FORM 10-Q

                SECURITIES AND EXCHANGE COMMISSION

                     WASHINGTON, D.C.  20549

   [x]       QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                 SECURITIES EXCHANGE ACT OF 1934


           For the quarterly period ended June 30, 1998


   [ ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
               THE SECURITIES EXCHANGE ACT OF 1934

       For the transition period from          to         

                  Commission file number 1-7324

                  KANSAS GAS AND ELECTRIC COMPANY           
      (Exact name of registrant as specified in its charter)

           KANSAS                                              48-1093840    
(State or other jurisdiction of                             (I.R.S.  Employer
 incorporation or organization)                            Identification No.)

                           P.O. BOX 208
                      WICHITA, KANSAS  67201
             (Address of Principal Executive Offices)

                           316/261-6611
       (Registrant's telephone number, including area code)

Indicated by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.

                      Yes   X      No       


Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

           Class                               Outstanding at August 12, 1998
 Common Stock (No par value)                           1,000 Shares       


Registrant meets the conditions of General Instruction H(1)(a) and (b) to
Form 10-Q and is therefore filing this form with a reduced disclosure format.


<PAGE 2>
                 KANSAS GAS AND ELECTRIC COMPANY
                              INDEX



                                                                       Page

PART I.  Financial Information

     Item 1.  Financial Statements

              Balance Sheets                                             3 

              Statements of Income                                     4 - 6

              Statements of Comprehensive Income                         7

              Statements of Cash Flows                                 8 - 9

              Statements of Common Shareowners' Equity                  10 

              Notes to Financial Statements                             11  

     Item 2.  Management's Discussion and Analysis of Financial
                 Condition and Results of Operations                    14

     Item 3.  Quantitative and Qualitative Disclosures About
                 Market Risk                                            19

Part II.  Other Information

     Item 3.  Defaults Upon Senior Securities                           20

     Item 4.  Submission of Matters to a Vote of Security Holders       20

     Item 5.  Other Information                                         20

     Item 6.  Exhibits and Reports on Form 8-K                          20

Signature                                                               21

<PAGE 3>
<TABLE>
                 KANSAS GAS AND ELECTRIC COMPANY
                          BALANCE SHEETS
                      (Dollars in Thousands)
                          (Unaudited)
<CAPTION>

                                                                 June  30,     December 31,
                                                                   1998            1997    
<S>                                                             <C>              <C>
ASSETS 

CURRENT ASSETS:
  Cash and cash equivalents . . . . . . . . . . . . . . . .     $       42       $       43
  Accounts receivable, (net). . . . . . . . . . . . . . . .         81,424           66,654
  Advances to parent company (net). . . . . . . . . . . . .         43,805           72,558
  Inventories and supplies, at average cost . . . . . . . .         41,773           41,019
  Prepaid expenses and other. . . . . . . . . . . . . . . .         29,727           17,165
    Total Current Assets. . . . . . . . . . . . . . . . . .        196,771          197,439
                                                                                           
PROPERTY, PLANT AND EQUIPMENT (net) . . . . . . . . . . . .      2,535,660        2,565,175

OTHER ASSETS:
  Regulatory assets . . . . . . . . . . . . . . . . . . . .        275,656          278,568
  Other . . . . . . . . . . . . . . . . . . . . . . . . . .         55,004           75,926
    Total Other Assets. . . . . . . . . . . . . . . . . . .        330,660          354,494

TOTAL ASSETS. . . . . . . . . . . . . . . . . . . . . . . .     $3,063,091       $3,117,108

                                                                              
LIABILITIES AND SHAREOWNERS' EQUITY 
             
CURRENT LIABILITIES:  
  Short-term debt . . . . . . . . . . . . . . . . . . . . .     $     -          $   45,000 
  Accounts payable. . . . . . . . . . . . . . . . . . . . .         88,614           81,986
  Accrued liabilities . . . . . . . . . . . . . . . . . . .         32,729           32,745
  Accrued income taxes. . . . . . . . . . . . . . . . . . .          7,544            4,212
  Other . . . . . . . . . . . . . . . . . . . . . . . . . .          5,912            4,032
    Total Current Liabilities . . . . . . . . . . . . . . .        134,799          167,975

LONG-TERM LIABILITIES:
  Long-term debt (net). . . . . . . . . . . . . . . . . . .        684,105          684,128
  Deferred income taxes and investment tax credits. . . . .        808,551          820,838
  Deferred gain from sale-leaseback . . . . . . . . . . . .        215,865          221,779
  Other . . . . . . . . . . . . . . . . . . . . . . . . . .         84,370           87,909
    Total Long-term Liabilities . . . . . . . . . . . . . .      1,792,891        1,814,654

COMMITMENTS AND CONTINGENCIES         

SHAREOWNERS' EQUITY (See Statements):
  Common stock, without par value,
       authorized and issued 1,000 shares . . . . . . . . .      1,065,634        1,065,634
  Retained earnings . . . . . . . . . . . . . . . . . . . .         69,767           68,845
    Total Shareowners' Equity . . . . . . . . . . . . . . .      1,135,401        1,134,479
                                                                              
TOTAL LIABILITIES AND SHAREOWNERS' EQUITY . . . . . . . . .     $3,063,091       $3,117,108


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

</TABLE>
<PAGE 4>
<TABLE>
                 KANSAS GAS AND ELECTRIC COMPANY
                      STATEMENTS OF INCOME 
                      (Dollars in Thousands)
                           (Unaudited)
<CAPTION>

                                                                    Three Months Ended   
                                                                          June 30,        
                                                                    1998           1997    
<S>                                                              <C>            <C>  
SALES . . . . . . . . . . . . . . . . . . . . . . . . .          $  162,816     $  148,826

COST OF SALES . . . . . . . . . . . . . . . . . . . . .              36,791         26,540

GROSS PROFIT. . . . . . . . . . . . . . . . . . . . . .             126,025        122,286 

OPERATING EXPENSES:  
  Operating and maintenance expense . . . . . . . . . .              39,117         48,123
  Depreciation and amortization . . . . . . . . . . . .              24,676         28,569
  Selling, general and administrative expense . . . . .              18,120         13,173 
      Total Operating Expenses. . . . . . . . . . . . .              81,913         89,865
                                                                
INCOME FROM OPERATIONS. . . . . . . . . . . . . . . . .              44,112         32,421
                                                                
OTHER INCOME (EXPENSE). . . . . . . . . . . . . . . . .               6,635            606 
                                                                 
INCOME BEFORE INTEREST AND TAXES. . . . . . . . . . . .              50,747         33,027
                                                                
INTEREST EXPENSE:
  Interest expense on long-term debt. . . . . . . . . .              11,505         11,525
  Interest expense on short-term debt and other . . . .                 828            999
      Total Interest Expense. . . . . . . . . . . . . .              12,333         12,524 
                                                         
INCOME BEFORE INCOME TAXES. . . . . . . . . . . . . . .              38,414         20,503

INCOME TAXES. . . . . . . . . . . . . . . . . . . . . .               9,907          5,011

NET INCOME. . . . . . . . . . . . . . . . . . . . . . .          $   28,507     $   15,492



The Notes to Financial Statements are an integral part of these statements. 
</TABLE>
<PAGE 5>
<TABLE>
                 KANSAS GAS AND ELECTRIC COMPANY
                      STATEMENTS OF INCOME 
                      (Dollars in Thousands)
                           (Unaudited)
<CAPTION>

                                                                      Six Months Ended   
                                                                          June 30,        
                                                                    1998           1997    
<S>                                                              <C>            <C>
SALES . . . . . . . . . . . . . . . . . . . . . . . . .          $  297,382     $  292,617

COST OF SALES . . . . . . . . . . . . . . . . . . . . .              62,711         52,764

GROSS PROFIT. . . . . . . . . . . . . . . . . . . . . .             234,671        239,853 

OPERATING EXPENSES:  
  Operating and maintenance expense . . . . . . . . . .              74,661         93,301
  Depreciation and amortization . . . . . . . . . . . .              49,109         57,492
  Selling, general and administrative expense . . . . .              30,756         26,275 
      Total Operating Expenses. . . . . . . . . . . . .             154,526        177,068
                                                                
INCOME FROM OPERATIONS. . . . . . . . . . . . . . . . .              80,145         62,785
                                                                
OTHER INCOME (EXPENSE). . . . . . . . . . . . . . . . .              11,478           (831)
                                                                 
INCOME BEFORE INTEREST AND TAXES. . . . . . . . . . . .              91,623         61,954
                                                                
INTEREST EXPENSE:
  Interest expense on long-term debt. . . . . . . . . .              22,994         23,007
  Interest expense on short-term debt and other . . . .               1,698          2,556
      Total Interest Expense. . . . . . . . . . . . . .              24,692         25,563 
                                                         
INCOME BEFORE INCOME TAXES. . . . . . . . . . . . . . .              66,931         36,391

INCOME TAXES. . . . . . . . . . . . . . . . . . . . . .              16,009          9,727

NET INCOME. . . . . . . . . . . . . . . . . . . . . . .          $   50,922     $   26,664



The Notes to Financial Statements are an integral part of these statements. 
</TABLE>
<PAGE 6>
<TABLE>
                 KANSAS GAS AND ELECTRIC COMPANY
                      STATEMENTS OF INCOME 
                      (Dollars in Thousands)
                           (Unaudited)
<CAPTION>

                                                                    Twelve Months Ended    
                                                                          June 30,        
                                                                    1998           1997    
<S>                                                              <C>            <C>
SALES . . . . . . . . . . . . . . . . . . . . . . . . .          $  619,210     $  639,115

COST OF SALES . . . . . . . . . . . . . . . . . . . . .             139,541        117,854

GROSS PROFIT. . . . . . . . . . . . . . . . . . . . . .             479,669        521,261 

OPERATING EXPENSES:  
  Operating and maintenance expense . . . . . . . . . .             161,513        174,255
  Depreciation and amortization . . . . . . . . . . . .             115,040        115,711
  Selling, general and administrative expense . . . . .              61,748         54,254 
      Total Operating Expenses. . . . . . . . . . . . .             338,301        344,220
                                                                
INCOME FROM OPERATIONS. . . . . . . . . . . . . . . . .             141,368        177,041
                                                                
OTHER INCOME (EXPENSE). . . . . . . . . . . . . . . . .               8,287          3,549 
                                                                 
INCOME BEFORE INTEREST AND TAXES. . . . . . . . . . . .             149,655        180,590
                                                                
INTEREST EXPENSE:
  Interest expense on long-term debt. . . . . . . . . .              46,049         46,012
  Interest expense on short-term debt and other . . . .               3,530          9,945
      Total Interest Expense. . . . . . . . . . . . . .              49,579         55,957 
                                                         
INCOME BEFORE INCOME TAXES. . . . . . . . . . . . . . .             100,076        124,633

INCOME TAXES. . . . . . . . . . . . . . . . . . . . . .              23,690         34,648

NET INCOME. . . . . . . . . . . . . . . . . . . . . . .          $   76,386     $   89,985



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

</TABLE>
<PAGE 7>
<TABLE>
                KANSAS GAS AND ELECTRIC COMPANY
               STATEMENTS OF COMPREHENSIVE INCOME
                     (Dollars in Thousands)
                          (Unaudited)
<CAPTION>

                                                                    Three Months Ended  
                                                                         June 30,       
                                                                    1998          1997  
<S>                                                               <C>           <C>
Net income. . . . . . . . . . . . . . . . . . . . . . . . .       $ 28,507      $ 15,492

Other comprehensive income. . . . . . . . . . . . . . . . .           -             -    

Comprehensive income. . . . . . . . . . . . . . . . . . . .       $ 28,507      $ 15,492





                                                                     Six Months Ended   
                                                                         June 30,       
                                                                    1998          1997  

Net income. . . . . . . . . . . . . . . . . . . . . . . . .       $ 50,922      $ 26,664

Other comprehensive income. . . . . . . . . . . . . . . . .           -             -    

Comprehensive income. . . . . . . . . . . . . . . . . . . .       $ 50,922      $ 26,664

                                



                                                                   Twelve Months Ended 
                                                                         June 30,      
                                                                    1998         1997  

Net income. . . . . . . . . . . . . . . . . . . . . . . . .       $ 76,386     $ 89,985

Other comprehensive income. . . . . . . . . . . . . . . . .           -            -   

Comprehensive income. . . . . . . . . . . . . . . . . . . .       $ 76,386     $ 89,985


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

</TABLE>
<PAGE 8>
<TABLE>
                 KANSAS GAS AND ELECTRIC COMPANY
                    STATEMENTS OF CASH FLOWS 
                      (Dollars in Thousands)
                           (Unaudited)
<CAPTION>

                                                                     Six Months Ended     
                                                                         June 30,         
                                                                    1998           1997   
<S>                                                              <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:                                        
  Net income. . . . . . . . . . . . . . . . . . . . . . . . .    $   50,922     $   26,664
  Adjustments to reconcile net income to net cash
    provided by operating activities:  
  Depreciation and amortization . . . . . . . . . . . . . . .        49,109         57,492 
  Amortization of gain from sale-leaseback. . . . . . . . . .        (5,914)        (5,367)
  Changes in working capital items:                                                       
    Accounts receivable, (net). . . . . . . . . . . . . . . .       (14,770)         2,068 
    Inventories and supplies. . . . . . . . . . . . . . . . .          (754)            27 
    Prepaid expenses and other. . . . . . . . . . . . . . . .       (12,562)       (17,046)
    Accounts payable. . . . . . . . . . . . . . . . . . . . .         6,628         22,112 
    Accrued liabilities . . . . . . . . . . . . . . . . . . .           (16)        (4,215)
    Accrued income taxes. . . . . . . . . . . . . . . . . . .         3,332          4,651
    Other . . . . . . . . . . . . . . . . . . . . . . . . . .         1,880            130 
  Changes in other assets and liabilities . . . . . . . . . .        16,592         14,802 
      Net cash flows from operating activities. . . . . . . .        94,447        101,318 
                                                                                      
CASH FLOWS USED IN INVESTING ACTIVITIES:                                                  
  Additions to property, plant and equipment (net). . . . . .       (28,116)       (45,541)
      Net cash flows (used in) investing activities . . . . .       (28,116)       (45,541)
                                                                                      
CASH FLOWS FROM FINANCING ACTIVITIES:                                                     
  Short-term debt (net) . . . . . . . . . . . . . . . . . . .       (45,000)      (212,300)
  Advances to parent company (net). . . . . . . . . . . . . .        28,753        206,579 
  Retirements of long-term debt . . . . . . . . . . . . . . .           (85)           (65)
  Dividends to parent company . . . . . . . . . . . . . . . .       (50,000)       (50,000)
     Net cash flows (used in) financing activities. . . . . .       (66,332)       (55,786)
                                                                                     
NET (DECREASE) IN CASH AND CASH EQUIVALENT. . . . . . . . . .            (1)            (9)

CASH AND CASH EQUIVALENTS:
  Beginning of period . . . . . . . . . . . . . . . . . . . .            43             44 
  End of period . . . . . . . . . . . . . . . . . . . . . . .    $       42     $       35
                                                                                    

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION                                   
CASH PAID FOR:                                                                      
   Interest on financing activities (net of amount                                  
       capitalized) . . . . . . . . . . . . . . . . . . . . .    $   51,694      $  54,342
   Income taxes . . . . . . . . . . . . . . . . . . . . . . .        19,220         20,100


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

</TABLE>
<PAGE 9>
<TABLE>
                 KANSAS GAS AND ELECTRIC COMPANY
                    STATEMENTS OF CASH FLOWS 
                      (Dollars in Thousands)
                           (Unaudited)
<CAPTION>

                                                                    Twelve Months Ended   
                                                                         June 30,         
                                                                    1998           1997   
<S>                                                              <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:                                        
  Net income. . . . . . . . . . . . . . . . . . . . . . . . .    $   76,386     $   89,985
  Adjustments to reconcile net income to net cash
    provided by operating activities:  
  Depreciation and amortization . . . . . . . . . . . . . . .       115,040        115,711 
  Amortization of gain from sale-leaseback. . . . . . . . . .       (11,828)       (10,187)
  Changes in working capital items:                                                       
    Accounts receivable, (net). . . . . . . . . . . . . . . .        (7,821)         8,049 
    Inventories and supplies. . . . . . . . . . . . . . . . .         1,846          1,821 
    Prepaid expenses and other. . . . . . . . . . . . . . . .         4,310         (3,610)
    Accounts payable. . . . . . . . . . . . . . . . . . . . .        17,683         12,453 
    Accrued liabilities . . . . . . . . . . . . . . . . . . .           489         (4,981)
    Accrued income taxes. . . . . . . . . . . . . . . . . . .        (8,335)        21,745
    Other . . . . . . . . . . . . . . . . . . . . . . . . . .         1,936            191 
  Changes in other assets and liabilities . . . . . . . . . .        (9,223)        21,206 
      Net cash flows from operating activities. . . . . . . .       180,483        252,383 
                                                                                      
CASH FLOWS USED IN INVESTING ACTIVITIES:                                                  
  Additions to property, plant and equipment (net). . . . . .       (70,740)       (82,520)
      Net cash flows (used in) investing activities . . . . .       (70,740)       (82,520)
                                                                                      
CASH FLOWS FROM FINANCING ACTIVITIES:                                                     
  Short-term debt (net) . . . . . . . . . . . . . . . . . . .       (10,000)      (240,000)
  Advances to parent company (net). . . . . . . . . . . . . .           349        170,149 
  Retirements of long-term debt . . . . . . . . . . . . . . .           (85)           (65)
  Dividends to parent company . . . . . . . . . . . . . . . .      (100,000)      (100,000)
     Net cash flows (used in) financing activities. . . . . .      (109,736)      (169,916)
                                                                                     
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS. . . . .             7            (53)

CASH AND CASH EQUIVALENTS:
  Beginning of period . . . . . . . . . . . . . . . . . . . .            35             88 
  End of period . . . . . . . . . . . . . . . . . . . . . . .    $       42     $       35

                                                                                     
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION                                   
CASH PAID FOR:                                                                      
   Interest on financing activities (net of amount                                  
       capitalized) . . . . . . . . . . . . . . . . . . . . .    $   71,770     $   82,402
   Income taxes . . . . . . . . . . . . . . . . . . . . . . .        51,220         34,600 


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

</TABLE>
<PAGE 10>
<TABLE>
                 KANSAS GAS AND ELECTRIC COMPANY
             STATEMENTS OF COMMON SHAREOWNERS' EQUITY
                      (Dollars in Thousands)
                           (Unaudited)
<CAPTION>

                                                                                     Accumulated  
                                                                                        Other     
                                                                                    Comprehensive 
                                                        Common        Retained         Income     
                                                         Stock        Earnings          (net)     
<S>                                                   <C>            <C>            <C>
BALANCE DECEMBER 31, 1995, 1,000 shares. . . . . .    $1,065,634     $  120,443     $        -   

Net income . . . . . . . . . . . . . . . . . . . .                       96,274 
Dividend to parent company . . . . . . . . . . . .                     (100,000)                 


BALANCE DECEMBER 31, 1996, 1,000 shares. . . . . .     1,065,634        116,717              -   

Net Income . . . . . . . . . . . . . . . . . . . .                       52,128     
Dividend to parent company . . . . . . . . . . . .                     (100,000)                 


BALANCE DECEMBER 31, 1997, 1,000 shares. . . . . .     1,065,634         68,845              -   

Net Income . . . . . . . . . . . . . . . . . . . .                       50,922 
Dividend to parent company . . . . . . . . . . . .                      (50,000)                 


BALANCE JUNE 30, 1998, 1,000 shares. . . . . . . .    $1,065,634     $   69,767     $        -   


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

</TABLE>
<PAGE 11>
                 KANSAS GAS AND ELECTRIC COMPANY
                  NOTES TO FINANCIAL STATEMENTS
                           (Unaudited)


1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    Description of Business:  Kansas Gas and Electric Company (the company,
KGE) is a rate-regulated electric utility and wholly-owned subsidiary of
Western Resources, Inc. (Western Resources).  The company is engaged
principally in the production, purchase, transmission, distribution, and sale
of electricity.  The company serves approximately 280,000 electric customers
in southeastern Kansas.  At December 31, 1997, the company had no employees. 
All employees are provided by the company's parent, Western Resources which
allocates costs related to the employees of the company. 

     The company owns 47% of Wolf Creek Nuclear Operating Corporation
(WCNOC), the operating company for Wolf Creek Generating Station (Wolf Creek). 
The company records its proportionate share of all transactions of WCNOC as it
does other jointly-owned facilities.

    The company's unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and in accordance with the instructions to Form 10-Q. 
Accordingly, certain information and footnote disclosures normally included in
financial statements presented in accordance with generally accepted
accounting principles have been condensed or omitted. These financial
statements and notes should be read in conjunction with the financial
statements and the notes included in the company's 1997 Annual Report on Form
10-K.  The accounting and rates of the company are subject to requirements of
the Kansas Corporation Commission (KCC) and the Federal Energy Regulatory
Commission (FERC).

    New Pronouncements:  Effective January 1, 1998, the company adopted the
provisions of Statement of Financial Accounting Standards No. 130, "Reporting
Comprehensive Income" (SFAS 130).  This statement establishes standards for
reporting and display of comprehensive income and its components (revenues,
expenses, gains and losses) in a full set of general-purpose financial
statements.

    In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" (SFAS 133).  This statement established
accounting and reporting standards for derivative instruments and for hedging
activities.  SFAS 133 requires that all derivatives be recognized as either
assets or liabilities in the balance sheet and that these instruments be
measured at fair value.  The company will adopt SFAS 133 no later than January
1, 2000.  Management is presently evaluating the impact that adoption of SFAS
133 will have on the company's financial position and results of operations.

    Reclassifications:  Certain amounts in prior years have been reclassified
to conform with classifications used in the current year presentation.
<PAGE 12>

2.  WESTERN RESOURCES AND KANSAS CITY POWER & LIGHT COMPANY MERGER AGREEMENT

    On February 7, 1997, Kansas City Power & Light Company (KCPL) and Western
Resources entered into an agreement whereby KCPL would be combined with
Western Resources.  In December 1997, representatives of Western Resources'
financial advisor indicated that they believed it was unlikely that they would
be in a position to issue a fairness opinion required for the merger on the
basis of the previously announced terms.

    On March 18, 1998, Western Resources and KCPL announced a restructuring
of their February 7, 1997 merger agreement which will result in the formation
of Westar Energy, a new regulated electric utility company.  Under the terms
of the merger agreement, the electric utility operations of Western Resources
will be transferred to the company, and KCPL and the company will be merged
into NKC, Inc., a subsidiary of Western Resources.  NKC, Inc. will be renamed
Westar Energy.  In addition, under the merger agreement, KCPL shareowners will
receive $23.50 of Western Resources common stock per KCPL share, subject to a
collar mechanism, and one share of Westar Energy common stock per KCPL share. 
Upon consummation of the combination, Western Resources will own approximately
80.1% of the outstanding equity of Westar Energy and KCPL shareowners will own
approximately 19.9%.  As part of the combination, Westar Energy will assume
all of the electric utility related assets and liabilities of Western
Resources, KCPL, and the company.

    Westar Energy will assume $2.7 billion in debt, consisting of $1.9
billion of indebtedness for borrowed money of Western Resources and the
company, and $800 million from KCPL.  Long-term debt of Western Resources and
the company was $2.1 billion at June 30, 1998.  Under the terms of the merger
agreement, it is intended that Western Resources will be released from its
obligations with respect to the company's debt to be assumed by Westar Energy.

    Consummation of the merger is subject to customary conditions.  On July
30, 1998 the Western Resources' shareowners and the shareowners of KCPL voted
to approve the amended merger agreement at special meetings of shareowners.
Western Resources estimates the transaction to close by mid-1999, subject to
receipt of all necessary approvals from regulatory and government agencies.

    On August 7, 1998 Western Resources and KCPL filed an amended application
with the Federal Energy Regulatory Commission (FERC) to approve the Western
Resources/KCPL merger and the formation of Westar Energy.

    KCPL is a public utility company engaged in the generation, transmission,
distribution, and sale of electricity to customers in western Missouri and
eastern Kansas.  The company, KCPL and Western Resources have joint interests
in certain electric generating assets, including Wolf Creek.

    At June 30, 1998, Western Resources had deferred approximately $7 million
related to the KCPL transaction. These costs will be included in the
determination of total consideration upon consummation of the transaction.
<PAGE 13>

3.  COMMITMENTS AND CONTINGENCIES

    Manufactured Gas Sites:  The company is associated with three former
manufactured gas sites which may contain coal tar and other potentially
harmful materials.  The company and the Kansas Department of Health and
Environment (KDHE) entered into a consent agreement governing all future work
at the three sites.  The terms of the consent agreement will allow the company
to investigate these sites and set remediation priorities based upon the
results of the investigations and risk analyses.  At June 30, 1998, the costs
incurred for preliminary site investigation and risk assessment have been
minimal.

    For additional information on Commitments and Contingencies, see Note 2
of the company's 1997 Annual Report on Form 10-K.


4.  INCOME TAXES

    Total income tax expense included in the Statements of Income reflects
the Federal statutory rate of 35%.  The Federal statutory rate produces
effective income tax rates of 25.8% and 24.4% for the three month periods,
23.9% and 26.7% for the six month periods, and 23.7% and 27.8% for the twelve
month periods ended June 30, 1998 and 1997, respectively.  The effective
income tax rates vary from the Federal statutory rate due to the permanent
differences, including the amortization of investment tax credits, and
accelerated amortization of certain deferred income taxes. 


<PAGE 14>
                 KANSAS GAS AND ELECTRIC COMPANY

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS


INTRODUCTION

    In Management's Discussion and Analysis we explain the general financial
condition and the operating results for the company.  We explain:

      -  What factors affect our business
      -  What our earnings and costs were for the three, six and twelve month
            periods ended June 30, 1998 and 1997
      -  Why these earnings and costs differed from period to period
      -  How our earnings and costs affect our overall financial condition
      -  Any other items that particularly affect our financial condition or
            earnings

    The following Management's Discussion and Analysis of Financial Condition
and Results of Operations updates the information provided in the 1997 Annual
Report on Form 10-K and should be read in conjunction with Management's
Discussion and Analysis of Financial Condition and Results of Operations in
the company's 1997 Annual Report on Form 10-K.

    Forward-Looking Statements:  Certain matters discussed here and elsewhere
in this Form 10-Q are "forward-looking statements."  The Private Securities
Litigation Reform Act of 1995 has established that these statements qualify
for safe harbors from liability.  Forward-looking statements may include words
like we "believe," "anticipate," "expect" or words of similar meaning. 
Forward-looking statements describe our future plans, objectives, expectations
or goals.  Such statements address future events and conditions concerning
capital expenditures, earnings, litigation, rate and other regulatory matters,
possible corporate restructurings, mergers, acquisitions, dispositions,
liquidity and capital resources, interest and dividend rates, environmental
matters, changing weather, nuclear operations and accounting matters.  What
happens in each case could vary materially from what we expect because of such
things as electric utility deregulation, including ongoing state and federal
activities; future economic conditions; legislative developments; our
regulatory and competitive markets; and other circumstances affecting
anticipated operations, sales and costs. 

FINANCIAL CONDITION

    General:  Net income for the three and six months ended June 30, 1998 of
$28.5 million and $50.9 million increased substantially from net income of
$15.5 million and $26.7 million for the same periods in 1997, respectively. 
The increases in net income were primarily due to increased electric sales
because of warmer than normal weather, lower operating and maintenance costs,
the completion of the amortization of phase-in revenues in December 1997, and
increased other income. 

    Net income for the twelve months ended June 30, 1998, of $76.4 million,
decreased from net income of $90.0 million for the comparable period of 1997. 
The decrease was primarily attributable to a $36.3 million rate reduction on
February 1, 1997, and increased cost of sales.
<PAGE 15>
OPERATING RESULTS

    The following discussion explains significant changes in results of
sales, cost of sales, operating expenses, other income (expense), interest
expense and income taxes between the three, six and twelve month periods ended
June 30, 1998 and comparable periods of 1997.

    Sales:  Sales are based on sales volumes and rates authorized by the
Kansas Corporation Commission (KCC) and the Federal Energy Regulatory
Commission (FERC).  Rates charged for the sale and delivery of electricity are
designed to recover the cost of service and allow investors a fair rate of
return.  Our sales vary with levels of energy deliveries.  Changing weather
affects the amount of energy our customers use.  Very hot summers and very
cold winters prompt more demand, especially among our residential customers. 
Mild weather reduces demand.

    Many things will affect our future sales.  They include:

      -  The weather
      -  Our electric rates
      -  Competitive forces
      -  Customer conservation efforts
      -  Wholesale demand
      -  The overall economy of our service area

    The following table reflects changes in retail electric energy deliveries
for the three, six and twelve months ended June 30, 1998 from the comparable
periods of 1997.                                                
                               3 Months     6 Months     12 Months
                                 Ended        Ended        Ended  
         Residential             20.1%        11.4%          7.0%  
         Commercial              11.2%         7.6%          5.3% 
         Industrial               1.8%         2.9%          3.4%
         Total Retail             9.4%         6.6%          5.0% 

    Sales increased 9.4% for the three months and 1.6% for the six months
ended June 30, 1998, primarily due to the increase in residential energy
deliveries as a result of warmer spring temperatures.  

    Partially offsetting these increases in sales was the implementation of
an  electric rate reduction of $10.0 million on June 1, 1998. 

    Sales decreased 3.1% for the twelve months ended June 30, 1998, primarily
due to electric rate decreases we implemented on February 1, 1997.  Although
energy deliveries increased, it was not enough to compensate for our lower
electric rates.  Also contributing to the decrease in sales was the decrease
in wholesale and interchange sales.

    Cost of Sales:  Items included in cost of sales are fuel expense and 
purchased power expense (electricity we purchase from others for resale).

    Electric fuel costs are included in base rates.  Therefore, if we wished
to recover an increase in fuel costs, we would have to file a request for
recovery in a rate filing with the KCC which could be denied in whole or in
part. Any increase in fuel costs from the projected average which the company
did not recover through rates would reduce our earnings.  The degree of any
such impact would be affected by a variety of factors, however, and thus
cannot be predicted.
<PAGE 16>
    Due to warmer than normal weather throughout the Midwest and lack of
power available for purchase on the wholesale market, the wholesale power
market has seen extreme volatility in prices and availability.  This
volatility could impact our cost of power purchases.

    Actual cost of fuel to generate electricity (coal, nuclear fuel, natural
gas or oil) and the amount of power purchased from other utilities increased
for each of the three periods ending June 30, 1998.  Cost of sales were $10.3
million, $9.9 million, and $21.7 million  higher for the three, six and twelve
months ended June 30, 1998, respectively.  With an increase in customer demand
for electricity and the availability of our La Cygne coal generation station
during 1998, we produced more electricity during the first six months of 1998
than in 1997.  The increase in net generation caused our fossil fuel costs to
increase for the three and six month periods ended June 30, 1998.

    The twelve month increase was primarily due to two of our generating
stations being unavailable to produce power.  Our Wolf Creek nuclear
generating station was off-line in the fourth quarter of 1997 for scheduled
maintenance and our La Cygne coal generation station was off-line during 1997
for an extended maintenance outage.  As a result, we purchased more power from
other utilities and burned more natural gas to generate electricity at our
facilities.  Natural gas is more costly to burn than coal and nuclear fuel for
generating electricity.

    OPERATING EXPENSES

    Operating and Maintenance Expense:  Total operating and maintenance
expense decreased $9.0 million, $18.6 million, and $12.7 million for the
three, six and twelve months ended June 30, 1998, respectively.  The decreases
were attributable to a decrease in KGE's portion of costs shared with Western
Resources which are associated with the dispatching of electric power.

    Depreciation and Amortization Expense:  Depreciation and amortization
expense decreased $3.9 million and $8.4 million for the three and six months
ended June 30, 1998 from the same periods in 1997, respectively, due to the
completion of the amortization of phase-in revenues in December 1997.  During
the first six months of 1997, we recorded $8.8 million of amortization for
phase-in revenues.  Depreciation and amortization expense for the twelve
months ended June 30, 1998 decreased less than $0.7 million from 1997 due to
the additional amortization of $8.8 million relating to phase-in revenues
recorded during the fourth quarter of 1997.

    Selling, General and Administrative Expense: Selling, general and
administrative expense increased $4.9 million, $4.5 million, and $7.5 million
for the three, six and twelve months ended June 30, 1998, respectively.  Storm
related restoration expenses and increased labor costs attributed to the
increases.

    Other Income and Deductions:  Other income (expense) includes
miscellaneous income and expenses not directly related to our operations. 
Other income and (expense) for the second quarter of 1998 increased $6.0
million.  Other income and (expense) for the six and twelve months ended June
30, 1998, increased $12.3 million and $4.7 million, respectively.
<PAGE 17>
    Interest Expense:  Interest expense includes the interest we paid on
outstanding debt.  We realized a decrease in interest expense for each of the
three periods ending June 30, 1998.  Our average outstanding short-term debt
balances were lower during all three periods which attributed to the decreases
in interest expense.  The interest we paid on long-term debt remained
virtually unchanged for all three periods. 


LIQUIDITY AND CAPITAL RESOURCES:

    The company's liquidity is a function of its ongoing construction and
maintenance program designed to improve facilities which provide electric
service and meet future customer service requirements.  Our ability to provide
the cash or debt to fund our capital expenditures depends upon many things,
including available resources, our financial condition and current market
conditions.

    Other than operations, our primary source of short-term cash is from
short-term bank loans and unsecured lines of credit.  At June 30, 1998, there
were no short-term borrowings compared to $45.0 million at December 31, 1997. 
Proceeds from the repayment of advances to the company's parent company have
been used to repay all current outstanding short-term debt.  The proceeds
received are reflected in the decrease in current assets, advances to parent
company (net) on the Balance Sheets.


MERGERS AND ACQUISITIONS

    Western Resources and Kansas City Power & Light Company Merger Agreement:
On February 7, 1997, KCPL and Western Resources entered into an agreement
whereby KCPL would be combined with Western Resources.  In December 1997,
representatives of Western Resources' financial advisor indicated that they
believed it was unlikely that they would be in a position to issue a fairness
opinion required for the merger on the basis of the previously announced
terms.

    On March 18, 1998, Western Resources and KCPL announced a restructuring
of their February 7, 1997 merger agreement which will result in the formation
of Westar Energy, a new regulated electric utility company.  Under the terms
of the merger agreement, the electric utility operations of Western Resources
will be transferred to the company, and KCPL and the company will be merged
into NKC, Inc., a subsidiary of Western Resources.  NKC, Inc. will be renamed
Westar Energy.  In addition, under the merger agreement, KCPL shareowners will
receive $23.50 of Western Resources common stock per KCPL share, subject to a
collar mechanism, and one share of Westar Energy common stock per KCPL share. 
Upon consummation of the combination, Western Resources will own approximately
80.1% of the outstanding equity of Westar Energy and KCPL shareowners will own
approximately 19.9%.  As part of the combination Westar Energy will assume all
of the electric utility related assets and liabilities of Western Resources,
KCPL, and the company.

    Westar Energy will assume $2.7 billion in debt, consisting of $1.9
billion of indebtedness for borrowed money of Western Resources and the
company, and $800 million from KCPL.  Long-term debt of Western Resources and
the company was $2.1 billion at June 30, 1998.  Under the terms of the merger
agreement, it is intended that Western Resources will be released from its
obligations with respect to the company's debt to be assumed by Westar Energy.
<PAGE 18>
    Consummation of the merger is subject to customary conditions.  On July
30, 1998 the Western Resources' shareowners and the shareowners of KCPL voted
to approve the amended merger agreement at special meetings of shareowners.
Western Resources estimates the transaction to close by mid-1999, subject to
receipt of all necessary approvals from regulatory and government agencies.

    On August 7, 1998 Western Resources and KCPL filed an amended application
with the Federal Energy Regulatory Commission (FERC) to approve the Western
Resources/KCPL merger and the formation of Westar Energy.

    KCPL is a public utility company engaged in the generation, transmission,
distribution, and sale of electricity to customers in western Missouri and
eastern Kansas.  The company, KCPL and Western Resources have joint interests
in certain electric generating assets, including Wolf Creek.  Following the
closing of the combination, Westar Energy is expected to have approximately
one million electric utility customers in Kansas and Missouri, approximately
$8.2 billion in assets and the ability to generate more than 8,000 megawatts
of electricity.

    At June 30, 1998, Western Resources had deferred approximately $7 million
related to the KCPL transaction. These costs will be included in the
determination of total consideration upon consummation of the transaction.


OTHER INFORMATION

    YEAR 2000 ISSUE:  We are currently addressing the effect of the Year 2000
Issue on our reporting systems and operations.  We face the Year 2000 Issue
because many computer systems and applications abbreviate dates by eliminating
the first two digits of the year, assuming that these two digits are always
"19".  On January 1, 2000, some computer programs may incorrectly recognize
the date as January 1, 1900.  Some computer systems may incorrectly process
critical financial and operational information, or stop processing altogether
because of the date abbreviation.  Calculations using the year 2000 will
affect computer applications before January 1, 2000.

    We have recognized the potential adverse effects the Year 2000 Issue
could have on our company.  In 1996, we established a formal Year 2000
remediation program to investigate and correct these problems in the main
computer systems of our company.  In 1997, we expanded the program to include
all business units and departments of our company.  The goal of our program is
to identify and assess every critical system potentially affected by the Year
2000 date change and to repair or replace those systems found to be
incompatible with Year 2000 dates.

    We have completed approximately 75% of our contingency plan for all
business units and departments of our company with the exception of WCNOC. 
WCNOC is currently pursuing their own contingency plan and their management
does not believe that WCNOC will be substantially impacted.  Our contingency
plan includes pre-established action plans to work around any unforeseen
operational impacts surrounding the century date change.
<PAGE 19>
    We have identified four major areas of risk: 1) Vendors and suppliers, 2)
Banks and Financial Institutions, 3) Telecommunications, including phone
systems and cellular phones and 4) Large customers.  We are addressing these
risks in our contingency plan and expect no significant operational impact on
our ability to serve our customers, pay suppliers, or operate other areas of
our business. 

    We plan to have our Year 2000 readiness efforts substantially completed
by the end of 1998, excluding WCNOC.  WCNOC is pursuing their own Year 2000
plan.  Western Resources currently estimates that total costs to update all of
its and our systems for year 2000 compliance will be approximately $12 
million.  As of June 30, 1998 Western Resources has expensed approximately $3
million of these costs and based on what they now know, they expect to incur
an additional $9 million in 1998 to complete our efforts.  Western Resources
has allocated a portion of these costs to our company.


Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 

    Not applicable.

<PAGE 20>            KANSAS GAS AND ELECTRIC COMPANY
                   Part II Other Information


Item 3.  Defaults Upon Senior Securities

         None

Item 4.  Submission of Matters to a Vote of Security Holders

         Information required by Item 4 is omitted pursuant to General 
         Instruction H(2)(b) to Form 10-Q.

Item 5.  Other Information

         None

Item 6.  Exhibits and Reports on Form 8-K

   (a)   Exhibits:

         Exhibit 12 - Computation of Ratio of Earnings to Fixed Charges
                      for 12 Months Ended June 30, 1998 (filed
                      electronically)

         Exhibit 27 - Financial Data Schedule (filed electronically)

   (b)   Reports on Form 8-K:

         None


<PAGE 21>
                            SIGNATURE

    Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

                                         KANSAS GAS AND ELECTRIC COMPANY  


Date    August 12, 1998                 By     /s/ Richard D. Terrill     
                                                 Richard D. Terrill
                                              Secretary, Treasurer and
                                                   General Counsel