Kansas Corporation Commission

News Release

July 25, 2001

KCC reduces Western Resources electric rates by $22.7 million

KGE costs reduced $41.2 million - KPL costs increased $18.5 million

TOPEKA, Kansas - The Kansas Corporation Commission (Commission) today issued an
order reducing Western Resources' combined electric rates by $22.7 million. The
$22.7 million rate reduction represents an overall revenue reduction of
approximately 1.9 percent. Today's action will reduce KGE's revenue requirement
by $41.2 million or approximately 6.6 percent, and increase KPL's revenue
requirement by $18.5 million or approximately 3.3 percent. In a separate rate
design proceeding the Commission will determine the actual rate impact to
customers.

"This decision was reached after much deliberation and study by the
Commissioners and is based on the voluminous evidence presented by all parties
throughout the rate case investigation," said KCC Chairman John Wine. "We are
confident that it is a fair and balanced decision for consumers and the
company."

The rates set in this case are interim and subject to refund, until it is
determined what will occur with the electric utility companies and there is a
clear assurance that there will not be an electric utility in financial
distress. The Commission said it will not assume in this proceeding what will
happen with Western Resources' corporate structure and what the financial
condition of the electric utility will be in the future. The Commission based
its rate ruling on the utility structure as it exists today.

In its order, the Commission reiterated its commitment to continue to work
toward the elimination of the rate differential between KPL and KGE. The
Commission said the rate differential between KPL and KGE must be viewed in
light of the historical record dating back to the 1991 merger of the two
companies. Over the course of time, customers of both companies have benefitted
from the merger through rate reductions. Adjustments in this case, based on the
individual company's costs to provide service, make significant progress in
addressing the rate differential.

The rate increase granted KPL in this case is attributable to the addition of
514 megawatts of new generation capacity necessary to provide electric service
to KPL retail customers. The new generation capacity consists of three
combustion turbine peaking units at the Gordon Evans facility and a purchase
power agreement for capacity from the State Line facility. The



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rate reduction to KGE is based upon several adjustments unique to the KGE
service area, most notably, extension of the operating life of the Wolf Creek
Generating Station. The extension provides a longer period for the recovery of
Wolf Creek costs and consequently reduces rates.

Customers will not see the effect of the rate changes until after the completion
of the rate design phase. Today's order requires Western Resources to file its
rate design for all customer classes by September 20, 2001.

The Commission allowed a Retum on Equity (ROE) of 11.02 percent and a Rate of
Return (ROR) of 9.08 percent. The ROE is the amount of money companies have the
opportunity to earn on its common equity provided by stockholders and the ROR is
the combined cost of debt and equity used to finance assets.

The Commission further ordered Western Resources to submit filings and take
corrective action in several areas including: within 90 days file revised
guidelines and procedures for allocating executives' time and expenses between
regulated and non-regulated operations, and within 30 days file procedures for
classifying and tracking power marketing activities and transactions.

Background

On November 27, 2000, Western Resources requested a $151 million rate increase.
Western Resources' KPL division and Kansas Gas and Electric Company filed
applications with the Kansas Corporation Commission requesting annual increases
in retail electric rates of $93 million or approximately 19 percent for KPL
customers and $58 million or approximately 10 percent for KGE customers. The
companies requested a ROE of 12.75 percent and an ROR of 10.27 percent.

In the companies' applications, Western Resources said the increase for both KPL
and KGE was necessary to recover increased operating and maintenance costs,
increases in the cost of fuel for its power plants, and to attract capital and
earn an adequate return on equity to protect their financial integrity. In
addition, the companies said the KPL increase was necessary to recover KPL's
investment in new generating facilities needed to meet growing customer demand
for electricity.

On April 6, 2001, Commission staff recommended a combined company rate decrease
of $91.7 million. This represented a rate decrease for KGE of approximately $92
million and a rate increase of $262,072 for KPL. Staff also recommended a ROE of
10.40 percent and a ROR of 8.6 percent.



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In April, public hearings were held in Topeka, Wichita, Salina and Pittsburgh
providing an opportunity for customers to present testimony on the rate case to
the Commission. A technical evidentiary hearing was held at the Commission's
Topeka offices from May 17, 2001 through June 4, 2001.

Western Resources, through KPL and KGE, provides retail electric service to
approximately 635,000 customers. KPL serves approximately 345,000 customers in
central and northeast Kansas and KGE serves approximately 290,000 customers in
central and southeast Kansas. KPL and KGE also provide wholesale electric
service and transmission service to numerous municipalities and electric
cooperatives in Kansas.

Release No. 01-13

Docket No. 01-WSRE-436-RTS