of any date of determination, the
ratio of (a) Consolidated EBITDA for the period of the four prior
fiscal quarters ending on such date to (b) Consolidated Interest
Charges during such period.

"PROJECT FINANCE SUBSIDIARY" means any Subsidiary that meets the
following requirements: (i) it is primarily engaged, directly or
indirectly, in the ownership, operation and/or financing of
independent power production and related facilities and assets; and
(ii) neither the Guarantor nor any other Subsidiary (other than
another Project Finance Subsidiary) has any liability, contingent or
otherwise, for the Indebtedness or other obligations of such
Subsidiary (other than non-recourse liability resulting from the
pledge of stock of such Subsidiary).

"SHAREHOLDERS' EQUITY" means, as of any date of determination for the
Borrower and its Consolidated Subsidiaries on a consolidated basis,
shareholders' equity as of that date determined in accordance with
GAAP.

"SWAP CONTRACT" means (i) any and all rate swap transactions, basis
swaps, credit derivative transactions, forward rate transactions,
commodity swaps, commodity options, forward commodity contracts,
equity or equity index swaps or options, bond or bond price or forward
bond index transactions, collar transactions, currency swap
transaction, cross-currency rate swap transaction, currency options,
spot contracts, or any other similar transactions or any combination
of any of the foregoing (including any option to enter into any of the
foregoing), whether or not any such transaction is governed by or
subject to any master agreement, and (ii) any and all transactions of
any kind, and the related confirmations, which are subject to the
terms and conditions of, or governed by, any form of master agreement
published by the International Swaps and Derivatives Association,
Inc., any International Foreign Exchange Master Agreement, or any
other master agreement (any such master agreement, together with any
related schedules, a "Master Agreement"), including any such
obligations or liabilities under any Master Agreement.

"SYNTHETIC LEASE OBLIGATION" means the monetary obligation of a person
under (a) a so-called synthetic or off-balance sheet or tax retention
lease, or (b) an agreement for the use or possession of property
creating obligations that do not appear on the balance sheet of such
person but which, upon the insolvency or bankruptcy of such person,
would be characterized as the indebtedness of such person (without
regard to accounting treatment).

"TOTAL CAPITALIZATION" means Total Indebtedness of the guarantor and
its Consolidated Subsidiaries plus the sum of (i) Shareholder's Equity
and (ii) to the extent not otherwise included in Indebtedness or
Shareholder's Equity, preferred and preference stock and securities of
the Guarantor and its Subsidiaries included in a consolidated balance
sheet of the Guarantor and its Consolidated Subsidiaries in accordance
with GAAP.

"TOTAL INDEBTEDNESS" means all Indebtedness of the Guarantor and its
Consolidated Subsidiaries on a consolidated basis, excluding (i)
Indebtedness arising under Swap Contracts entered into in the ordinary
course of business to hedge bona fide transactions and business risks
and not for speculation, (ii) Indebtedness of Project Finance
Subsidiaries, (iii) Contingent Obligations incurred after May 15, 1996
with respect to Indebtedness of Strategic Energy, L.L.C. in an
aggregate amount not exceeding $275,000,000 and (iv) Indebtedness of
KLT Investments Inc. incurred in connection with the acquisition and
maintenance of its interest (whether direct or indirect) in low income
housing projects.

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