Form 10-Q
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


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

              For the quarterly period ended September 30, 2002

                                    or

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

                  For the transition period from _______ to _______

Commission       Registrant, State of Incorporation,         I.R.S. Employer
File Number         Address and Telephone Number          Identification Number

 0-33207         GREAT PLAINS ENERGY INCORPORATED               43-1916803
                    (A Missouri Corporation)
                       1201 Walnut Street
                  Kansas City, Missouri 64106
                         (816) 556-2200

  1-707          KANSAS CITY POWER & LIGHT COMPANY              44-0308720
                      (A Missouri Corporation)
                         1201 Walnut Street
                    Kansas City, Missouri 64106
                           (816) 556-2200


Each of the following classes or series of securities registered pursuant to
Section 12(b) of the Act is registered on the New York Stock Exchange:




Registrant                                  Title of each class

                                                                                           
Great Plains Energy Incorporated      Cumulative Preferred Stock par value $100 per share        3.80%
                                      Cumulative Preferred Stock par value $100 per share        4.50%
                                      Cumulative Preferred Stock par value $100 per share        4.35%
                                      Common Stock without par value


Securities registered pursuant to Section 12(g) of the Act:  None.


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities 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

The number of shares outstanding of the registrant's Common stock at November
12, 2002, was 62,296,170 shares.


                                       2



Great Plains Energy and KCP&L separately file this combined Quarterly Report on
Form 10-Q. Information contained herein relating to an individual registrant and
its subsidiaries is filed by such registrant on its own behalf. Each registrant
makes representations only as to information relating to itself and its
subsidiaries.

This report should be read in its entirety. No one section of the report deals
with all aspects of the subject matter.

                                GLOSSARY OF TERMS

The following is a glossary of frequently used abbreviations or acronyms that
are found throughout this report:

Abbreviation or
   Acronym               Definition

Clean Air Act            Clean Air Act Amendments of 1990
CO2                      Carbon Dioxide
Consolidated KCP&L       KCP&L and its subsidiary HSS
COLI                     Corporate Owned Life Insurance
DIP                      Debtor-in-Possession
DTI                      DTI Holdings, Inc. and its subsidiaries Digital
                           Teleport, Inc. and Digital Teleport of Virginia, Inc.
EIRR                     Environmental Improvement Revenue Refunding
EPA                      Environmental Protection Agency
EPS                      Earnings per share
ERISA                    Employee Retirement Income Security Act
FASB                     Financial Accounting Standards Board
FERC                     Federal Energy Regulatory Commission
GPP                      Great Plains Power Incorporated, a subsidiary of
                           Great Plains Energy
HSS                      Home Service Solutions Inc., a subsidiary of KCP&L
KCC                      The State Corporation Commission of the State of Kansas
KCP&L                    Kansas City Power & Light Company, a regulated,
                           integrated electric utility
                         subsidiary of Great Plains Energy
MACT                     Maximum Achievable Control Technology
MISO                     Midwest Independent System Operator
MPSC                     Missouri Public Service Commission
NEIL                     Nuclear Electric Insurance Limited
NRC                      Nuclear Regulatory Commission
NOx                      Nitrogen Oxide
PCBs                     Polychlorinated biphenyls
RSAE                     R.S. Andrews Enterprises, Inc. a consumer services
                           company in which HSS owns a 72% equity interest
Receivables Company      Kansas City Power & Light Receivables Company
RTO                      Regional Transmission Organization
SPP                      Southwest Power Pool
SFAS                     Statement of Financial Accounting Standards
WCNOC                    Wolf Creek Nuclear Operating Corporation






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. 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 provided forward-looking information. These important factors
include:

o future economic conditions in the regional, national and international markets
o state, federal and foreign regulation
o weather conditions including weather-related damage
o cost of fuel
o financial market conditions including, but not limited to, changes in interest
  rates
o inflation rates
o increased competition including, but not limited to, the deregulation of the
  electric utility industry and the entry of new competitors
o ability to carry out marketing and sales plans
o ability to achieve generation planning goals and the occurrence of unplanned
  generation outages
o nuclear operations
o ability to enter new markets successfully and capitalize on growth
  opportunities in nonregulated businesses
o adverse changes in applicable laws, regulations or rules governing
  environmental regulations including air quality, tax or accounting matters
o delays in the anticipated in-service dates of additional generating capacity
o performance of projects undertaken by our non-regulated businesses and the
  success of efforts to invest in and develop new opportunities
o non-performance of counterparties
o impact of terrorist acts
o availability and cost of capital and
o other risks and uncertainties.

This list of factors is not all-inclusive because it is not possible to predict
all possible factors.


                                       3



PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements


                               GREAT PLAINS ENERGY
                           Consolidated Balance Sheets
                                   (Unaudited)

                                                     September 30    December 31
                                                          2002            2001
                                                              (thousands)
ASSETS
Current Assets
   Cash and cash equivalents                            $ 24,866        $ 29,034
   Receivables                                           234,004         152,114
   Fuel inventories, at average cost                      19,534          22,246
   Materials and supplies, at average cost                51,449          50,696
   Current income taxes                                        -          31,031
   Deferred income taxes                                   2,021           5,061
   Other                                                  13,020          19,167
      Total                                              344,894         309,349
Nonutility Property and Investments
   Affordable housing limited partnerships                69,613          81,136
   Gas property and investments                           47,636          43,385
   Nuclear decommissioning trust fund                     60,628          61,766
   Other                                                  66,124          63,616
      Total                                              244,001         249,903
Utility Plant, at Original Cost
   Electric                                            4,407,461       4,332,464
   Less-accumulated depreciation                       1,859,725       1,793,786
      Net utility plant in service                     2,547,736       2,538,678
   Construction work in progress                          38,578          51,265
   Nuclear fuel, net of amortization of
      $118,343 and $127,101                               25,076          33,771
      Total                                            2,611,390       2,623,714
Deferred Charges
   Regulatory assets                                     139,725         124,406
   Prepaid pension costs                                  86,543          88,337
   Goodwill                                               34,066          37,066
   Other deferred charges                                 38,466          30,724
      Total                                              298,800         280,533
      Total                                          $ 3,499,085     $ 3,463,499

LIABILITIES AND CAPITALIZATION
Current Liabilities
   Notes payable                                       $ 165,561       $ 144,404
   Commercial paper                                       29,580          62,000
   Current maturities of long-term debt                   29,393         238,767
   EIRR bonds classified as current                       31,000         177,500
   Accounts payable                                      170,936         173,956
   Accrued taxes                                          41,122          14,324
   Accrued interest                                       13,877          13,262
   Accrued payroll and vacations                          28,856          26,422
   Accrued refueling outage costs                          5,183          12,979
   Other                                                  29,371          35,810
      Total                                              544,879         899,424
Deferred Credits and Other Liabilities
   Deferred income taxes                                 609,086         594,704
   Deferred investment tax credits                        42,611          45,748
   Accrued nuclear decommissioning costs                  61,921          63,040
   Other                                                 118,588         114,085
      Total                                              832,206         817,577
Capitalization (see statements)                        2,122,000       1,746,498
Commitments and Contingencies (Note 7)
      Total                                          $ 3,499,085     $ 3,463,499

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


                                                      4






                                           GREAT PLAINS ENERGY
                                Consolidated Statements of Capitalization
                                               (Unaudited)

                                                                      September 30      December 31
                                                                          2002             2001
                                                                               (thousands)
                                                                                 
Long-term Debt (excluding current maturities)
   General Mortgage Bonds
      Medium-Term Notes due 2004-08,
         7.37%* and 7.28%** weighted-average rate                     $   159,000      $   179,000
      3.07%* and 2.71%** EIRR bonds due 2012-23                           158,768          158,768
      EIRR bonds classified as current liabilities                        (31,000)         (31,000)
   Senior Notes
      7.125% due 2005                                                     250,000          250,000
      6.500% due 2011                                                     150,000          150,000
      6.000% due 2007                                                     225,000                -
      Unamortized discount                                                   (971)            (660)
   EIRR bonds
      2.81%* and 3.25%** Series A & B due 2015                            109,157          106,500
      2.81%* and 3.25%** Series D due 2017                                 41,037           40,000
      EIRR bonds classified as current liabilities                              -         (146,500)
      4.50%*** Series C due 2017                                           50,000           50,000
   Subsidiary Obligations
      R.S. Andrews Enterprises, Inc. long-term debt
         8.02%* and 8.14%** weighted-average rate due 2003-07               2,866            2,832
      Affordable Housing Notes
         7.83%* and 8.16%** weighted-average rate due 2003-08              11,197           19,746
         Total                                                          1,125,054          778,686
Company-obligated Mandatorily Redeemable Preferred Securities
   of a trust holding solely KCP&L Subordinated Debentures                150,000          150,000
Cumulative Preferred Stock
   $100 Par Value
      3.80% - 100,000 shares issued                                        10,000           10,000
      4.50% - 100,000 shares issued                                        10,000           10,000
      4.20% - 70,000 shares issued                                          7,000            7,000
      4.35% - 120,000 shares issued                                        12,000           12,000
         Total                                                             39,000           39,000
Common Stock Equity
   Common stock-150,000,000 shares authorized without par value
      61,908,726 shares issued, stated value                              449,697          449,697
   Capital stock premium and expense                                       (1,632)          (1,656)
   Retained earnings (see statements)                                     365,427          344,815
   Treasury stock                                                              (4)            (903)
   Accumulated other comprehensive loss
      Loss on derivative hedging instruments                               (4,511)         (12,110)
      Minimum pension liability                                            (1,031)          (1,031)
         Total                                                            807,946          778,812
         Total                                                        $ 2,122,000      $ 1,746,498



*   Weighted-average rate as of September 30, 2002
**  Weighted-average rate as of December 31, 2001
*** Weighted-average rate as of September 30, 2002 and December 31, 2001

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


                                                      5






                                                GREAT PLAINS ENERGY
                                         Consolidated Statements of Income
                                                    (Unaudited)

                                                             Three Months Ended               Year to Date
                                                                September 30                   September 30
                                                             2002           2001          2002            2001
                                                                               (thousands)
                                                                                           
Operating Revenues
   Electric revenues - KCP&L                              $ 334,516      $ 323,233     $  780,654      $  759,619
   Electric revenues - Strategic Energy                     232,839        136,902        579,826         267,485
   Other revenues                                            17,632         20,780         48,677          80,571
      Total                                                 584,987        480,915      1,409,157       1,107,675
Operating Expenses
   Fuel                                                      48,732         52,533        118,089         124,836
   Purchased power - KCP&L                                   15,618         21,016         38,850          59,061
   Purchased power - Strategic Energy                       205,455        109,359        506,328         218,532
   Gas purchased and production expenses                        966            339          2,555          17,454
   Other                                                     90,417         78,304        249,035         243,163
   Maintenance                                               19,914         18,835         75,622          60,588
   Depreciation and depletion                                37,670         40,424        112,402         117,046
   General taxes                                             29,768         28,839         76,169          74,253
      Total                                                 448,540        349,649      1,179,050         914,933
   (Gain) Loss on property                                      610           (463)           543         (22,169)
      Total                                                 449,150        349,186      1,179,593         892,764
Operating income                                            135,837        131,729        229,564         214,911
Loss from equity investments                                   (248)          (389)          (880)           (501)
Minority interest in subsidiaries                            (2,890)        (3,133)        (8,245)         (1,954)
Non-operating income                                          1,417          3,453          4,997          10,912
Non-operating expenses                                       (5,077)       (21,152)       (17,752)        (30,321)
Interest charges                                             22,867         28,645         67,205          78,481
Income before income taxes, extraordinary
   item and cumulative effect of a change in
   accounting principle                                     106,172         81,863        140,479         114,566
Income taxes                                                 37,334         26,331         38,571          25,774
Income before extraordinary item and cumulative
   effect of a change in accounting principle                68,838         55,532        101,908          88,792
Early extinguishment of debt, net of income taxes                 -              -              -          15,872
Cumulative effect to January 1, 2002, of
   a change in accounting principle                               -              -         (3,000)              -
Net income                                                   68,838         55,532         98,908         104,664
Preferred stock dividend requirements                           411            412          1,234           1,236
Earnings available for common stock                       $  68,427      $  55,120     $   97,674      $  103,428
Average number of common shares outstanding                  61,909         61,870         61,901          61,860
Basic and diluted earnings per common share before
   extraordinary item and cumulative effect of
   a change in accounting principle                       $    1.11      $    0.89     $     1.63      $     1.41
Early extinguishment of debt                                      -              -              -            0.26
Cumulative effect to January 1, 2002, of a change
   in accounting principle                                        -              -          (0.05)              -
Basic and diluted earnings per common share               $    1.11      $    0.89     $     1.58      $     1.67

Cash dividends per common share                           $   0.415      $   0.415     $    1.245      $    1.245


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


                                                      6




                               GREAT PLAINS ENERGY
                      Consolidated Statements of Cash Flows
                                   (Unaudited)


Year to Date September 30                                   2002         2001
                                                               (thousands)
Cash Flows from Operating Activities
Net income                                                $ 98,908    $ 104,664
Adjustments to reconcile income to net cash
  from operating activities:
    Early extinguishment of debt, net of income taxes            -      (15,872)
    Cumulative effect of a change in accounting principle    3,000            -
    Depreciation and depletion                             112,402      117,046
    Amortization of:
      Nuclear fuel                                           9,501       12,757
      Other                                                  8,167       12,892
    Deferred income taxes (net)                             12,507        3,634
    Investment tax credit amortization                      (3,137)      (3,217)
    Loss from equity investments                               880          501
    (Gain) Loss on property                                    543      (22,169)
    Allowance for equity funds used during construction        (30)      (3,551)
    Deferred storm costs                                   (20,124)           -
    Minority Interest                                        8,245        1,954
    Other operating activities (Note 3)                     (9,842)     (70,027)
    Net cash from operating activities                     221,020      138,612
Cash Flows from Investing Activities
Utility capital expenditures                               (98,767)    (154,743)
Allowance for borrowed funds used during construction         (659)      (8,404)
Purchases of investments                                    (6,276)     (40,693)
Purchases of nonutility property                            (8,567)     (49,202)
Proceeds from sale of assets                                 3,121       64,072
Hawthorn No. 5 partial insurance recovery                        -       30,000
Loan to DTI prior to majority ownership                          -      (94,000)
Other investing activities                                  (5,067)       8,382
    Net cash from investing activities                    (116,215)    (244,588)
Cash Flows from Financing Activities
Issuance of long-term debt                                 224,573       99,500
Repayment of long-term debt                               (237,923)     (63,366)
Net change in short-term borrowings                        (11,263)     144,731
Dividends paid                                             (78,296)     (78,246)
Other financing activities                                  (6,064)      (3,583)
    Net cash from financing activities                    (108,973)      99,036
Net Change in Cash and Cash Equivalents                     (4,168)      (6,940)
Cash and Cash Equivalents at Beginning of Year              29,034       34,877
Cash and Cash Equivalents at End of Period                $ 24,866    $  27,937

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


                                                      7





                                              GREAT PLAINS ENERGY
                                Consolidated Statements of Comprehensive Income
                                                  (Unaudited)



                                                               Three Months Ended           Year to Date
                                                                 September 30               September 30
                                                              2002         2001          2002          2001
                                                                               (thousands)
                                                                                         
Net income                                                 $ 68,838      $ 55,532      $ 98,908      $104,664

Other comprehensive income:
  Gain (loss) on derivative hedging instruments               2,088        (5,537)        7,888       (39,705)
  Income taxes                                                 (507)        2,287        (2,885)       16,494
    Net gain (loss) on derivative hedging instruments         1,581        (3,250)        5,003       (23,211)

  Reclassification to revenues and expenses, net of tax        (211)          653         2,596        (7,687)

  Comprehensive income before cumulative
    effect of a change in accounting principles,
    net of income taxes                                      70,208        52,935       106,507        73,766
  Cumulative effect to January 1, 2001, of a change
    in accounting principles, net of income taxes                 -             -             -        17,443

Comprehensive income                                       $ 70,208      $ 52,935      $106,507      $ 91,209



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


                                              GREAT PLAINS ENERGY
                                 Consolidated Statements of Retained Earnings
                                                  (Unaudited)




                                                               Three Months Ended           Year to Date
                                                                 September 30               September 30
                                                              2002         2001          2002          2001
                                                                               (thousands)
                                                                                         
Beginning balance (Note 9)                                 $322,693      $470,289      $344,815      $473,321
Net income                                                   68,838        55,532        98,908       104,664
                                                            391,531       525,821       443,723       577,985
Dividends declared
  Preferred stock - at required rates                           411           411         1,234         1,235
  Common stock                                               25,693        25,671        77,062        77,011

Ending balance                                             $365,427      $499,739      $365,427      $499,739


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


                                                      8



                        KANSAS CITY POWER & LIGHT COMPANY
                           Consolidated Balance Sheets
                                   (Unaudited)

                                                     September 30    December 31
                                                        2002             2001
                                                               (thousands)
ASSETS
Current Assets
   Cash and cash equivalents                       $     2,013      $       962
   Receivables                                          92,625           62,511
   Fuel inventories, at average cost                    19,534           22,246
   Materials and supplies, at average cost              51,449           50,696
   Deferred income taxes                                 2,021            5,061
   Other                                                 9,114           11,484
      Total                                            176,756          152,960
Nonutility Property and Investments
   Nuclear decommissioning trust fund                   60,628           61,766
   Other                                                43,116           40,797
      Total                                            103,744          102,563
Utility Plant, at Original Cost
   Electric                                          4,407,461        4,332,464
   Less-accumulated depreciation                     1,859,725        1,793,786
      Net utility plant in service                   2,547,736        2,538,678
   Construction work in progress                        38,578           51,265
   Nuclear fuel, net of amortization of
      $118,343 and $127,101                             25,076           33,771
      Total                                          2,611,390        2,623,714
Deferred Charges
   Regulatory assets                                   139,725          124,406
   Prepaid pension costs                                86,543           88,337
   Goodwill                                             19,952           22,952
   Other deferred charges                               32,479           30,724
      Total                                            278,699          266,419
      Total                                        $ 3,170,589      $ 3,145,656

LIABILITIES AND CAPITALIZATION
Current Liabilities
   Notes payable                                   $    23,561      $    20,404
   Commercial paper                                     29,580           62,000
   Current maturities of long-term debt                 20,257          227,383
   EIRR bonds classified as current                     31,000          177,500
   Accounts payable                                     68,584          113,029
   Accrued taxes                                        78,693           15,895
   Accrued interest                                     12,928           11,327
   Accrued payroll and vacations                        26,264           22,581
   Accrued refueling outage costs                        5,183           12,979
   Other                                                12,793           14,562
      Total                                            308,843          677,660
Deferred Credits and Other Liabilities
   Deferred income taxes                               644,140          630,699
   Deferred investment tax credits                      42,611           45,748
   Accrued nuclear decommissioning costs                61,921           63,040
   Other                                                82,834           75,186
      Total                                            831,506          814,673
Capitalization (see statements)                      2,030,240        1,653,323
Commitments and Contingencies (Note 7)
      Total                                        $ 3,170,589      $ 3,145,656

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


                                                      9





                                 KANSAS CITY POWER & LIGHT COMPANY
                             Consolidated Statements of Capitalization
                                            (Unaudited)


                                                                   September 30       December 31
                                                                       2002              2001
                                                                            (thousands)
                                                                               
Long-term Debt (excluding current maturities)
  General Mortgage Bonds
    Medium-Term Notes due 2004-08,
      7.37%* and 7.28%** weighted-average rate                     $   159,000       $   179,000
    3.07%* and 2.71%** EIRR bonds due 2012-23                          158,768           158,768
    EIRR bonds classified as current liabilities                       (31,000)          (31,000)
  Senior Notes
    7.125% due 2005                                                    250,000           250,000
    6.500% due 2011                                                    150,000           150,000
    6.000% due 2007                                                    225,000                 -
    Unamortized discount                                                  (971)             (660)
  EIRR bonds
    2.81%* and 3.25%** Series A & B due 2015                           109,157           106,500
    2.81%* and 3.25%** Series D due 2017                                41,037            40,000
    EIRR bonds classified as current liabilities                             -          (146,500)
    4.50%*** Series C due 2017                                          50,000            50,000
  Subsidiary Obligations
    R.S. Andrews Enterprises, Inc. long-term debt
      8.02%* and 8.14%** weighted-average rate due 2003-07               2,866             2,832
      Total                                                          1,113,857           758,940
Company-obligated Mandatorily Redeemable Preferred Securities
  of a trust holding solely KCP&L Subordinated Debentures              150,000           150,000
Common Stock Equity
  Common stock-1,000 shares authorized without par value
                   1 share issued, stated value                        562,041           526,041
  Retained earnings (see statements)                                   205,373           219,524
  Accumulated other comprehensive income (loss)
    Income (loss) on derivative hedging instruments                          -              (151)
    Minimum pension liability                                           (1,031)           (1,031)
      Total                                                            766,383           744,383
      Total                                                        $ 2,030,240       $ 1,653,323
*   Weighted-average rate as of September 30, 2002
**  Weighted-average rate as of December 31, 2001
*** Weighted-average rate as of September 30, 2002 and December 31, 2001



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


                                       10




                                            KANSAS CITY POWER & LIGHT COMPANY
                                            Consolidated Statements of Income
                                                       (Unaudited)

                                                      Three Months Ended                   Year to Date
                                                          September 30                     September 30
                                                      2002           2001             2002               2001
                                                                          (thousands)
                                                                                         
Operating Revenues
  Electric revenues                                $ 334,516      $ 460,135        $ 780,654         $ 1,027,104
  Other revenues                                      16,927         20,780           47,221              80,571
    Total                                            351,443        480,915          827,875           1,107,675
Operating Expenses
  Fuel                                                48,732         52,533          118,089             124,836
  Purchased power                                     15,618        130,375           38,850             277,593
  Gas purchased and production expenses                    -            339                -              17,454
  Other                                               75,891         78,304          211,236             243,163
  Maintenance                                         19,903         18,835           75,541              60,588
  Depreciation and depletion                          37,034         40,424          110,853             117,046
  General taxes                                       29,063         28,839           74,813              74,253
    Total                                            226,241        349,649          629,382             914,933
  (Gain) Loss on property                                609           (463)             304             (22,169)
    Total                                            226,850        349,186          629,686             892,764
Operating income                                     124,593        131,729          198,189             214,911
Loss from equity investments                               -           (389)               -                (501)
Minority interest in subsidiaries                          -         (3,133)               -              (1,954)
Non-operating income                                   1,084          3,453            3,834              10,912
Non-operating expenses                                (2,922)       (21,152)          (7,925)            (30,321)
Interest charges                                      20,587         28,645           61,542              78,481
Income before income taxes, extraordinary
  item and cumulative effect of a change in
  accounting principle                               102,168         81,863          132,556             114,566
Income taxes                                          39,817         26,331           51,155              25,774
Income before extraordinary item and cumulative
  effect of a change in accounting principle          62,351         55,532           81,401              88,792
Early extinguishment of debt, net of
  income taxes                                             -              -                -              15,872
Cumulative effect to January 1, 2002, of a
  change in accounting principle                           -              -           (3,000)                  -
Net income                                            62,351         55,532           78,401             104,664
Preferred stock dividend requirements                      -            412                -               1,236
Earnings available for common stock                $  62,351      $  55,120        $  78,401         $   103,428



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


                                                           11



                        KANSAS CITY POWER & LIGHT COMPANY
                      Consolidated Statements of Cash Flows
                                   (Unaudited)


Year to date September 30                                  2002          2001
                                                               (thousands)
Cash Flows from Operating Activities
Net income                                               $ 78,401      $104,664
Adjustments to reconcile income to net cash
  from operating activities:
    Early extinguishment of debt, net of income taxes           -       (15,872)
    Cumulative effect of a change in accounting principle   3,000             -
    Depreciation and depletion                            110,853       117,046
    Amortization of:
      Nuclear fuel                                          9,501        12,757
      Other                                                 5,980        12,892
    Deferred income taxes (net)                            16,385         3,634
    Investment tax credit amortization                     (3,137)       (3,217)
    Loss from equity investments                                -           501
    (Gain) Loss on property                                   304       (22,169)
    Allowance for equity funds used during construction       (30)       (3,551)
    Deferred storm costs                                  (20,124)            -
    Other operating activities (Note 3)                       366       (68,073)
    Net cash from operating activities                    201,499       138,612
Cash Flows from Investing Activities
Utility capital expenditures                              (99,667)     (154,743)
Allowance for borrowed funds used during construction        (659)       (8,404)
Purchases of investments                                   (2,566)      (40,693)
Purchases of nonutility property                           (1,148)      (49,202)
Proceeds from sale of assets                                    -        64,072
Hawthorn No. 5 partial insurance recovery                       -        30,000
Loan to DTI prior to majority ownership                         -       (94,000)
Other investing activities                                 (5,393)        8,382
    Net cash from investing activities                   (109,433)     (244,588)
Cash Flows from Financing Activities
Issuance of long-term debt                                224,573        99,500
Repayment of long-term debt                              (227,126)      (63,366)
Net change in short-term borrowings                       (29,263)      144,731
Dividends paid                                                  -       (78,246)
Dividends paid to Great Plains Energy                     (92,552)            -
Equity contribution from Great Plains Energy               36,000             -
Other financing activities                                 (2,647)       (3,583)
    Net cash from financing activities                    (91,015)       99,036
Net Change in Cash and Cash Equivalents                     1,051        (6,940)
Cash and Cash Equivalents at Beginning of Year                962        34,877
Cash and Cash Equivalents at End of Period               $  2,013      $ 27,937

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


                                       12






                                         KANSAS CITY POWER & LIGHT COMPANY
                                  Consolidated Statements of Comprehensive Income
                                                    (Unaudited)

                                                                Three Months Ended              Year to Date
                                                                   September 30                 September 30
                                                                2002          2001           2002         2001
                                                                                  (thousands)

                                                                                            
Net income                                                    $ 62,351      $ 55,532      $ 78,401      $104,664

Other comprehensive income:
  Gain (loss) on derivative hedging instruments                      -        (5,537)          422       (39,705)
  Income taxes                                                       -         2,287          (165)       16,494
    Net gain (loss) on derivative hedging instruments                -        (3,250)          257       (23,211)

  Reclassification to revenues and expenses, net of tax            (39)          653          (106)       (7,687)

  Comprehensive income before cumulative
    effect of a change in accounting principles,
    net of income taxes                                         62,312        52,935        78,552        73,766
  Cumulative effect to January 1, 2001, of a change
    in accounting principles, net of income taxes                    -             -             -        17,443

Comprehensive income                                          $ 62,312      $ 52,935      $ 78,552      $ 91,209



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




                                         KANSAS CITY POWER & LIGHT COMPANY
                                    Consolidated Statements of Retained Earnings
                                                    (Unaudited)

                                                                Three Months Ended              Year to Date
                                                                   September 30                 September 30
                                                                2002          2001           2002         2001
                                                                                  (thousands)

                                                                                            
Beginning balance (Note 9)                                    $199,897      $470,289      $219,524      $473,321
Net income                                                      62,351        55,532        78,401       104,664
                                                               262,248       525,821       297,925       577,985
Dividends declared
  Preferred stock - at required rates                                -           411             -         1,235
  Common stock                                                       -        25,671             -        77,011
  Common stock held by Great Plains Energy                      56,875             -        92,552             -

Ending balance                                                $205,373      $499,739      $205,373      $499,739



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


                                                        13



GREAT PLAINS ENERGY INCORPORATED
KANSAS CITY POWER & LIGHT COMPANY
Notes to Consolidated Financial Statements

In management's opinion, the consolidated interim financial statements reflect
all adjustments (which include only normal recurring adjustments) necessary to
present fairly the results of operations for the interim periods presented.
These statements and notes should be read in connection with the financial
statements and related notes included in our combined 2001 annual report on Form
10-K.

The notes to consolidated financial statements that follow are a combined
presentation for Great Plains Energy and consolidated KCP&L, both registrants
under this filing.

1. ORGANIZATION

Great Plains Energy (The Company)
Great Plains Energy's consolidated financial statements include consolidated
KCP&L, KLT Inc. and GPP. KLT Inc.'s major holdings consist of Strategic Energy,
KLT Gas, and investments in affordable housing limited partnerships. GPP's
assets and results of operations are insignificant to Great Plains Energy's
financial position and results of operations for all periods presented.

During the second quarter of 2002, the Company's management revised its
corporate business strategy. As a result of this revision, management has
decided to limit the operations of GPP until market conditions improve, or the
Company makes changes in its business strategy.

Effective October 1, 2001, KCP&L distributed, as a dividend, its 100% ownership
of KLT Inc. and GPP to Great Plains Energy. As a result, those companies are
subsidiaries of Great Plains Energy and are not included in consolidated KCP&L's
results of operations and financial position since that date. The presentation
of the prior year results of operations for Great Plains Energy is provided for
comparative purposes and is identical to the results of operations for
consolidated KCP&L, prior to formation of the holding company, presented for
that year. Intercompany balances and transactions have been eliminated in
consolidation.

Consolidated KCP&L
KCP&L's consolidated financial statements include its wholly owned subsidiary
HSS. HSS has two subsidiaries: Worry Free Service, Inc. and RSAE. In addition,
KCP&L's consolidated results of operations include KLT Inc. and GPP for all
periods prior to the October 1, 2001, formation of the holding company.


                                       14



Strategic Energy Revenues and Purchased Power Reclassified
Great Plains Energy retail electric revenues and purchased power have been
reduced by $5.8 million for the three months ended March 31, 2002 to reflect
Strategic Energy's policy of reflecting customer credits as a reduction of
electricity energy sales when such credits are determined to be payable. The
table below details the originally reported amounts and the reclassification.

                                                                Three Months
                                                                    Ended
                                                                   March 30
                                                                     2002
                                                                  (millions)
Operating revenues- Strategic Energy, as reported (a)              $ 152.2
Reclassification                                                      (5.8)
Operating revenues - Strategic Energy                              $ 146.4

Purchased power - Strategic Energy, as reported (a)                $ 130.8
Reclassification                                                      (5.8)
Purchased power - Strategic Energy                                 $ 125.0

(a) As reported in Form 10-Q for the period ended March 31, 2002 and on Form
    8-K dated April 24, 2002.

2. RESTRICTED CASH

Strategic Energy has entered into performance assurance agreements with selected
electricity power suppliers. As part of the agreements, Strategic Energy has
directed selected retail customers to remit payment to lockboxes that are held
in trust and managed by a Trustee, agreed upon by both the supplier and
Strategic Energy. As part of the trust administration, the Trustee remits
payment to the supplier for electricity purchased by Strategic Energy during the
month according to the supplier payment terms. Any excess remittances into the
lockboxes are remitted back to Strategic Energy after the disbursement to the
supplier has been made. The assets of the Trust are included in cash and cash
equivalents in the Great Plains Energy consolidated balance sheets and totaled
$13.8 million at September 30, 2002 and $2.2 million at December 31, 2001.


                                       15



3. SUPPLEMENTAL CASH FLOW INFORMATION

Great Plains Energy Other Operating Activities
                                                             Year to Date
                                                             September 30
                                                         2002           2001
Cash flows affected by changes in:                           (thousands)
   Receivables                                        $ (81,890)      $(101,179)
   Fuel inventories                                       3,116             752
   Materials and supplies                                  (753)         (2,425)
   Accounts payable                                      (3,020)        (61,674)
   Accrued taxes and current income taxes                57,829          60,157
   Accrued interest                                         615           2,873
   Wolf Creek refueling outage accrual                   (7,796)          8,636
   Pension and postretirement benefit obligations           883         (17,997)
Other                                                    21,174          40,830
      Total other operating activities                $  (9,842)       $(70,027)

Cash paid during the period:
Interest                                              $  65,003       $  61,984
Income taxes                                          $   7,318       $   7,822




Consolidated KCP&L Other Operating Activities
                                                             Year to Date
                                                             September 30
                                                         2002           2001
Cash flows affected by changes in:                           (thousands)
   Receivables                                        $ (30,114)      $(101,179)
   Fuel inventories                                       3,116             752
   Materials and supplies                                  (753)         (2,425)
   Accounts payable                                     (44,445)        (61,674)
   Accrued taxes                                         62,798          60,157
   Accrued interest                                       1,601           2,873
   Wolf Creek refueling outage accrual                   (7,796)          8,636
   Pension and postretirement benefit obligations           883         (17,997)
Other                                                    15,076          42,784
      Total other operating activities                $     366       $ (68,073)

Cash paid during the period:
Interest                                              $  58,354       $  61,984
Income taxes                                          $   1,800       $   7,822

During the first quarter of 2001, KLT Telecom, a wholly owned subsidiary of KLT
Inc., increased its equity ownership in DTI to a majority ownership and HSS
increased its equity ownership in RSAE to a majority ownership. The effect of
these transactions is summarized in the tables that follow. The initial
consolidation of DTI (February 8, 2001) and RSAE (January 1, 2001) are excluded
from both Great


                                       16



Plains Energy and KCP&L's consolidated statement of cash flows
year to date September 30, 2001. See Note 7 for discussion of DTI's bankruptcy.

                                                          DTI            RSAE
                                                               (thousands)
Cash paid to obtain majority ownership                 $ (39,855)      $   (560)
Subsidiary cash                                            4,557          1,053
   Purchase of DTI and RSAE, net of cash received      $ (35,298)      $    493
Initial consolidation of subsidiaries:
Assets
   Cash                                                $   4,557       $  1,053
   Receivables                                             1,012          4,078
   Other nonutility property and investments             363,825          6,267
   Goodwill                                               62,974         24,496
   Other assets                                            5,143          3,919
   Eliminate equity investment                           (67,660)        (7,200)
      Total assets                                     $ 369,851       $ 32,613
Liabilities
   Notes payable                                       $   5,300       $ 10,057
   Accounts payable                                       31,299          6,219
   Accrued taxes                                           2,414             24
   Deferred income taxes                                   7,437              -
   Other liabilities and deferred credits                 46,531         13,418
   Loan from KLT Telecom (a)                              94,000              -
   Long-term debt                                        182,870          2,895
      Total liabilities                                $ 369,851       $ 32,613
(a) KLT Telecom provided a $94 million loan to DTI for the completion of the
    tender offer of 50.4 percent of DTI's Senior Discount Notes prior to
    increasing its DTI investment to a majority ownership.

4. CAPITALIZATION

KCP&L Financing I (Trust) has previously issued $150.0 million of 8.3% preferred
securities. The sole asset of the Trust is the $154.6 million principal amount
of 8.3% Junior Subordinated Deferrable Interest Debentures, due 2037, issued by
KCP&L.

In March 2002, KCP&L issued $225 million of 6.0% unsecured senior notes,
maturing in 2007, through a private placement. The proceeds from the issuance
were primarily used to refinance maturing unsecured medium-term notes. KCP&L,
pursuant to its obligations under a registration rights agreement entered into
in connection with the private placement, filed an S-4 registration statement
offering to exchange up to $225 million of 6.0% unsecured senior notes, maturing
in 2007, registered under the Securities Act for the $225 million privately
placed notes which became effective during the third quarter of 2002. All of the
privately placed notes were exchanged.

During the first quarter of 2002, Great Plains Energy terminated its $129
million bridge revolving credit facility. Great Plains Energy replaced the
bridge facility with a $205 million syndicated 364-day, revolving credit
facility with a group of banks. During June 2002, Great Plains Energy entered
into a separate $20 million 364-day revolving credit facility with a bank. At
September 30, 2002, Great Plains Energy had $142 million of borrowings, at an
average interest rate of 2.72%, outstanding under the facilities.

                                       17



In the third quarter of 2002, KCP&L remarketed its 1998 Series A, B, and D EIRR
bonds totaling $146.5 million to a 5-year fixed interest rate of 4.75% ending
October 1, 2007. The final maturity for Series A and B bonds is 2015 and the
final maturity for Series D is 2017. At the end of the fixed interest rate
period, the bonds will be subject to mandatory redemption or purchase and KCP&L
anticipates remarketing the bonds at which time a new interest rate period and
mode will be determined. KCP&L has classified the EIRR bonds as long-term debt
consistent with the 5-year term of the remarketing. Under the previous, one-year
remarketing term, the EIRR bonds were classified as current liabilities.

Simultaneously with the remarketing, KCP&L entered into an interest rate swap
for the $146.5 million based on LIBOR to effectively create a floating interest
rate obligation. The transaction is a fair value hedge with the assumption of no
ineffectiveness under SFAS No. 133. The fair value of the swap is recorded on
KCP&L's balance sheet as an asset with an offset to the respective debt balances
and has no impact on earnings. Future changes in the fair market value of the
swap will be similarly recorded on the balance sheet with no impact on earnings.
At September 30, 2002, the fair value of the swap was $3.7 million.

In March 2002, Great Plains Energy made a $36 million capital contribution to
KCP&L increasing capital stock premium and expense to $75 million, which is
reflected in Common Stock in the KCP&L consolidated statement of capitalization.

Great Plains Energy filed an S-3 registration statement, for the issuance of an
aggregate amount up to $300 million of any combination of senior debt
securities, subordinated debt securities, trust preferred securities,
convertible securities, or common stock. The registration statement became
effective in November 2002. Great Plains Energy expects to issue additional
common equity. However, the timing and amount of this transaction are dependent
on a number of factors, including overall and sector-specific equity market
conditions.

5. SEGMENT AND RELATED INFORMATION

Great Plains Energy
Great Plains Energy has three reportable segments based on its method of
internal reporting, which generally segregates the reportable segments based on
products and services, management responsibility and regulation. During the
second quarter of 2002, the Company's management revised its corporate business
strategy focusing on the following three primary business segments: (1) KCP&L,
an integrated electric utility, generates, transmits and distributes
electricity; (2) Strategic Energy earns a management fee on the direct delivery
to retail customers under long-term contracts of wholesale power purchased under
long-term contracts, operating in several deregulated electricity markets; and
(3) KLT Gas acquires and develops early stage coalbed methane properties.
"Other" includes the operations of HSS and GPP, all KLT Inc. operations other
than Strategic Energy and KLT Gas, unallocated corporate charges and
intercompany eliminations. The summary of significant accounting policies
applies to all of the reportable segments. Segment performance is evaluated
based on net income.


                                       18




The tables below reflect summarized financial information concerning Great
Plains Energy's reportable segments. Prior year information has been restated to
conform to the current presentation.




For the three months ended                               Strategic                               Great Plains
September 30, 2002                           KCP&L        Energy         KLT Gas       Other        Energy
                                                                       (millions)
                                                                                    
Operating revenues                          $ 334.6       $ 233.1        $  0.5       $ 16.8       $  585.0
Depreciation and depletion                    (36.2)         (0.2)         (0.3)        (1.0)         (37.7)
Interest charges                              (20.2)         (0.1)         (0.1)        (2.5)         (22.9)
Loss from equity investments                      -             -             -         (0.3)          (0.3)
Income taxes                                  (40.1)         (7.2)          2.6          7.3          (37.4)
Net income (loss)                              63.7           6.7           0.3         (1.9)          68.8






For the three months ended                               Strategic                               Great Plains
September 30, 2001                           KCP&L        Energy         KLT Gas       Other        Energy
                                                                       (millions)
                                                                                    
Operating revenues                          $ 323.2       $ 137.0        $ (0.5)      $ 21.2       $  480.9
Depreciation and depletion                    (34.4)         (0.1)         (0.4)        (5.5)         (40.4)
Interest charges                              (21.6)            -             -         (7.1)         (28.7)
Loss from equity investments                      -             -             -         (0.4)          (0.4)
Income taxes                                  (37.0)         (7.1)          2.7         15.1          (26.3)
Net income (loss)                              59.7          10.0           0.3        (14.4)          55.6





                                                         Strategic                               Great Plains
Year to date September 30, 2002              KCP&L         Energy        KLT Gas       Other        Energy
                                                                       (millions)
                                                                                    
Operating revenues                          $ 780.7       $ 580.7        $  0.6       $ 47.2       $1,409.2
Depreciation and depletion                   (108.1)         (0.6)         (0.7)        (3.0)        (112.4)
Interest charges                              (60.3)         (0.3)         (0.1)        (6.5)         (67.2)
Loss from equity investments                      -             -             -         (0.9)          (0.9)
Income taxes                                  (51.4)        (17.8)          7.4         23.2          (38.6)
Cumulative effect of a change
   in accounting principle                        -             -             -         (3.0)          (3.0)
Net income (loss)                              84.1          21.8          (0.1)        (6.9)          98.9






                                                         Strategic                               Great Plains
Year to date September 30, 2001              KCP&L        Energy         KLT Gas       Other        Energy
                                                                       (millions)
                                                                                    
Operating revenues                          $ 759.6       $ 283.0        $  1.4       $ 63.6       $1,107.6
Depreciation and depletion                   (100.9)         (0.2)         (1.4)       (14.5)        (117.0)
Interest charges                              (59.3)         (0.1)            -        (19.1)         (78.5)
Income (loss) from equity investments             -             -           1.0         (1.5)          (0.5)
Income taxes                                  (47.1)        (12.2)         (0.8)        34.3          (25.8)
Early extinguishment of debt                      -             -             -         15.9           15.9
Net income (loss)                              81.0          17.3          13.6         (7.2)         104.7




                                       19





                                                           Strategic       KLT                  Great Plains
                                               KCP&L        Energy         Gas       Other         Energy
September 30, 2002                                                     (millions)
                                                                                  
Assets                                       $ 3,116.5      $ 191.1      $ 52.6     $ 138.9      $ 3,499.1
Capital and investment expenditures (a)          102.3          0.8         6.1         4.4          113.6
December 31, 2001
Assets(b)                                    $ 3,089.4      $ 129.1      $ 57.6     $ 187.4      $ 3,463.5
Capital and investment expenditures (a)          265.8          1.5        25.0        82.0          374.3



(a) Capital and investment expenditures reflect year to date amounts for the
    periods presented.
(b) KCP&L assets do not match the KCP&L assets in the consolidated KCP&L segment
    table due to the reclassification of accrued taxes to current income taxes
    during consolidation with Great Plains Energy.

Consolidated KCP&L
On October 1, 2001, consolidated KCP&L distributed, as a dividend, its ownership
interest in KLT Inc. and GPP to Great Plains Energy. As a result, those
companies are direct subsidiaries of Great Plains Energy and have not been
included in consolidated KCP&L's results of operations and financial position
since October 1, 2001.

The table below reflects summarized financial information for the three months
ended and year to date September 30, 2002, concerning consolidated KCP&L's
reportable segment. For the three months ended and year to date September 30,
2001, consolidated KCP&L's segment information is identical to the Great Plains
Energy segment information presented above. Other includes the operations of HSS
and immaterial intercompany eliminations.

For the three months ended                                          Consolidated
September 30, 2002                         KCP&L         Other          KCP&L
                                                        (millions)
Operating revenues                       $  334.6       $  16.9       $  351.5
Depreciation and depletion                  (36.2)         (0.9)         (37.1)
Interest charges                            (20.2)         (0.3)         (20.5)
Income taxes                                (40.1)          0.2          (39.9)
Net income (loss)                            63.7          (1.4)          62.3

                                                                    Consolidated
Year to date September 30, 2002            KCP&L         Other          KCP&L
                                                        (millions)
Operating revenues                       $  780.7       $  47.2       $  827.9
Depreciation and depletion                 (108.1)         (2.8)        (110.9)
Interest charges                            (60.3)         (1.2)         (61.5)
Income taxes                                (51.4)          0.2          (51.2)
Cumulative effect of a change
   in accounting principle                      -          (3.0)          (3.0)
Net income (loss)                            84.1          (5.7)          78.4

                                                                    Consolidated
                                              KCP&L        Other         KCP&L
September 30, 2002                                        (millions)
Assets                                      $ 3,116.5      $ 54.1      $ 3,170.6
Capital and investment expenditures (a)         102.3         1.1          103.4
December 31, 2001
Assets                                      $ 3,092.5      $ 53.1      $ 3,145.6
Capital and investment expenditures (a)         265.8        87.0          352.8
(a) Capital and investment expenditures reflect year to date amounts for the
    periods presented.


                                       20



6. RELATED PARTY TRANSACTIONS AND RELATIONSHIPS

In January of 1997, KLT Energy Services, a wholly-owned subsidiary of KLT Inc.,
acquired approximately 71% of Custom Energy from Environmental Lighting
Concepts. In February of 1999, Custom Energy acquired 100% of the outstanding
ownership interest in Strategic Energy from SE Holdings, L.L.C. (SE Holdings) in
exchange for 25% of the ownership interest in Custom Energy. In a December 1999
reorganization, Custom Energy changed its name to Custom Energy Holdings and
transferred all of its operations to a new wholly owned subsidiary called Custom
Energy. After the reorganization, Custom Energy Holdings' assets consisted of
its ownership interests in Strategic Energy and Custom Energy. Through a series
of transactions, KLT Energy Services has increased its indirect ownership
position in Strategic Energy to approximately 83% as of December 31, 2001. In a
July 2002 transaction, Custom Energy was distributed to KLT Energy Services and
a third-party investor, resulting in Strategic Energy being the sole subsidiary
of Custom Energy Holdings. Environmental Lighting Concepts continued to own a
5.8% indirect ownership interest in Strategic Energy. Gregory Orman, Executive
Vice President of Corporate Development and Strategic Planning of Great Plains
Energy and President and CEO of KLT Inc., held a 67% interest in Environmental
Lighting Concepts. The other 33% interest in Environmental Lighting Concepts was
held by an employee of a Great Plains Energy subsidiary. Both persons were
officers and shareholders of Environmental Lighting Concepts before they became
officers or employees of the Company.

On November 5, 2002, the Board of Directors of the Company approved the merger
of Environmental Lighting Concepts into Innovative Energy Consultants, Inc., a
recently created wholly-owned subsidiary of the Company. The merger was
consummated on November 7, 2002, with Innovative Energy Consultants being the
surviving company after the merger. In exchange for their entire ownership
interest in Environmental Lighting Concepts, the two shareholders received $15.1
million in Great Plains Energy common stock and notes issued by Great Plains
Energy and Innovative Energy Consultants. Great Plains Energy issued 387,596
common shares of Great Plains Energy common stock, valued at $8 million, which
was distributed to the Environmental Lighting Concepts shareholders in
proportion to their interests in that company. Great Plains Energy also issued a
promissory note to Mr. Orman in the principal amount of approximately $4.7
million, and Innovative Energy Consultants issued a promissory note to the other
shareholder of Environmental Lighting Concepts in the principal amount of
approximately $2.4 million. Both notes mature on January 1, 2003, and bear
interest at 2.48% per annum.

As a result of the merger, Great Plains Energy now indirectly holds an
approximate 89% indirect ownership interest in Strategic Energy through KLT
Energy Services and Innovative Energy Consultants. Certain employees of
Strategic Energy and other investors indirectly hold, through SE Holdings, the
remaining ownership interest in Strategic Energy.

Custom Energy Holdings' business and affairs are controlled and managed by a
three member Management Committee composed of one representative designated by
KLT Energy Services, one representative designated by Innovative Energy
Consultants and one representative designated by SE Holdings. Certain actions
(including amendment of Custom Energy Holdings' operating agreement, approval of
actions in contravention of the operating agreement, approval of a dissolution
of Custom Energy Holdings, additional capital contributions and assumption of
recourse indebtedness) require the unanimous consent of all the members of
Custom Energy Holdings. Certain other actions (including mergers with Custom
Energy Holdings, acquisitions by Custom Energy Holdings, assumption of
non-recourse indebtedness, sales of substantial assets, approval of
distributions, filing of registration statements, partition of assets, admission
of new members and transfers of interests in Custom Energy Holdings) can be
approved by the Management Committee, but to the extent they affect the rights,


                                       21



obligations, assets or business of Strategic Energy, the approval of the
Strategic Energy Management Committee is also required.

Strategic Energy's business and affairs are controlled and managed exclusively
by a four member Management Committee composed of two representatives designated
by KLT Energy Services, one representative designated by Innovative Energy
Consultants and one representative designated by SE Holdings. Certain actions
(including amendment of Strategic Energy's operating agreement, approval of
actions in contravention of the operating agreement, approval of transactions
between Strategic Energy and affiliates of its members, approval of a
dissolution of Strategic Energy, and assumption of recourse indebtedness)
require the unanimous consent of all the Management Committee representatives of
Strategic Energy.

7. COMMITMENTS AND CONTINGENCIES

Nuclear Liability and Insurance

Liability Insurance
The Price-Anderson Act currently limits the combined public liability of nuclear
reactor owners to $9.5 billion for claims that could arise from a single nuclear
incident. The owners of Wolf Creek, a nuclear generating station, (the Owners)
carry the maximum available commercial insurance of $0.2 billion. Secondary
Financial Protection, an assessment plan mandated by the NRC, provides insurance
for the $9.3 billion balance.

Under Secondary Financial Protection, if there were a catastrophic nuclear
incident involving any of the nation's licensed reactors, the Owners would be
subject to a maximum retrospective assessment per incident of up to $88 million
($41 million, KCP&L's 47% share). The Owners are jointly and severally liable
for these charges, payable at a rate not to exceed $10 million ($5 million,
KCP&L's 47% share) per incident per year, excluding applicable premium taxes.
The assessment, most recently revised in 1998, is subject to an inflation
adjustment every five years based on the Consumer Price Index.

Property, Decontamination, Premature Decommissioning and Extra Expense Insurance
The Owners also carry $2.8 billion ($1.3 billion, KCP&L's 47% share) of property
damage, decontamination and premature decommissioning insurance for loss
resulting from damage to the Wolf Creek facilities. NEIL provides this
insurance.

In the event of an accident, insurance proceeds must first be used for reactor
stabilization and NRC mandated site decontamination. KCP&L's share of any
remaining proceeds can be used for further decontamination, property damage
restoration and premature decommissioning costs. Premature decommissioning
coverage applies only if an accident at Wolf Creek exceeds $500 million in
property damage and decontamination expenses, and only after trust funds have
been exhausted.

The Owners also carry additional insurance from NEIL to cover costs of
replacement power and other extra expenses incurred in the event of a prolonged
outage resulting from accidental property damage at Wolf Creek.

Under all NEIL policies, KCP&L is subject to retrospective assessments if NEIL
losses, for each policy year, exceed the accumulated funds available to the
insurer under that policy. The estimated maximum amount of retrospective
assessments to KCP&L under the current policies could total about $10.7 million.

In the event of a catastrophic loss at Wolf Creek, the insurance coverage may
not be adequate to cover property damage and extra expenses incurred. Uninsured
losses, to the extent not recovered through


                                       22



rates, would be assumed by KCP&L and could have a material, adverse effect on
its financial condition, results of operations and cash flows.

Low-Level Waste
The Low-Level Radioactive Waste Policy Amendments Act of 1985 mandated that the
various states, individually or through interstate compacts, develop alternative
low-level radioactive waste disposal facilities. The states of Kansas, Nebraska,
Arkansas, Louisiana and Oklahoma formed the Central Interstate Low-Level
Radioactive Waste Compact and selected a site in northern Nebraska to locate a
disposal facility. WCNOC and the owners of the other five nuclear units in the
compact provided most of the pre-construction financing for this project.
KCP&L's net investment in the Central Interstate Low-Level Radioactive Waste
Compact was $7.4 million at September 30, 2002 and December 31, 2001.

Significant opposition to the project has been raised by Nebraska officials and
residents in the area of the proposed facility and attempts have been made
through litigation and proposed legislation in Nebraska to slow down or stop
development of the facility. On December 18, 1998, the application for a license
to construct this project was denied. After the license denial, WCNOC and others
filed a lawsuit in federal court contending Nebraska officials acted in bad
faith while handling the license application. In September 2002, the U.S.
District Court Judge presiding over the Central Interstate Compact Commission's
federal "bad faith" lawsuit against the State of Nebraska issued his decision in
the case finding clear evidence that the State of Nebraska acted in bad faith in
processing the license application for a low-level radioactive waste disposal
site in Nebraska. He rendered a judgment in the amount of $151.4 million against
the state. The state has appealed this decision. Based on the favorable outcome
of this trial, in KCP&L's opinion, there is a greater possibility of reversing
the state's license denial once the decision in this case is final.

In May 1999, the Nebraska legislature passed a bill withdrawing Nebraska from
the Compact. In August 1999, the Nebraska Governor gave official notice of the
withdrawal to the other member states. Withdrawal will not be effective for five
years and will not, of itself, nullify the site license proceeding.

Environmental Matters
KCP&L's operations are subject to regulation by federal, state and local
authorities with regard to air and other environmental matters. The generation
and transmission 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 KCP&L.

KCP&L operates in an environmentally responsible manner and seeks to use current
technology to avoid and treat contamination. KCP&L regularly conducts
environmental audits designed to ensure compliance with governmental regulations
and to detect contamination. Governmental bodies, however, may impose additional
or more rigid environmental regulations that could require substantial changes
to operations or facilities at a significant cost. At September 30, 2002, and
December 31, 2001, KCP&L had $1.9 million accrued for environmental remediation
expenses covering water monitoring at one site and unasserted claims for
remediation at a second 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 out. Expenditures to comply with
environmental laws and regulations have not been material in amount during the
periods presented and are not expected to be material in the upcoming years with
the exception of the issues discussed below.

Certain Air Toxic Substances
In July 2000, the National Research Council published its findings of a study
under the Clean Air Act which stated that power plants that burn fossil fuels,
particularly coal, generate the greatest amount of


                                       23



mercury emissions. As a result, in December 2000, the EPA announced it would
propose Maximum Achievable Control Technology (MACT) requirements by December
2003 to reduce mercury emissions and issue final rules by December 2004. Until
the rules are proposed, KCP&L cannot predict the likelihood or compliance costs
of such regulations.

Air Particulate Matter
In July 1997, the EPA revised ozone and particulate matter air quality standards
creating a new eight-hour ozone standard and establishing a new standard for
particulate matter less than 2.5 microns (PM-2.5) in diameter. These standards
were challenged in the U. S. Court of Appeals for the District of Columbia
(Appeals Court) that decided against the EPA. Upon further appeal, the U. S.
Supreme Court reviewed the standards and remanded the case back to the Appeals
Court for further review, including a review of whether the standards were
arbitrary and capricious. On March 26, 2002, the Appeals Court issued its 3 to 0
decision on challenges to the 8-hour ozone and PM-2.5 national ambient air
quality standards (NAAQS). This ruling denies all state, industry and
environmental groups petitions for review and thus upheld as valid the EPA's new
8-hour ozone and PM-2.5 NAAQS. In so doing, the court held that the EPA acted
consistently with the Clean Air Act in setting the standards at the levels it
chose and the EPA's actions were reasonable and not arbitrary and capricious,
and cited the deference given the Agency's decision-making authority. The court
stated that the extensive records established for each rule supported the EPA's
actions in both rulemakings.

This ruling by the Appeals Court removed the last major hurdle to the EPA's
implementation of stricter ambient air quality standards for ozone and fine
particles. The EPA has not yet issued regulations incorporating the new
standards. Until new regulations are issued, KCP&L is unable to estimate the
impact of the new standards. However, the impact on KCP&L and all other
utilities that use fossil fuels could be substantial. In addition, the EPA is
conducting a three-year study of fine particulate ambient air levels. Until this
testing and review period has been completed, KCP&L cannot determine additional
compliance costs, if any, associated with the new particulate regulations.

Nitrogen Oxide
The EPA announced in 1998 regulations implementing reductions in NOx emissions.
These regulations initially called for 22 states, including Missouri, to submit
plans for controlling NOx emissions. The regulations require a significant
reduction in NOx emissions from 1990 levels at KCP&L's Missouri coal-fired
plants by the year 2003.

In December 1998, KCP&L and several other western Missouri utilities filed suit
against the EPA over the inclusion of western Missouri in the NOx reduction
program based on the 1-hour NOx standard. On March 3, 2000, a three-judge panel
of the District of Columbia Circuit of the U.S. Court of Appeals sent the NOx
rules related to Missouri back to the EPA, stating the EPA failed to prove that
fossil plants in the western part of Missouri significantly contribute to ozone
formation in downwind states. On March 5, 2001, the U.S. Supreme Court denied
certiorari, making the decision of the Court of Appeals final.

In the February 22, 2002, Federal Register, the EPA issued proposed Phase II NOx
SIP Call regulation which specifically excludes the fossil plants in the western
part of Missouri from the NOx SIP Call. To date, the EPA has not issued its
final Phase II NOx SIP Call regulation.

If required to be implemented, KCP&L would need to incur significant capital
costs, purchase power or purchase NOx emission allowances. Preliminary analysis
of the regulations indicates that selective catalytic reduction technology, as
well as other changes, may be required for some of the KCP&L units. Currently,
KCP&L estimates that additional capital expenditures to comply with these
regulations could range from $40 million to $60 million. Operations and
maintenance expenses could also increase by more than $2.5 million per year.
KCP&L continues to refine these preliminary estimates and explore


                                       24



alternatives. The ultimate cost of these regulations, if any, could be
significantly different from the amounts estimated above.

Carbon Dioxide
At a December 1997 meeting in Kyoto, Japan, delegates from 167 nations,
including the United States, agreed to a treaty (Kyoto Protocol) that would
require a seven percent reduction in United States carbon dioxide (CO2)
emissions below 1990 levels. Although the United States agreed to the Kyoto
Protocol, the treaty has not been sent to Congress for ratification. The
financial impact on KCP&L of future requirements in the reduction of CO2
emissions cannot be determined until specific regulations are adopted.

Proposed Water Use Regulations
In February 2002, the EPA issued proposed rules related to certain existing
power producing facilities that employ cooling water intake structures that
withdraw 50 million gallons or more per day and use 25% or more of that water
for cooling purposes. The proposed rules establish national minimum performance
requirements designed to minimize adverse environmental impact. The EPA must
take final action by August 2003. KCP&L will continue to monitor the progress of
this rulemaking. The impact of these proposed rules has not yet been quantified,
however, KCP&L's generating stations would be affected.

KCP&L Leases
In 2001, KCP&L entered into a synthetic lease arrangement with a Trust (Lessor)
to finance the purchase, installation, assembly and construction of five
combustion turbines and related property and equipment that will add 385
megawatts of peaking capacity (the "Project). The Trust is a special-purpose
entity and has an aggregate financing commitment from third-party equity and
debt participants (Investors) of $176 million, amended during the third quarter
2002 to adjust the amount financed from the previously estimated $200 million to
reflect a reduction in the estimated cost for the purchase, installation,
assembly and construction of the five combustion turbines. In accordance with
SFAS No. 13 "Accounting for Leases," and related EITF issues (including EITF
Issue No. 90-15, "Impact of Non-substantive Lessors, Residual Value Guarantees,
and Other Provisions in Leasing Transactions" and EITF Issue No. 97-10, "The
Effect of Lessee Involvement in Asset Construction"), the Project and related
lease obligations are not included in KCP&L's consolidated balance sheet. The
Lessor has appointed KCP&L as supervisory agent responsible for completing
construction of the Project by no later than June 2004. The initial lease term
is approximately three and one quarter years, beginning at the date of
construction completion, which is expected to be June 2003. At the end of the
lease term (October 2006), KCP&L may choose to sell the Project for the Lessor,
guaranteeing to the Lessor a residual value for the Project in an amount which
may be up to 83.21% of the project cost. If KCP&L does not elect the sale
option, KCP&L must either extend the lease, if it can obtain the consent of the
Lessor, or purchase the Project for the then outstanding project cost. KCP&L
also has contingent obligations to the Lessor upon an event of a default during
both the construction period and lease period. Upon a default in the
construction period, KCP&L's maximum obligation to the Lessor equals (i) in the
circumstances of bankruptcy, fraud, illegal acts, misapplication of funds and
willful misconduct, 100% of then-incurred project costs, and (ii) in all other
circumstances, an amount which may be up to 89.9% of then-incurred project costs
that are capitalizable in accordance with GAAP. At September 30, 2002,
cumulative project costs were approximately $107.2 million. Upon a default
during the lease period, KCP&L's maximum obligation to the Lessor equals 100% of
project costs. KCP&L's rental obligation, which reflects interest payments only,
is expected to be approximately $25.8 million in the aggregate.

During the second quarter of 2002, the FASB issued an exposure draft related to
identifying and accounting for special-purpose entities. The proposed
interpretation would require consolidation of special-purpose entities by a
business that has a controlling financial interest. The proposed


                                       25



interpretation explains how to determine if a business has a controlling
financial interest through a variable interest such as financial instruments,
service contracts, nonvoting ownership interest, or other arrangements. The
provisions of the proposed interpretation would apply immediately to
special-purpose entities created after the date of the final interpretation and
would apply to special-purpose entities already in existence as of the beginning
of the first fiscal year or interim period beginning after March 15, 2003. The
final interpretation is expected to be issued in the fourth quarter of 2002 and
would require KCP&L to apply the guidance on April 1, 2003. If the
interpretation is issued as currently proposed, the Company believes the
synthetic lease discussed above would be consolidated beginning April 1, 2003.

Strategic Energy Purchased Power Energy Commitments
Strategic Energy has entered into agreements to purchase electricity at various
fixed prices to meet estimated supply requirements. Commitments at September 30,
2002, under these agreements total $1,057.2 million through 2010. Commitments
for the remainder of 2002 total $123.1 million and for the years 2003 through
2006 total $390.5 million, $267.6 million, $205.7 million, and $50.1 million,
respectively. See Note 11 for further discussion.

Put Option Held by Minority Interests in Strategic Energy
As of November 7, 2002, Great Plains Energy indirectly owns approximately 89% of
Strategic Energy. SE Holdings has a put option to sell all or part of its
interest in Strategic Energy (approximately 11%) to Custom Energy Holdings at
any time within the 90 days following January 31, 2004, under certain
circumstances, at fair market value. Fair market value would be determined by
the mutual agreement of the parties, or if an agreement cannot be reached, by
third party appraisal.

DTI Holdings, Inc. and Subsidiaries
On December 31, 2001, DTI, a subsidiary of KLT Telecom, filed voluntary
petitions for bankruptcy. DTI's reorganization under Chapter 11 of the U.S.
Bankruptcy Code continues in process. Timing of completion of the bankruptcy
process has yet to be determined. During the first quarter of 2002, the
bankruptcy court approved $5 million in DIP financing to be provided by KLT
Telecom. As of September 30, 2002, none of the DIP financing has been borrowed
by DTI. As a result of DTI's filing for bankruptcy protection and KLT Telecom's
ensuing loss of control, KLT Telecom has not included the ongoing earnings or
loss incurred by DTI in its results for the three months ended and year to date
September 30, 2002.

Consistent with the fiduciary obligation of the creditors' committee to
investigate potential sources of recovery for the DTI bankruptcy estate, the
creditors' committee served a request for the production of documents by the
Company and its affiliates relating to the issue of whether DTI should have been
compensated for the use by the Company of its tax losses. The Company believes
that it would have meritorious defenses to any such claim that ultimately might
be asserted by the creditors' committee. Since the legal and factual basis for
any such unasserted claim have not yet been established, the Company is
currently unable to estimate the amount of liability or loss, if any, that might
arise if a claim is asserted.

The Company has performed an evaluation of the recoverability of deferred tax
assets relating to the write-off of its investment in DTI. In December 2001, the
Company established a $15.8 million income tax valuation allowance reflecting
the uncertainty of when the Company will recognize future tax deductions while
DTI is in the bankruptcy process. The Company is unable to project the outcome
of the bankruptcy proceedings. Since the uncertainty of recognizing future tax
deductions still exists, the Company has not adjusted the valuation allowance.


                                       26



Internal Revenue Service Settlement - Corporate-Owned Life Insurance
During 2000, KCP&L recorded a $12.7 million charge for the Federal and states
income tax impact of the proposed disallowance of interest deductions on COLI
loans and assessed interest on the disallowance for tax years 1994 to 1998. In
the fourth quarter of 2002, KCP&L will accept a settlement offer related to COLI
from the IRS. The offer allows 20% of the interest originally deducted and taxes
only 20% of the gain on surrender of the COLI policies. Acceptance of the offer
will require a cash payment to the IRS of approximately $11.2 million to satisfy
the liability, but will have an immaterial impact on earnings. KCP&L paid $1.5
million to the IRS in 2001 related to the disallowance of the COLI deduction.

8. GUARANTEES

As part of normal 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.

FASB issued an exposure draft of a proposed interpretation, Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others, during the second quarter of 2002. The
final interpretation is expected to be issued in the fourth quarter of 2002 and
take effect beginning January 1, 2003. For guarantees issued after December 31,
2002, the interpretation would require the Company to record a liability for the
fair value of the obligation it has undertaken in issuing the guarantees.
Additionally, specific disclosures about obligations under guarantees would be
required. Until the final interpretation is issued, the Company cannot complete
the quantification of the effects of the interpretation on the Company's
financial condition and results of operation.

9. GOODWILL

SFAS No. 142, "Goodwill and Other Intangible Assets"
The Company adopted SFAS No. 142 on January 1, 2002. Under the new standard,
goodwill is no longer amortized, but rather is tested for impairment upon
adoption and at least annually thereafter. The annual test may be performed
anytime during the year, but must be performed at the same time each year.

Strategic Energy's initial valuation and annual impairment test have been
completed and there was no impairment of the $14.0 million of goodwill.


                                       27




In accordance with SFAS No. 142, the Company completed its initial impairment
test of RSAE during the second quarter of 2002 and recorded a $3.0 million
write-down of goodwill. The goodwill write-down is reflected as a cumulative
effect to January 1, 2002, of a change in accounting principle. RSAE completed
its first annual impairment test in September and no additional write-down was
necessary. At September 30, 2002, RSAE had $20.0 million of goodwill. First
quarter 2002 income statement information as reported in the March 31, 2002,
report on Form 10-Q has been restated below to reflect the cumulative effect to
January 1, 2002, of a change in accounting principle as follows:





For the three months ended March 31, 2002                       Great Plains
(in thousands, except per share amounts)                          Energy          KCP&L

                                                                          
Net loss, as originally reported                                 $  (2,897)     $  (7,981)
Cumulative effect to January 1, 2002,
   of a change in accounting principle                              (3,000)        (3,000)
Net loss, as restated                                               (5,897)       (10,981)
Preferred stock dividend requirements                                  412              -
Loss available for common stock, as restated                     $  (6,309)     $ (10,981)

Basic and diluted loss per common share,
   as originally reported                                        $   (0.05)
Cumulative effect to January 1, 2002, of a change
   in accounting principle                                           (0.05)
 Basic and diluted loss per common share,
   as restated                                                   $   (0.10)

Retained earnings at March 31, 2002, as originally reported      $ 315,829      $ 185,866
Cumulative effect to January 1, 2002, of a change
   in accounting principle                                          (3,000)        (3,000)
Retained earnings at March 31, 2002, as restated                 $ 312,829      $ 182,866




                                       28




The following table adjusts the reported 2001 Great Plains Energy and
Consolidated KCP&L income statement information to add back goodwill
amortization as if the provisions of SFAS No. 142 had been applied during all
periods presented.




                                                         Three Months
                                                            Ended         Year to Date
                                                         September 30     September 30
 (in thousands, except per share amounts)                    2001            2001

                                                                     
Income before extraordinary item, as reported              $ 55,532        $  88,792
Add back: Goodwill amortization                                 987            2,729
Income before extraordinary item                             56,519           91,521
Early extinguishment of debt, net of income taxes                 -           15,872
Income, as adjusted                                          56,519          107,393
Preferred stock dividend requirements                           412            1,236
Earnings available for common stock, as adjusted           $ 56,107        $ 106,157

Basic and diluted earnings per common share before
  extraordinary item, as reported                          $   0.89        $    1.41
Add back:  Goodwill amortization                               0.02             0.04
Basic and diluted earnings per common share before
  extraordinary item, as adjusted                              0.91             1.45
Early extinguishment of debt                                      -             0.26
Basic and diluted earnings per common share, as adjusted   $   0.91        $    1.71



10. RECEIVABLES

The Company's accounts receivables are comprised of the following:

                                                    September 30     December 31
                                                       2002             2001
                                                             (thousands)
Kansas City Power & Light Receivables Company        $  51,269        $  25,723
KCP&L other receivables                                 41,356           36,788
  Consolidated KCP&L receivables                        92,625           62,511
Great Plains Energy other receivables                  141,379           89,603
  Great Plains Energy receivables                    $ 234,004        $ 152,114

In 1999, KCP&L entered into a revolving agreement to sell all of its right,
title and interest in the majority of its customer accounts receivable to
Receivables Company, a special purpose entity established to purchase customer
accounts receivable from KCP&L expiring in October 2003. KCP&L expects the
agreement to be renewed annually. Receivables Company has sold receivable
interests to outside investors. Accounts receivable sold under the revolving
agreement between Receivables Company and KCP&L totaled $121.3 million at
September 30, 2002 and $95.7 million at December 31, 2001. These sales included
unbilled receivables of $37.5 million at September 30, 2002, and $28.9 million
at December 31, 2001. In consideration of the sale, KCP&L received $70 million
in cash and the remaining balance in the form of a subordinated note from
Receivables Company. The agreement is structured as a true sale under which the
creditors of Receivables Company are entitled to be satisfied out of the assets
of Receivables Company prior to any value being returned to KCP&L or its
creditors.

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 and are included in non-


                                       29



operating expenses. KCP&L services the receivables and receives an annual
servicing fee of 0.25% of the outstanding principal amount of the receivables
sold and retains any late fees charged to customers. As currently proposed, the
FASB exposure draft related to identifying and accounting for special-purpose
entities would not require consolidation of the Receivables Company.

Information regarding KCP&L's sale of accounts receivable is reflected in the
following table.

                                  Three Months Ended           Year to Date
                                     September 30               September 30
                                   2002         2001         2002         2001
                                                   (thousands)

Gross proceeds on sale of
  accounts receivable            $330,458     $321,025     $763,407     $755,507
Collections                       326,344      296,893      745,370      721,470
Loss on sale of accounts
  receivable                        1,104        1,943        3,457        7,602
Late fees                             887          976        2,002        2,356

KCP&L other receivables at September 30, 2002, and December 31, 2001, consist
primarily of receivables from partners in jointly-owned electric utility plants,
bulk power sales receivables and accounts receivable held by RSAE and Worry
Free. Great Plains Energy other receivables at September 30, 2002, and December
31, 2001, are primarily the accounts receivable held by Strategic Energy which
include unbilled receivables of $61.8 million at September 30, 2002, and $48.5
million at December 31, 2001.

11. DERIVATIVE FINANCIAL INSTRUMENTS

On January 1, 2001, the Company adopted SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities", as amended. SFAS No. 133 requires that
every derivative instrument be recorded on the balance sheet as an asset or
liability measured at its fair value and that changes in the fair value be
recognized currently in earnings unless specific hedge accounting criteria are
met.

SFAS No. 133 requires that as of the date of initial adoption, the difference
between the fair market value of derivative instruments recorded on the balance
sheet and the previous carrying amount of those derivatives be reported in net
income or other comprehensive income, as appropriate, as a cumulative effect of
a change in accounting principle. The adoption of SFAS No. 133 on January 1,
2001, required the Company to record a $0.2 million expense, net of $0.1 million
of income tax. The Company did not reflect this immaterial amount as a
cumulative effect. This entry increased interest expense by $0.6 million and
reduced purchased power expense by $0.3 million. The Company also recorded $17.4
million, net of $12.6 million of income tax, as a cumulative effect of a change
in accounting principle applicable to comprehensive income for its cash flow
hedges. Cash flow hedges are derivative instruments used to mitigate the
exposure to variability in expected future cash flows attributable to a
particular risk.

Derivative Instruments and Hedging Activities
The Company's activities expose it 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 its operating results.

The Company'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. The Company maintains
commodity-price risk management strategies that use derivative


                                       30



instruments to minimize significant, unanticipated earnings fluctuations caused
by commodity price volatility.

The Company's risk management activities, including the use of derivatives, are
subject to the management, direction and control of internal Risk Management
Committees.

Interest Rate Risk Management
KCP&L utilizes interest rate management derivatives to adjust the Company's
liability portfolio to optimize the mix of fixed and floating rate debt within
an established range.

In the third quarter, KCP&L remarketed its 1998 Series A, B, and D EIRR bonds
totaling $146.5 million to a 5-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 LIBOR to effectively create a floating
interest rate obligation. The transaction is a fair value hedge with the
assumption of no ineffectiveness under SFAS No. 133. The fair value of the swap
is recorded on KCP&L's balance sheet as an asset with an offset to the
respective debt balances and has no impact on earnings. Future changes in the
fair market value of the swap will be similarly recorded on the balance sheet
with no impact on earnings. At September 30, 2002, the fair value of the swap
was $3.7 million.

KCP&L has two interest rate swap agreements in place to fix the interest rate on
$30 million of floating-rate long-term debt. These swaps do not meet the
criteria to qualify for hedge accounting. The swap agreements terminate in 2003
and effectively fix the interest at a weighted-average rate of 3.88%. The fair
market values of these agreements are recorded as current assets or liabilities
and adjustments to interest expense. Changes in the fair market value of these
instruments are recorded in the income statement.

Commodity Risk Management
KCP&L's risk management policy is to use derivative hedge instruments to
mitigate its exposure to market price fluctuations on its projected gas
generation requirements for retail and firm wholesale sales. These hedging
instruments are designated as cash flow hedges. The fair market value of these
instruments is recorded as current assets or current liabilities. When the gas
is purchased and to the extent the hedge is effective at mitigating the impact
of a change in the purchase price of gas, the amounts in other comprehensive
income are reclassified to the consolidated income statement. To the extent that
the hedges are not effective, the ineffective portion of the changes in fair
market value are recorded directly in fuel expense. As of September 30, 2002,
all of KCP&L's gas hedging instruments have expired.

Strategic Energy maintains a commodity-price risk management strategy that uses
forward physical energy purchases and derivative instruments to minimize
significant, unanticipated earnings fluctuations caused by commodity-price
volatility. An option that was designated as a cash flow hedge expired on
December 31, 2001. The option allowed Strategic Energy to purchase up to 270
megawatts of power at a fixed rate of $21 per mwh. The fair market value of this
option and swap agreements designated as cash flow hedges at January 1, 2001,
was recorded as a current asset and a cumulative effect of a change in
accounting principle in comprehensive income.

As a result of supplying electricity to retail customers under fixed rate
contracts, Strategic Energy's policy is to match customers' demand with fixed
price purchases. In certain markets where Strategic Energy operates, entering
into forward fixed price contracts is cost prohibitive. By entering into swap
contracts for a portion of its forecasted purchases in these markets, the future
purchase price of electricity is effectively fixed under these swap contracts
protecting Strategic Energy from price volatility. The swap contracts limit the
unfavorable effect that price increases will have on electricity purchases.
Under SFAS No. 133, the majority of the swap agreements are designated as cash
flow


                                       31



hedges resulting in the difference between the market value of energy and the
hedge value being recorded as comprehensive income (loss). To the extent that
the hedges are not effective, the ineffective portion of the changes in fair
market value will be recorded directly in purchased power. At September 30,
2002, the accumulated comprehensive loss, net of income taxes and minority
interest, reflected in Great Plains Energy's consolidated statement of
capitalization reflected a $4.5 million loss related to such cash flow hedges.
However, substantially all of the energy hedged with the swaps has been sold to
customers through contracts at prices different than the fair market value used
to value the swaps. Therefore, Strategic Energy does not anticipate incurring
any of the losses represented in comprehensive income.

At January 1, 2001, Strategic Energy also had a few swap agreements that did not
qualify for hedge accounting. The fair market value of these swaps at January 1,
2001, was recorded as an asset or liability on the consolidated balance sheet
and an adjustment to the cost of purchased power. The change in the fair market
value was recorded in purchased power. As of September 30, 2002, all of these
swaps have expired.

KLT Gas' risk management policy is to use firm sales agreements or financial
hedge instruments to mitigate its exposure to market price fluctuations on up to
85% of its daily natural gas production. These hedging instruments are
designated as cash flow hedges. The fair market value of these instruments at
January 1, 2001, was recorded as current assets or current liabilities, as
applicable, and the cumulative effect of a change in accounting principle in
comprehensive income. When the gas is sold and to the extent the hedge is
effective at mitigating the impact of a change in the sales price of gas, the
amounts in other comprehensive income are reclassified to the consolidated
income statement. To the extent that the hedges are not effective, the
ineffective portion of the changes in fair market value are recorded directly in
gas revenues. KLT Gas is currently developing gas properties; therefore, no
production is hedged at September 30, 2002.

The amounts recorded related to the cash flow hedges in other comprehensive
income (OCI) are summarized below. Consolidated KCP&L activity for the three
months ended September 30, 2002, was insignificant.




Great Plains Energy activity for the three months ended September 30, 2002

                                                  Increase
                                    June 30    (Decrease) in                   September 30
                                     2002           OCI        Reclassified        2002
                                                         (millions)
                                                                      
Assets
  Other current assets              $  0.1         $ (0.3)        $  0.4          $  0.2
  Other deferred debits                0.5           (0.5)             -               -
Liabilities and capitalization
  Other current liabilities           (7.9)           2.7           (0.5)           (5.7)
  Accumulated OCI                      5.9           (1.6)           0.2             4.5
  Deferred income taxes                4.1           (0.5)             -             3.6
  Other deferred credits              (2.7)           0.2           (0.1)           (2.6)



                                       32






Great Plains Energy and Consolidated KCP&L activity for the three months ended September 30, 2001

                                                  Increase
                                    June 30    (Decrease) in                   September 30
                                     2001           OCI        Reclassified        2001
                                                         (millions)
                                                                      
Assets
  Other current assets              $  6.0         $ (3.1)        $ (2.9)         $    -
Liabilities and capitalization
  Other current liabilities          (28.0)           8.8            4.2           (15.0)
  Accumulated OCI                     10.8            3.3           (0.7)           13.4
  Deferred income taxes                7.5            2.3           (0.4)            9.4
  Other deferred credits               3.7          (11.3)          (0.2)           (7.8)





Great Plains Energy activity year to date September 30, 2002

                                                  Increase
                                 December 31   (Decrease) in                   September 30
                                     2001           OCI        Reclassified        2002
                                                   (millions)
                                                                      
Assets
  Other current assets              $ (0.2)        $  0.1         $  0.3          $  0.2
Liabilities and capitalization
  Other current liabilities          (12.7)           1.7            5.3            (5.7)
  Accumulated OCI                     12.1           (5.0)          (2.6)            4.5
  Deferred income taxes                8.5           (2.9)          (2.0)            3.6
  Other deferred credits              (7.7)           6.1           (1.0)           (2.6)





Consolidated KCP&L activity year to date September 30, 2002

                                                  Increase
                                 December 31   (Decrease) in                   September 30
                                     2001           OCI        Reclassified        2002
                                                   (millions)
                                                                      
Assets
  Other current assets              $ (0.2)        $  0.3         $ (0.1)         $    -
Liabilities and capitalization
  Other current liabilities           (0.1)           0.1              -               -
  Accumulated OCI                      0.2           (0.2)             -               -
  Deferred income taxes                0.1           (0.2)           0.1               -





Great Plains Energy and Consolidated KCP&L activity year to date September 30, 2001

                                  Cumulative
                                   Effect to      Increase
                                  January 1,   (Decrease) in                   September 30
                                     2001           OCI        Reclassified        2001
                                                   (millions)
                                                                      
Assets
  Other current assets              $ 44.5         $(20.4)        $(24.1)         $    -
Liabilities and capitalization
  Other current liabilities           (6.8)         (15.6)           7.4           (15.0)
  Accumulated OCI                    (17.4)          23.2            7.6            13.4
  Deferred income taxes              (12.7)          16.5            5.6             9.4
  Other deferred credits              (7.6)          (3.7)           3.5            (7.8)



                                       33






Reclassified to earnings for the three months ended September 30,

                                     Great Plains Energy            Consolidated KCP&L
                                     2002           2001           2002            2001
                                                         (millions)
                                                                      
Gas revenues                        $    -         $ (0.6)        $    -          $ (0.6)
Purchased power expense                0.1           (0.7)             -            (0.7)
Minority interest                      0.1            0.2              -             0.2
Income taxes                             -            0.4              -             0.4
  OCI                               $  0.2         $ (0.7)        $    -          $ (0.7)





Reclassified to earnings year to date September 30,

                                     Great Plains Energy            Consolidated KCP&L
                                     2002           2001           2002            2001
                                                         (millions)
                                                                      
Gas revenues                        $ (0.2)        $ (3.7)        $    -          $ (3.7)
Fuel expense                           0.1              -            0.1               -
Purchased power expense               (5.5)          20.4              -            20.4
Minority interest                      1.0           (3.5)             -            (3.5)
Income taxes                           2.0           (5.6)          (0.1)           (5.6)
  OCI                               $ (2.6)        $  7.6         $    -          $  7.6



12. KCP&L JANUARY ICE STORM

At the end of January 2002, the most damaging ice storm in Kansas City history
caused roughly 285,000 customer outages throughout the KCP&L territory.
Incremental costs incurred through September 30, 2002, related to the January
ice storm were approximately $51.3 million of which $14.7 million were capital
expenditures and therefore recorded to utility plant. KCP&L expensed $16.5
million ($0.16 per share) for the Kansas jurisdictional portion of the storm
costs and deferred as a regulatory asset $20.1 million of the storm costs
applicable to Missouri.

In the second quarter of 2002, the KCC approved the stipulation and agreement
that KCP&L had reached with the Commission staff and the Citizens Utility
Ratepayers Board with regard to treatment of the Kansas portion of the ice storm
costs. Under this stipulation and agreement, KCP&L received a rate moratorium
until 2006 in exchange for KCP&L's agreement to not seek recovery of the $16.5
million expense for the Kansas jurisdictional portion of the storm costs and
reduce rates by $12 - $13 million in 2003. Additionally, KCP&L agreed to
determine depreciation expense of the Wolf Creek nuclear generating station
using a 60 year life instead of a 40 year life effective January 2003, which
results in a reduction of expense by approximately $7 - $8 million in 2003.
KCP&L also agreed to file a rate case by May 15, 2006.

Effective August 2002, the MPSC approved KCP&L's application for an accounting
authority order related to the Missouri jurisdictional portion of the storm
costs. The order allows KCP&L to defer and amortize $20.1 million, representing
the Missouri impact of the storm, through January 2007. The amortization began
in September 2002 and is expected to be approximately $1.5 million in 2002 and
approximately $4.6 million annually for the remainder of the amortization
period.

13.  ASSET RETIREMENT OBLIGATIONS

In 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations". SFAS No. 143 is effective for fiscal years beginning after June
15, 2002. Under the new pronouncement, an entity must recognize as a liability
the fair value of legal obligations associated with the retirement of long-

                                       34



lived assets. The Company has substantially completed the identification of its
retirement obligations and is currently evaluating the effects on the Company's
financial condition. Management believes that nuclear decommissioning cost is
its most significant legal retirement obligation.

After adoption of SFAS No. 143 in 2003, the additional obligation for nuclear
decommissioning will increase liabilities, currently estimated to be less than
$100 million, with offsets to net utility plant and a regulatory asset. The
amount recorded to the electric plant accounts will be depreciated over the
remaining life of Wolf Creek. The associated liability will be increased for the
passage of time (accretion) to operating expense. Trust fund income and losses
from the external decommissioning trusts would be reported as investment income
or loss. KCP&L does not anticipate results of operations to be significantly
affected by the adoption of SFAS No. 143 as long as KCP&L is regulated.
Regulatory assets or liabilities will be recorded when SFAS No. 143 is first
adopted and then yearly for the difference between decommissioning expense
determined by regulation and amounts required by SFAS No. 143.

14.  Subsequent Event

On November 7, 2002, Great Plains Energy entered into an Agreement and Plan of
Merger (Agreement) with Environmental Lighting Concepts, Inc. (ELC), Gregory J.
Orman and Mark R. Schroeder (ELC Shareholders), and Innovative Energy
Consultants Inc., a recently created, wholly-owned subsidiary of Great Plains
Energy. Mr. Orman is Executive Vice President of Corporate Development and
Strategic Planning of Great Plains Energy, and Mr. Schroeder is an employee of a
Great Plains Energy subsidiary. ELC indirectly owned 5.8% of Strategic Energy, a
Great Plains Energy majority-owned subsidiary that is an energy management
company. As provided for in the Agreement, ELC was acquired and merged with and
into Innovative Energy Consultants, whereupon the existence of ELC ceased and
Innovative Energy Consultants continued as the surviving corporation and a
wholly-owned subsidiary of Great Plains Energy. The merger increased Great
Plains Energy's indirect ownership interest in Strategic Energy from 82.75% to
88.55%. Certain employees of Strategic Energy and other investors indirectly
hold the remaining ownership interest in Strategic Energy.

In exchange for their entire ownership interest in ELC, the ELC Shareholders
received an aggregate amount of $15.1 million in Great Plains Energy common
stock and notes issued by Great Plains Energy and Innovative Energy Consultants.
Great Plains Energy issued 387,596 common shares, valued at $8 million, which
were distributed to the ELC Shareholders in proportion to their ownership
interests in that company. Great Plains Energy also issued a promissory note to
Mr. Orman in the principal amount of approximately $4.7 million and Innovative
Energy Consultants issued a promissory note to Mr. Schroeder in the principal
amount of approximately $2.4 million. Both notes mature on January 1, 2003, and
bear interest at 2.48% per annum. See Note 6. Related Party Transactions and
Relationships, which has been updated for this subsequent event, for further
discussion of this transaction.


                                       35



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

The Management's Discussion and Analysis of Financial Condition and Results of
Operations that follow are a combined presentation for Great Plains Energy and
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. It should be read in conjunction with the accompanying Financial
Statements and Notes and with the management's discussion and analysis included
in the Company's 2001 annual report on Form 10-K.

Great Plains Energy Incorporated
Effective October 1, 2001, Great Plains Energy became the holding company of
KCP&L, GPP and KLT Inc. and subsidiaries. As a diversified energy company, its
primary segments of business include:

o KCP&L, an integrated electric utility in the states of Missouri and Kansas,
  provides reliable, affordable electricity to retail customers;
o Strategic Energy provides power supply coordination services in several
  deregulated electricity markets, including Pennsylvania, southern
  California, Ohio, New York, Massachusetts and Texas; and
o KLT Gas acquires and develops early stage coalbed methane natural gas
  properties.

Effective October 1, 2001, all outstanding KCP&L shares were exchanged one for
one for shares of Great Plains Energy. The Great Plains Energy trading symbol
"GXP" replaced the KCP&L trading symbol "KLT" on the New York Stock Exchange.

During the second quarter of 2002, the Company's management revised its
corporate business strategy. The goal is to become a premier diversified energy
company that achieves annual growth in earnings per share in a financially
disciplined manner. To achieve this goal, Great Plains Energy intends to focus
on its three primary segments of business and identify synergistic energy
investments by:
o Developing KCP&L into an operationally excellent electric utility,
o Continuing to grow Strategic Energy's business model into new markets,
o Developing KLT Gas into a premier brand in the unconventional natural gas
  exploration market, and
o Identifying synergistic energy investments that
  drive earnings growth while supporting the Company's core strategies.


                                       36




Great Plains Energy Results of Operations




                                         Three Months Ended                   Year to Date
                                            September 30                      September 30
                                         2002           2001               2002             2001
                                                              (millions)
                                                                             
Operating revenues                     $ 585.0        $ 480.9           $ 1,409.2        $ 1,107.6
Fuel                                     (48.7)         (52.5)             (118.1)          (124.8)
Purchased power                         (221.1)        (130.5)             (545.2)          (277.6)
  Revenues, net of
    fuel and purchased power             315.2          297.9               745.9            705.2
Other operating expenses                (141.0)        (126.3)             (403.4)          (395.5)
Depreciation and depletion               (37.7)         (40.4)             (112.4)          (117.0)
Gain on property                          (0.6)           0.5                (0.5)            22.2
  Operating income                       135.9          131.7               229.6            214.9
Loss from equity investments              (0.3)          (0.4)               (0.9)            (0.5)
Non-operating income (expenses)           (6.5)         (20.7)              (21.0)           (21.3)
Interest charges                         (22.9)         (28.7)              (67.2)           (78.5)
Income taxes                             (37.4)         (26.3)              (38.6)           (25.8)
Early extinguishment of debt                 -              -                   -             15.9
Cumulative effect of a change
  in accounting principle                    -              -                (3.0)               -
Net income                                68.8           55.6                98.9            104.7
Preferred dividends                       (0.3)          (0.5)               (1.2)            (1.3)
Earnings applicable to common          $  68.5        $  55.1              $ 97.7          $ 103.4




Three months ended September 30, 2002, compared to September 30, 2001
Great Plains Energy's earnings for the three months ended, as detailed in the
table below, increased $13.4 million, or $0.22 per share, compared to the same
period of 2001.

                                        Three Months Ended September 30
                                    2002         2001         2002        2001
                                  Earnings      Earnings       EPS         EPS
                                        (millions)
KCP&L                              $ 63.7       $ 59.3       $ 1.03      $ 0.96
Subsidiary operations                (1.4)        (0.3)       (0.02)      (0.01)
  Consolidated KCP&L                 62.3         59.0         1.01        0.95
Strategic Energy                      6.7         10.0         0.11        0.16
KLT Gas                               0.3          0.3            -           -
Other non-regulated operations       (0.8)       (14.2)       (0.01)      (0.22)
  Total                            $ 68.5       $ 55.1       $ 1.11      $ 0.89

KCP&L's increase in earnings for the three months ended September 30, 2002,
compared to the same period of 2001, is primarily the result of warmer summer
2002 weather compared to 2001, continued load growth, lower average fuel cost
per mmbtu and a significantly lower purchased power price per mwh. These factors
combined to more than offset increased administrative and general expenses
including pension costs and other benefit costs. Strategic Energy's earnings
increased $6.0 million, excluding earnings during the three months ended
September 30, 2001, of $9.3 million from the sale of power purchased from one
supplier under very favorable wholesale contracts that expired at the end of
2001. The increase is due to continued growth in retail electric sales resulting
from increases in customer accounts and mwh's served. This was partially offset
by increased salaries and benefits and


                                       37



an effective state income tax rate true-up for the first six months of 2002 and
higher state income tax rates due to higher sales in states with higher income
tax rates for the quarter. Other non-regulated operations includes, among other
things, earnings from affordable housing of $3.2 million for the three months
ended September 30, 2002, compared to a loss of $2.1 million for the same period
of 2001. Additionally, the three months ended September 30, 2001, reflects DTI
losses of $10.1 million.

Year to date September 30, 2002, compared to September 30, 2001
Great Plains Energy's earnings year to date September 30, 2002, compared to 2001
increased $13.2 million, or $0.22 per share, excluding the cumulative effect of
a change in accounting principle in 2002 and the early extinguishment of debt in
2001.




                                                      Year to Date September 30
                                           2002          2001          2002        2001
                                          Earnings     Earnings         EPS         EPS
                                               (millions)
                                                                      
KCP&L                                      $ 84.1      $  79.8        $ 1.36      $ 1.28
Subsidiary operations                        (2.7)        (3.7)        (0.04)      (0.06)
Cumulative effect to January 1, 2002
  of a change in accounting principle        (3.0)           -         (0.05)          -
    Consolidated KCP&L                       78.4         76.1          1.27        1.22
Strategic Energy                             21.8         17.3          0.35        0.28
KLT Gas                                      (0.1)        13.6             -        0.22
Other non-regulated operations               (2.4)       (19.5)        (0.04)      (0.31)
  Earnings excluding extraordinary item      97.7         87.5          1.58        1.41
Early extinguishment of debt                    -         15.9             -        0.26
  Total                                    $ 97.7      $ 103.4        $ 1.58      $ 1.67


KCP&L earnings increased $4.3 million year to date September 30, 2002, compared
to the same period of 2001. Warmer summer 2002 weather combined with the
positive impact of the return to service of Hawthorn No. 5 in June 2001 and
significantly lower cost per mwh of purchased power were partially offset by the
impact of expensing the Kansas jurisdictional portion of the January 2002 ice
storm costs and increased administrative and general expenses including pension
costs and other benefit costs. Strategic Energy's earnings increased $19.0
million, excluding earnings during year to date September 30, 2001, of $14.5
million from the sale of power purchased from one supplier under very favorable
wholesale contracts that expired at the end of 2001. The increase is due to
continued growth in the retail markets including increases in customer accounts
and mwh's served partially offset by increased salaries and benefits and higher
state income tax rates. KLT Gas is currently developing gas properties following
its most recent sale of property during the second quarter of 2001 which
resulted in an after tax gain of $12.0 million. Other non-regulated operations
includes earnings from affordable housing of $6.4 million and $5.8 million year
to date September 30, 2002 and 2001, respectively. Additionally, year to date
September 30, 2001, reflects DTI losses of $24.0 million, excluding the early
extinguishment of debt.

On December 31, 2001, DTI filed voluntary petitions for bankruptcy. As a result
of DTI's filing for bankruptcy protection, and KLT Telecom's ensuing loss of
control, KLT Telecom has not included in its results for the three months ended
and year to date September 30, 2002, the ongoing earnings or loss incurred by
DTI.

The Company adopted SFAS No. 142, "Goodwill and Other Intangible Assets"
effective January 1, 2002. In accordance with SFAS No. 142, the Company
completed its initial impairment test of RSAE during the second quarter of 2002
and determined that a $3.0 million write-down of goodwill was


                                       38



required. As a result, year to date September 30, 2002, Great Plains Energy net
income reflects the $3.0 million cumulative effect to January 1, 2002, of a
change in accounting principle. Ongoing annual impairment tests are required by
SFAS No. 142. RSAE completed its first annual impairment test in September and
no additional write-down was necessary.

On February 1, 2001, DTI, an equity investment of KLT Telecom on that date,
completed a tender offer for 50.4% of its outstanding senior discount notes.
This transaction resulted in a $15.9 million ($0.26 per share) extraordinary
gain on the early extinguishment of debt.

For further discussion regarding each segment's results of operations, see its
respective section below.

Consolidated KCP&L
The following discussion of consolidated KCP&L results of operations includes
KCP&L, an integrated electric utility and HSS, an unregulated subsidiary of
KCP&L. References to KCP&L, in the discussion that follows, reflect only the
operations of the integrated electric utility. The discussion excludes the
results of operations for GPP and KLT Inc. and subsidiaries, which were
transferred to Great Plains Energy on October 1, 2001.

Consolidated KCP&L Business Overview
KCP&L consists of two business units - power and delivery.

The power business unit has over 3,700 megawatts of generating capacity. During
2001, KCP&L entered into a $200 million, five-year construction and synthetic
operating lease transaction for five combustion turbines that will add 385
megawatts of peaking capacity. During the third quarter of 2002, the lease was
amended to reduce the amount financed from the previously estimated $200 million
to $176 million to reflect changes in the estimated cost for the purchase,
installation, assembly and construction of the five combustion turbines.
Construction began in the third quarter of 2002 with the expected commercial
operation of the five combustion turbines in the spring and summer 2003.

The delivery business unit consists of transmission and distribution facilities
that serve over 480,000 customers as of September 30, 2002. KCP&L continues to
experience load growth approximating the historical average of 2.0% to 2.5%
annually through increased customer usage and additional customers. Rates
charged for electricity are below the national average.

Under FERC Order 2000, KCP&L, as an investor-owned utility, is strongly
encouraged to join a FERC approved RTO. RTOs combine regional transmission
operations of utility businesses into a regional organization that schedules
transmission services and monitors the energy market to ensure regional
transmission reliability and non-discriminatory access. KCP&L is a member of the
SPP. During the first quarter of 2002, the SPP and the MISO voted to consolidate
the two organizations to create a larger Midwestern RTO, a non-profit
organization that will operate in twenty states and one Canadian province. The
consolidation is expected to be completed during the first quarter of 2003 and
has received FERC approval. FERC has already approved an RTO proposal submitted
by the MISO.

During the third quarter of 2002, FERC issued a Notice of Proposed Rulemaking to
Remedy Undue Discrimination through Open Access Transmission Service and
Standard Electricity Market Design. The proposed rulemaking is designed to
establish a single non-discriminatory open access transmission tariff with a
single transmission service that is applicable to all users of the interstate
transmission grid. All public utilities that own, control or operate interstate
transmission facilities would be required to become an independent transmission
provider, turn over the operation of their transmission facilities to an RTO
that meets the definition of an independent transmission provider or contract
with an entity that meets the definition of an independent transmission
provider. KCP&L is in the process of evaluating the impact of the proposed
rulemaking on its operations and providing


                                       39


comments on the proposed rulemaking to FERC. Additionally, regulatory approvals
would have to be received from the MPSC and the KCC prior to KCP&L's
participation in an independent transmission provider.

KCP&L also has a wholly-owned unregulated subsidiary, HSS, that holds
investments in businesses primarily in residential services. HSS is comprised of
two subsidiaries, RSAE and Worry Free Services, Inc.

Consolidated KCP&L Results of Operations
The following table summarizes consolidated KCP&L's comparative results of
operations. For comparative purposes only, the 2001 periods presented below have
been restated to exclude the results of operations for KLT Inc. and subsidiaries
and GPP, which were transferred to Great Plains Energy on October 1, 2001.
Therefore, the 2001 periods presented below do not agree with the 2001 periods
presented in KCP&L's consolidated statements of income and should only be used
in the context of the discussion and analysis that follows.




                                       Three Months Ended                  Year to Date
                                           September 30                    September 30
                                        2002          2001              2002          2001
                                                            (millions)
                                                                        
Operating revenues                    $ 351.5       $ 339.8           $ 827.9       $ 811.6
Fuel                                    (48.7)        (52.5)           (118.1)       (124.8)
Purchased power                         (15.7)        (21.1)            (38.9)        (59.1)
  Revenues, net of
    fuel and purchased power            287.1         266.2             670.9         627.7
Other operating expenses               (124.8)       (108.6)           (361.5)       (334.8)
Depreciation and depletion              (37.1)        (34.9)           (110.9)       (102.7)
Gain on property                         (0.6)         (0.1)             (0.3)         (1.5)
  Operating income                      124.6         122.6             198.2         188.7
Loss from equity investments                -             -                 -          (0.1)
Non-operating income (expenses)          (1.9)         (3.6)             (4.1)         (4.1)
Interest charges                        (20.5)        (22.0)            (61.5)        (60.4)
Income taxes                            (39.9)        (37.5)            (51.2)        (46.7)
Cumulative effect of a change
  in accounting principle                   -             -              (3.0)            -
Net income                               62.3          59.5              78.4          77.4
Preferred dividends                         -          (0.5)                -          (1.3)
Earnings applicable to common         $  62.3       $  59.0           $  78.4       $  76.1


Consolidated KCP&L's earnings increased $3.3 million for the three months ended
September 30, 2002, and $2.3 million year to date September 30, 2002, compared
to the same periods of 2001.

For the three months ended September 30, 2002, KCP&L earnings increased $4.4
million, compared to the same period of 2001. Warmer summer 2002 weather,
continued load growth, lower average fuel cost per mmbtu and a significantly
lower purchased power cost per mwh combined to more than offset increased
administrative and general expenses including pension costs of $4.3 million and
other employee-related costs of $5.6 million. KCP&L's increased earnings were
also offset by continued operating losses of HSS.

Year to date September 30, 2002, KCP&L earnings increased $4.3 million, compared
to the same period of 2001. The positive impact of the return to service of
Hawthorn No. 5 in June 2001 and significantly lower cost per mwh of purchased
power were offset by the impact of expensing the Kansas


                                       40



jurisdictional portion of the January 2002 ice storm costs and increased
administrative and general expenses including pension costs of $12.3 million and
other employee-related costs of $2.5 million.

The Company adopted SFAS No. 142, "Goodwill and Other Intangible Assets"
effective January 1, 2002. In accordance with SFAS No. 142, the Company
completed its initial impairment test of RSAE during the second quarter of 2002
and determined that a $3.0 million write-down of goodwill was required. As a
result, year to date September 30, 2002, Great Plains Energy net income reflects
the $3.0 million cumulative effect to January 1, 2002, of a change in accounting
principle. Ongoing annual impairment tests are required by SFAS No. 142. RSAE
completed its first annual impairment test in September and no additional
write-down was necessary.

Consolidated KCP&L Sales Revenues and Megawatt-hour (mwh) Sales




                                         Three Months Ended                      Year to Date
                                            September 30         %               September 30        %
                                         2002         2001     Change         2002         2001    Change
                                             (millions)                           (millions)
                                                                                 
Retail revenues
  Residential                          $ 146.1      $ 137.0      7 %        $ 300.1      $ 286.1     5 %
  Commercial                             131.9        130.2      1 %          328.6        322.1     2 %
  Industrial                              26.0         27.4     (5)%           72.2         80.4   (10)%
  Other retail revenues                    2.3          2.2      3 %            6.6          6.3     3 %
    Total retail                         306.3        296.8      3 %          707.5        694.9     2 %
Sales for resale revenues
  Bulk power sales                        23.3         20.9     11 %           60.2         49.8    21 %
  Other sales for resale revenues          1.3          1.3     (3)%            3.0          3.3   (10)%
Other revenues                             3.7          4.2    (15)%           10.0         11.6   (14)%
KCP&L electric revenues                  334.6        323.2      3 %          780.7        759.6     3 %
Subsidiary revenues                       16.9         16.6      2 %           47.2         52.0    (9)%
Consolidated KCP&L revenues            $ 351.5      $ 339.8      3 %        $ 827.9      $ 811.6     2 %






                                         Three Months Ended                      Year to Date
                                            September 30         %               September 30        %
                                         2002         2001     Change         2002         2001    Change
                                            (thousands)                          (thousands)
                                                                                  
Retail mwh sales
  Residential                            1,821        1,686      8 %          3,970        3,812     4 %
  Commercial                             1,991        1,920      4 %          5,273        5,185     2 %
  Industrial                               548          532      3 %          1,496        1,614    (7)%
  Other retail mwh sales                    20           19      6 %             61           58     7 %
    Total retail                         4,380        4,157      5 %         10,800       10,669     1 %
Sales for resale mwh
  Bulk power sales                       1,110          924     20 %          2,903        2,051    41 %
  Other sales for resale                    38           37      7 %             98           97     2 %
KCP&L electric mwh sales                 5,528        5,118      8 %         13,801       12,817     8 %


Total revenues increased $11.7 million for the three months ended and $16.3
million year to date September 30, 2002, compared to the same periods of 2001.
Warmer summer 2002 weather and continued load growth increased retail revenues
$9.5 million for the three months ended September 30, 2002. For the year to date
comparison, the increased retail revenues due to the warmer summer 2002 weather
and continued load growth were partially offset by the mild weather in the first
quarter of 2002 and the bankruptcy of one major industrial customer in early
2001 ($4.4 million of revenues year to date


                                       41



September 30, 2001). Load growth consists of higher usage-per-customer and the
addition of new customers. Less than 1% of revenues include an automatic fuel
adjustment provision.

Bulk power sales vary with system requirements, generating unit and purchased
power availability, fuel costs and requirements of other electric systems. The
significant increases in bulk power mwh sales were partially offset by a decline
of approximately 4% in prices per bulk power mwh sold for the three months ended
and 13% year to date September 30, 2002, compared to the same periods in 2001.

In October 2002, the Staff of the MPSC concluded its review of the Missouri
jurisdictional earnings for KCP&L and determined that the current rate levels do
not warrant action at this time.

In the second quarter 2002, the KCC approved the stipulation and agreement that
KCP&L had reached with the Commission staff and the Citizens Utility Ratepayers
Board with regard to treatment of the Kansas portion of the ice storm costs.
Under this stipulation and agreement, KCP&L received a rate moratorium until
2006 in exchange for KCP&L's agreement to not seek recovery of the $16.5 million
expense for the Kansas jurisdictional portion of the storm costs and reduce
rates by $12 - $13 million in 2003. Additionally, KCP&L agreed to determine
depreciation expense of the Wolf Creek nuclear generating station using a 60
year life instead of a 40 year life effective January 2003, which results in a
reduction of expense by approximately $7 - $8 million in 2003. KCP&L also agreed
to file a rate case by May 15, 2006.

KCP&L Fuel and Purchased Power
KCP&L fuel costs decreased $3.8 million for the three months ended and $6.7
million year to date September 30, 2002, compared to the same periods of 2001,
even though generation increased 7% and 10%, respectively. Lower fuel cost per
mmBtu due to additional coal and less natural gas and oil in the generation fuel
mix was the primary reason for the decline in fuel costs. The return to service
of Hawthorn No. 5, a low cost coal-fired unit, in June 2001 contributed to the
change in generation fuel mix. Significantly lower natural gas prices and lower
cost of uranium in the 2002 periods also contributed to the lower fuel cost.

Purchased power expenses decreased $5.4 million for the three months ended and
$20.2 million year to date September 30, 2002, compared to the same periods of
2001. Cost per mwh purchased decreased approximately 40% in 2002 compared to
2001 due to regional energy availability and a less volatile energy market. The
significantly lower cost per mwh purchased more than offset the effect on
purchased power expense of a 5% increase in the quantity of power purchased
during the three months ended. Also contributing to the year to date decrease
was a 9% decrease in the quantity of power purchased due to the availability of
KCP&L generating units.

The fuel cost per mmBtu and the purchased power cost per mwh have a significant
impact on the results of operations for KCP&L. Generation fuel mix can change
the fuel cost per mmBtu substantially. Nuclear fuel costs per mmBtu remain
substantially less than the mmBtu price of coal. Replacement power costs for
planned Wolf Creek outages are accrued evenly over the unit's operating cycle,
as discussed below. KCP&L expects its cost of nuclear fuel to remain fairly
constant through the year 2003. Coal has a significantly lower cost per mmBtu
than natural gas and oil. KCP&L's procurement strategies continue to provide
delivered coal costs below the regional average. The cost per mwh for purchased
power is still significantly higher than the fuel 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,
availability and cost of purchased power and the requirements of other electric
systems to provide reliable power economically.

Montrose Unit No. 3, a 176-mw unit, returned to service at the end of the third
quarter 2002 following a forced outage due to damage to the turbine blades in
the combined high and intermediate pressure


                                       42



section of the turbine. Additional maintenance including replacing blades in the
low pressure section of the turbine to mitigate a long outage in the next few
years and maintenance originally scheduled for October was also completed during
the three-month outage. The unanticipated outage costs were approximately $4.3
million of capital expenditures, $0.9 million in additional operations and
maintenance expense and $4.0 million in net fuel and purchased power expense in
2002. These amounts do not reflect the $1.0 million expected to be recovered
from insurance.

Consolidated KCP&L Other Operating Expenses
KCP&L's other operating expenses increased $15.8 million for the three months
ended September 30, 2002, compared to the same period of 2001 primarily due to
increased administrative and general expenses including a $4.3 million increase
in pension expense, a $5.6 million increase in other employee-related costs, and
increased legal and injuries and damages expenses. KCP&L's other operating
expenses increased $36.2 million year to date September 30, 2002, compared to
the same period of 2001 primarily due to expensing $16.5 million for the Kansas
jurisdictional portion of the January ice storm and increased administrative and
general expenses including a $12.3 million increase in pension expense, a $2.5
million increase in other employee-related costs, and increased legal and
injuries and damages expenses. The increased pension expense for both periods is
mostly due to a significant decline in the market value of plan assets at the
end of the plan's year, September 30, 2001.

HSS's other expenses decreased $9.5 million year to date September 30, 2002,
compared to the same periods of 2001 due to the closure of some locations and
the implementation of cost saving strategies at RSAE.

Consolidated KCP&L Depreciation
Consolidated KCP&L's depreciation expense increased $2.2 million for the three
months ended and $8.2 million year to date September 30, 2002, compared to the
same periods of 2001, primarily due to increased capital additions relating to
Hawthorn No. 5, which was returned to service in 2001, and the purchase of the
previously leased Hawthorn No. 6 turbine at the end of the third quarter of
2001.

Consolidated KCP&L Interest Charges
Consolidated KCP&L's interest charges decreased $1.5 million for the three
months ended and increased $1.1 million year to date September 30, 2002,
compared to the same periods of 2001. A portion of the proceeds from long-term
debt issuances have been used to pay down short-term debt.

Long-term debt interest expense
KCP&L's long-term debt interest expense increased $1.7 million for the three
months ended and $1.0 million year to date September 30, 2002, compared to 2001,
primarily due to higher average levels of long-term debt outstanding. Year to
date, lower average rates on variable rate debt partially offset the higher
average levels of long-term debt. The higher average levels of long-term debt
primarily reflect the issuances of $375.0 million of unsecured, fixed-rate
senior notes partially offset by $257.0 million of scheduled debt repayments
since September 30, 2001.

Short-term debt interest expense
KCP&L's short-term debt interest expense decreased $2.1 million for the three
months ended and $6.6 million year to date September 30, 2002, compared to the
same periods of 2001. Average interest rates are down more than 50% and average
levels of outstanding commercial paper are down more than 70% for the 2002
periods compared to the same periods of 2001. KCP&L had $29.6 million of
commercial paper outstanding at September 30, 2002, and $193.2 million of
commercial paper outstanding at September 30, 2001.


                                       43



Capitalized interest
Allowance for borrowed funds used during construction decreased $7.7 million
year to date September 30, 2002, compared to the same periods of 2001 because of
decreased construction work in progress primarily due to the return to service
of Hawthorn No. 5 in 2001.

Wolf Creek
Wolf Creek, a nuclear generating station, represents about 15% of KCP&L's
generating capacity. The plant's operating performance has remained strong over
the last three years, contributing an average of 27% of KCP&L's annual mwh
generation while operating at an average capacity of 92%. Wolf Creek has the
lowest fuel cost per mmBtu of any of KCP&L's generating units.

KCP&L accrues the incremental operating, maintenance and replacement power costs
for planned outages evenly over the unit's operating cycle, normally 18 months.
As actual outage expenses are incurred, the refueling liability and related
deferred tax asset are reduced. Wolf Creek returned to service on April 27,
2002, following a 35-day refueling and maintenance outage that began on March
23, 2002. During the outage, a complete inspection of the reactor vessel head
indicated no corrosion or other problems of the type experienced at the
Davis-Besse nuclear plant in Ohio. The next outage is scheduled for the fall of
2003.

Ownership and operation of a nuclear generating unit exposes KCP&L to risks
regarding decommissioning costs at the end of the unit's life and to potential
retrospective assessments and property losses in excess of insurance coverage.

Strategic Energy

Strategic Energy Business Overview
Strategic Energy provides power supply coordination services for a management
fee by purchasing electricity and reselling it to retail customers in several
deregulated electricity markets, including Pennsylvania, California, Ohio, New
York, Massachusetts and Texas. As part of its process of managing electricity
portfolios for retail customers, Strategic Energy occasionally sells unsold
power back into the wholesale market. Strategic Energy also provides strategic
planning and consulting services in the natural gas and electricity markets.
During the first three quarters of 2002, power supply coordination services
provided to retail customers accounted for substantially all of Strategic
Energy's operating income.

In the first quarter of 2001, KLT Energy Services exchanged its ownership of
$4.7 million of preferred stock in another energy service company for additional
ownership in Strategic Energy. This transaction increased KLT Energy Services'
ownership of Strategic Energy from 72% to 83%. As of September 30, 2002, KLT
Energy Services has invested $17.0 million in cash and securities to acquire its
83% ownership position.

In 2000, Strategic Energy also provided retail gas services to commercial,
institutional and small manufacturing customers. Strategic Energy elected to
exit this business in the first quarter of 2001 to focus on power supply
coordination services and had phased out of retail gas services at the end of
2001. Strategic Energy made this decision after evaluating the organizational
demands, growth prospects and relative levels of profitability of both
businesses. As the marketplace and Strategic Energy's business evolves,
Strategic Energy may elect to re-enter the market for retail gas services.

Strategic Energy currently provides power supply coordination services on behalf
of approximately 29,100 commercial, institutional and small manufacturing
accounts. Strategic Energy's customer base is very diverse. Customers include
numerous Fortune 500 companies, school districts, and governmental entities.
Based on current signed contracts and expected usage, Strategic Energy


                                       44



forecasts a peak load of 2,560 megawatts in 2002. The largest concentration of
the forecasted load, 959 megawatts, is in California. The largest customer of
the forecasted peak load, 199 megawatts, is a retail grocery chain. Strategic
Energy enters into full-requirements contracts (usually one to five years in
duration) with customers to supply electricity and manage their energy needs. In
return, Strategic Energy receives an ongoing management fee which is included in
the contracted price for the electricity. Based on current signed contracts and
expected usage, Strategic Energy anticipates future mwh sales of 3.3 million for
the remainder of 2002 and 10.4 million, 6.9 million, 4.5 million and 1.2 million
for the years 2003 through 2006, respectively.

To supply its retail contracts, Strategic Energy purchases blocks of electricity
under forward contracts to purchase fixed quantities at fixed prices from power
suppliers based on projected peak demand under one to five year contracts. When
Strategic Energy has excess supply in the on-peak period, the excess is sold in
the wholesale market. The savings generated by the sale of excess supply of
on-peak electricity is used to reduce the cost of providing energy to Strategic
Energy's retail customers and is recorded as a reduction of purchased power.

At September 30, 2002, Strategic Energy had entered into forward contracts with
multiple suppliers. Should the supplier default and not deliver, Strategic
Energy would be exposed to market fluctuations, and possible losses to the
extent that the then current market price was higher than the fixed forward
contract price. Strategic Energy monitors this risk by evaluating the credit
quality and performance of its suppliers on a routine basis as part of its risk
management policy and practices. At September 30, 2002, Strategic Energy's five
largest suppliers under forward supply contracts represented 77% of the total
future committed purchases. Based on current wholesale electricity market
prices, management believes that replacement power could be obtained without a
significant impact on Strategic Energy's results of operations in the event of a
default by a major supplier.

Strategic Energy maintains a commodity-price risk management strategy that uses
forward physical energy purchases and derivative instruments to minimize
significant, unanticipated earnings fluctuations caused by commodity-price
volatility. As a result of supplying electricity to retail customers under fixed
rate contracts, Strategic Energy's policy is to match customers' demand with
fixed price purchases. In certain markets where Strategic Energy operates,
entering into forward fixed price contracts is cost prohibitive. By entering
into swap contracts for a portion of its forecasted purchases in these markets,
the future purchase price of electricity is effectively fixed under these swap
contracts. The swap contracts limit the unfavorable effect that price increases
will have on electricity purchases. Under SFAS No. 133, the majority of the swap
agreements are designated as cash flow hedges resulting in the difference
between the market value of energy and the hedge value being recorded as
comprehensive income (loss). At September 30, 2002, the accumulated
comprehensive loss, net of income taxes and minority interest, reflected in
Great Plains Energy's consolidated statement of capitalization included a $4.5
million loss related to such cash flow hedges. However, substantially all of the
energy hedged with the swaps has been sold to customers through contracts at
prices different than the fair market value used to value the swaps. Therefore,
Strategic Energy does not anticipate incurring the losses represented in
comprehensive income.

During the third quarter of 2002, FERC issued a Notice of Proposed Rulemaking to
Remedy Undue Discrimination through Open Access Transmission Service and
Standard Electricity Market Design. The proposed rulemaking is designed to
establish a single non-discriminatory open access transmission tariff with a
single transmission service that is applicable to all users of the interstate
transmission grid. All public utilities that own, control or operate interstate
transmission facilities would be required to become an independent transmission
provider, turn over the operation of their transmission facilities to an RTO
that meets the definition of an independent transmission provider or contract
with an entity that meets the definition of an independent transmission
provider. Strategic


                                       45



Energy is in the process of evaluating the impact of the proposed rulemaking on
its operations and providing comments on the proposed rulemaking to FERC.

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
                                        2002          2001              2002          2001
                                                            (millions)
                                                                        
Operating revenues                    $ 233.1       $ 137.0           $ 580.7       $ 283.0
Purchased power                        (205.4)       (109.4)           (506.3)       (218.5)
Revenues, net of
    purchased power                      27.7          27.6              74.4          64.5
Other operating expenses                (10.8)         (6.7)            (26.0)        (29.8)
Depreciation                             (0.2)         (0.1)             (0.6)         (0.2)
  Operating income                       16.7          20.8              47.8          34.5
Non-operating income (expenses)          (2.7)         (3.7)             (7.9)         (4.9)
Interest charges                         (0.1)            -              (0.3)         (0.1)
Income taxes                             (7.2)         (7.1)            (17.8)        (12.2)
Net income                            $   6.7       $  10.0           $  21.8       $  17.3


Strategic Energy's net income increased $6.0 million for the three months ended
and $19.0 million year to date September 30, 2002, compared to the same periods
of 2001, excluding earnings during the three months ended and year to date
September 30, 2001, of $9.3 million and $14.5 million, respectively, resulting
from the sale of power purchased from one supplier under wholesale contracts
that expired at the end of 2001. The increased net income for the three months
ended and year to date is primarily due to continued growth in retail electric
sales from the expansion into new markets and continued sales efforts, partially
offset by increased labor and benefits as well as other general and
administrative expenses.

Strategic Energy Operating Revenues
Operating revenues from Strategic Energy increased $96.1 million for the three
months ended and $297.7 million year to date September 30, 2002, compared to the
same periods of 2001. The following table reflects the operating revenues of
Strategic Energy for the three months ended and year to date September 30, 2002
and 2001.




                                  Three Months Ended                          Year to Date
                                     September 30          %                  September 30          %
                                  2002          2001     Change             2002          2001    Change
                                      (millions)                                (millions)
                                                                                  
Electric - Retail               $ 225.1       $ 101.6     122 %           $ 558.2       $ 194.8     187 %
Electric - Wholesale                7.7          35.3     (78)%              21.6          72.6     (70)%
Gas and other                       0.3           0.1     200 %               0.9          15.6     (94)%
Total Operating Revenues        $ 233.1       $ 137.0      70 %           $ 580.7       $ 283.0     105 %


Strategic Energy currently serves approximately 29,100 commercial and small
manufacturing accounts, compared to about 15,000 accounts at September 30, 2001.
Strategic Energy added approximately 1,600 accounts during the third quarter of
2002 for a total of approximately 9,600 accounts added since the beginning of
2002.


                                       46



Retail electric revenues increased $123.5 million for the three months ended
September 30, 2002, compared to the same period of 2001, primarily due to an
increase in retail mwh sales, partially offset by a decrease in average retail
revenues per mwh. Retail mwh's sold increased 155% to 3,386,750 for the three
months ended September 30, 2002, compared to the same period in 2001. Several
factors contributed to the decrease in the average retail revenues per mwh,
including, the mix in the underlying price of the commodity, the nature and type
of products offered and the markets participated in. Retail electric revenues
increased $363.4 million year to date September 30, 2002, compared to the same
period of 2001, primarily due to a 194% increase in retail mwh sales to
8,566,975.

Wholesale electric revenues decreased $27.6 million for the three months ended
and $51.0 million year to date September 30, 2002, compared to the same periods
of 2001. The decline in wholesale electric revenues was primarily due to large
block sales of power during 2001 purchased from one supplier under very
favorable wholesale contracts that expired at the end of 2001.

Strategic Energy provides periodic billing credits to its customers resulting
from favorable experience in its power supply coordination efforts. The amounts
credited back to the customer are treated as a reduction of electricity energy
sales when determined to be payable.

During the third quarter of 2001, Strategic Energy began to phase out its
natural gas retail supply service, which was completely phased out during the
fourth quarter of 2001. This is the primary reason for the decrease in gas and
other sales revenues for year to date September 30, 2002, compared to the same
period of 2001.

Strategic Energy Purchased Power
Purchased power increased $96.0 million for the three months ended and $287.8
million year to date September 30, 2002, compared to the same periods of 2001,
primarily due to the increase in electric sales as discussed above, partially
offset by a decrease in the average cost per mwh purchased for retail sales.
Purchased power expense as a percentage of electric sales revenue increased for
both the three months ended and year to date September 30, 2002, compared to the
same periods of 2001, primarily due to purchases of power from one supplier
during 2001 under very favorable wholesale contracts that expired at the end of
2001.

Strategic Energy Other Operating Expenses
Strategic Energy has experienced increased labor and benefits as well as other
general and administrative expenses during 2002, following the growth in retail
electric sales, expansion into new markets and increased fuel management and
consulting activities. As a result, other operating expenses increased $4.1
million for the three months ended September 30, 2002, compared to the same
period of 2001. Other operating expenses year to date September 30, 2001,
include the cost of commercial gas sales of about $14.9 million, from Strategic
Energy's natural gas retail supply service which was phased out by the end of
2001. As a result, year to date September 30, 2002, other operating expenses
decreased $3.8 million, compared to the same period of 2001. Other operating
expenses (excluding the cost of commercial gas sales) increased $11.1 million
year to date September 30, 2002, compared to the same period of 2001, primarily
due to increased labor and benefits as well as other general and administrative
expenses during 2002, as discussed above.

Strategic Energy Non-operating Income (Expenses)
Non-operating income (expenses) includes non-operating income less minority
interest expense and non-operating expenses. For the three months ended
September 30, 2002, compared to the same period of 2001, non-operating income
(expenses) decreased $1.0 million primarily due to a decrease in minority
interest expense, which represents the share of Strategic Energy's net income
not attributable to KLT Energy Services' indirect ownership interest in
Strategic Energy. Non-operating income (expenses) increased $3.0 million year to
date September 30, 2002, compared to the same period of


                                       47



2001, primarily due to a gain of $1.4 million recognized on the sale of gas
contracts during the second quarter of 2001 and an increase year to date
September 30, 2002, of $1.9 million in minority interest expense.

KLT Gas

KLT Gas Business Overview
KLT Gas' business strategy is to acquire and develop early stage coalbed methane
properties. KLT Gas believes that coalbed methane production provides an
economically attractive alternative source of supply to meet the growing demand
for natural gas in North America. KLT Gas has built a knowledge base in coalbed
methane production and reserves evaluation. Therefore, KLT Gas focuses on
coalbed methane - a niche in the natural gas industry where it believes its
expertise provides a competitive advantage. Because it has a longer, predictable
reserve life and lower development cost, management believes coalbed methane is
inherently lower risk than conventional gas exploration.

Although gas prices have been volatile recently, KLT Gas continues to believe
that the long-term future price scenarios for natural gas appear strong.
Environmental concerns and the increased demand for natural gas for new electric
generating capacity are contributing to this projected growth in demand.

KLT Gas' properties are located in Colorado, Texas, Wyoming, Kansas, and
Nebraska. These leased properties cover approximately 254,000 undeveloped acres.
The development of this acreage is in accordance with KLT Gas' exploration plan
and capital budget. KLT Gas has revised its capital expenditure estimates, based
on changes in market conditions to approximately $4 million for the remainder of
2002 and $30 million, $40 million and $34 million for the years 2003 through
2005, respectively. The timing of the development may vary from current plans
based upon obtaining the required environmental and regulatory approvals and
permits and future changes in market conditions. During the third quarter of
2002, KLT Gas began the pilot phase of a new prospect in Colorado and continued
pilot development at a Powder River Basin project and two additional projects in
the Rocky Mountain region. KLT Gas continued production at its South Texas
property.

KLT Gas Results of Operations
The following table summarizes KLT Gas' comparative results of operations.




                                         Three Months Ended                Year to Date
                                            September 30                   September 30
                                        2002          2001              2002          2001
                                                            (millions)
                                                                        
Operating revenues                    $   0.5       $  (0.5)          $   0.6       $   1.4
Other operating expenses                 (2.4)         (2.3)             (7.4)         (8.3)
Depreciation and depletion               (0.3)         (0.4)             (0.7)         (1.4)
Gain (loss) on property                     -           0.6              (0.2)         21.5
  Operating income (loss)                (2.2)         (2.6)             (7.7)         13.2
Income from equity investments              -             -                 -           1.0
Non-operating income                        -           0.2               0.3           0.2
Interest charges                         (0.1)            -              (0.1)            -
Income taxes                              2.6           2.7               7.4          (0.8)
Net income (loss)                     $   0.3       $   0.3           $  (0.1)      $  13.6


KLT Gas is currently developing gas properties following its most recent sale of
property during the second quarter of 2001. Year to date September 30, 2001, net
income included KLT Gas' second


                                       48



quarter 2001 Patrick KLT Gas, LLC, sale which resulted in a $20.1 million before
tax gain ($12.0 million after tax).

KLT Gas Operating Revenues
Operating revenues increased $1.0 million for the three months ended September
30, 2002, compared to the same period of 2001, primarily due to the effect of
gas hedging activities during the third quarter of 2001. Operating revenues
decreased $0.8 million year to date September 30, 2002, compared to the same
period of 2001, primarily due to declining production at KLT Gas' South Texas
property during 2002, partially offset by the effect of gas hedging activities
during 2001.

KLT Gas Income Taxes
KLT Gas recorded tax credits related to its investment in natural gas properties
of $1.3 million and $4.1 million for the three months ended and year to date
September 30, 2002, respectively, compared to $1.7 million and $5.1 million for
the three months ended and year to date September 30, 2001, respectively. The
law that allows these credits will expire at the end of 2002 unless extended by
legislation.

Other Non Regulated Activities

Investments in Affordable Housing Limited Partnerships - KLT Investments
At September 30, 2002, KLT Investments had $69.6 million in affordable housing
limited partnerships. About 66% of these investments were recorded at cost; the
equity method was used for the remainder. Tax expense is reduced in the year tax
credits are generated. The investments generate future cash flows from tax
credits and tax losses of the partnerships. The investments also generate cash
flows from the sales of the properties. For most investments, tax credits are
received over ten years. KLT Investments projects tax credits to run through
2008. A change in accounting principle relating to investments made after May
19, 1995, requires the use of the equity method when a company owns more than 5%
in a limited partnership investment. Of the investments recorded at cost, $44.2
million exceed this 5% level but were made before May 19, 1995. KLT Investments'
management does not anticipate making additional investments in affordable
housing limited partnerships at this time.

On a quarterly basis, KLT Investments compares the cost of those properties
accounted for by the cost method to the total of projected residual value of the
properties and remaining tax credits to be received. Estimated residual values
are based on studies performed by an independent firm. Based on the latest
comparison, KLT Investments reduced its investments in affordable housing
limited partnerships by $1.8 million in the three months ended September 30,
2002, bringing the year to date reductions to $8.9 million. KLT Investments
estimates that additional reductions in affordable housing investments,
primarily as a result of ongoing utilization of tax credits, will be minimal for
the remainder of 2002. Projected annual reductions of the carrying value for the
years 2003 through 2006 total $14 million, $6 million, $7 million and $6
million, respectively. Even after these reductions, earnings from affordable
housing are expected to be positive for the next five years.

These projections are based on the latest information available but the ultimate
amount and timing of actual reductions made could be significantly different
from the above estimates.

KLT Investments accrued tax credits related to its investments in affordable
housing limited partnerships of $4.7 million and $14.3 million for the three
months ended and year to date September 30, 2002, respectively, compared to $4.8
million and $14.4 million for the three months ended and year to date September
30, 2001, respectively.


                                       49



DTI Bankruptcy Update
On December 31, 2001, a subsidiary of KLT Telecom, DTI filed voluntary petitions
for bankruptcy. DTI's reorganization under Chapter 11 of the U.S. Bankruptcy
Code continues in process. Timing of completion of the bankruptcy process has
yet to be determined. During the first quarter of 2002, the bankruptcy court
approved $5 million DIP financing to be provided by KLT Telecom. As of September
30, 2002, none of the DIP financing has been borrowed by DTI. As a result of
DTI's filing for bankruptcy protection and KLT Telecom's ensuing loss of
control, KLT Telecom has not included in its results for the three months ended
and year to date September 30, 2002, the ongoing earnings or loss incurred by
DTI. KLT Telecom's results for the three months ended September 30, 2001,
reflected DTI losses of $10.1 million and its results year to date September 30,
2001, reflected DTI losses of $24.0 million, excluding the early extinguishment
of debt.

Other Consolidated Discussion

Significant Balance Sheet Changes
    (September 30, 2002 compared to December 31, 2001)
o   Great Plains Energy's receivables increased $81.9 million primarily due
    to a $62.2 million increase in Strategic Energy's receivables as a
    result of the strong growth in its power supply coordination services
    and a $30.1 million increase in consolidated KCP&L's receivables.
    Consolidated KCP&L's receivables increased primarily due to a $25.5
    million increase in KCP&L's receivables resulting from the seasonal
    nature of the utility business.
o   Great Plains Energy's affordable housing limited partnerships decreased
    $11.5 million primarily due to a reduction in the valuation of the
    properties held by KLT Investments, Inc.
o   Great Plains Energy's and consolidated KCP&L's regulatory assets
    increased $15.3 million primarily due to deferral of $20.1 million of
    the January ice storm costs applicable to KCP&L's Missouri customers
    partially offset by scheduled amortization of the assets.
o   Great Plains Energy's notes payable increased $21.2 million due to
    increased borrowings by Great Plains Energy of $18.0 million on its
    short-term credit facility for the KCP&L equity infusion and general
    corporate purposes and a $3.2 million increase in consolidated KCP&L's
    notes payable. Consolidated KCP&L's notes payable increased due to
    additional borrowing by RSAE on its short-term credit facility for
    general corporate purposes.
o   Great Plains Energy's and consolidated KCP&L's commercial paper
    decreased $32.4 million primarily due to KCP&L paying down commercial
    paper with cash flow from operations.
o   Great Plains Energy's current maturities of long-term debt decreased
    $209.4 million primarily due to a $207.1 million decrease in
    consolidated KCP&L's current maturities of long-term debt. Consolidated
    KCP&L's decrease is primarily due to refinancing $200.0 million of
    maturing KCP&L medium-term notes with the issuance of KCP&L unsecured
    senior notes and a $27.0 million decrease due to KCP&L retiring
    medium-term notes partially offset by a $20.0 million increase in the
    current portion of KCP&L's medium-term notes.
o   Great Plains Energy's and consolidated KCP&L's EIRR bonds classified as
    current decreased $146.5 million due to the remarketing of the series
    1998 A, B and D bonds for a five-year period ending October 1, 2007.
o   Great Plains Energy's accounts payable decreased $3.0 million primarily
    due to a $47.5 million increase in Strategic Energy's accounts payable
    as a result of the strong growth in its power supply coordination
    services, mostly offset by a $44.4 million decrease in consolidated
    KCP&L's accounts payable and a $5.8 million decrease in KLT Gas'
    accounts payable. Consolidated KCP&L's accounts payable decreased
    primarily due to the timing of KCP&L's cash payments.
o   Great Plains Energy's combined accrued taxes and current income tax
    increased $57.8 million to a liability of $41.1 million primarily due
    to a $62.8 million increase in consolidated KCP&L's accrued income tax.
    Consolidated KCP&L's accrued income tax increase primarily due to a


                                       50



    $41.8 million increase in accrued income tax and a $22.5 million
    increase in property taxes due to the timing of tax payments.

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 from its subsidiaries or proceeds from the sale of its
securities.

Great Plains Energy's liquid resources at September 30, 2002, included cash
flows from operations of subsidiaries and $209.4 million of unused bank lines of
credit. The unused lines consisted of $96.4 million from KCP&L's short-term bank
lines of credit, $30.0 million from Strategic Energy's bank line of credit, and
$83.0 million from Great Plains Energy's revolving credit facilities.

During the first quarter of 2002, Great Plains Energy terminated its $129
million bridge revolving credit facility and replaced it with a $205 million
364-day revolving credit facility syndicated with a group of banks. The
revolving credit facility contains a Material Adverse Change (MAC) clause that
requires Great Plains Energy to represent, prior to receiving any funding, that
no MAC has occurred. Great Plains Energy's available liquidity under this
facility is not impacted by a decline in credit ratings unless the downgrade
occurs in the context of a merger, consolidation or sale.

During the second quarter of 2002, Great Plains Energy entered into a $20
million 364-day revolving credit facility with a bank. The revolving credit
facility does not contain a MAC clause. Great Plains Energy's available
liquidity under this facility is not impacted by a decline in credit ratings
unless the downgrade occurs in the context of a merger, consolidation or sale.

During the third quarter of 2002, Strategic Energy increased its bank line of
credit to $30 million from $10 million. The line of credit contains a MAC
clause. This agreement requires Strategic Energy to represent, prior to
receiving any funding, that no MAC has occurred.

KCP&L's primary sources of liquidity are cash flows from operations and
bilateral credit lines totaling $126.0 million with six banks (as of September
30, 2002). KCP&L uses these lines to provide support for its issuance of
commercial paper, $29.6 million of which was outstanding at September 30, 2002.
During October 2002, KCP&L repaid the $29.6 million. These bank facilities are
each for a 364-day term and mature at various times throughout the year. KCP&L
has MAC clauses in two agreements covering $50.0 million of available bilateral
credit lines. These two agreements require KCP&L to represent, prior to
receiving any funding, that no MAC has occurred. KCP&L's available liquidity
under these facilities is not impacted by a decline in credit ratings unless the
downgrade occurs in the context of a merger, consolidation or sale.

Great Plains Energy has agreements with KLT Investments Inc., a wholly owned
subsidiary of KLT Inc., associated with notes KLT Investments Inc. issued to
acquire its affordable housing investments. Prior to forming Great Plains
Energy, KCP&L had these agreements. Great Plains Energy agreed not to take
certain actions including, but not limited to, merging, dissolving or causing
the dissolution of KLT Investments Inc., or withdrawing amounts from KLT
Investments Inc. if the withdrawals would result in KLT Investments Inc. to not
be in compliance with minimum net worth and cash balance requirements. The
amendment also gives KLT Investments Inc.'s lenders the right to have KLT
Investments Inc. repurchase the notes if Great Plains Energy's senior debt
rating falls below investment grade, or if Great Plains Energy ceases to own at
least 80% of KCP&L's stock. At September 30, 2002, KLT Investments Inc. had
$20.3 million in outstanding notes, including current maturities.

Pursuant to agreements with the MPSC and the KCC, KCP&L maintains its common
equity at not less


                                       51



than 35 percent of total capitalization. Additionally, Great Plains Energy
maintains its consolidated common equity at no less than 30 percent of total
consolidated capitalization.

Great Plains Energy's consolidated statements of cash flows include consolidated
KCP&L, KLT Inc. and GPP. KCP&L's consolidated statements of cash flows include
its wholly owned subsidiary HSS. In addition, KCP&L's consolidated statements of
cash flows include KLT Inc. and GPP for all the periods prior to the October 1,
2001 formation of the holding company. The presentation of the prior year
statement of cash flows for Great Plains Energy is provided for comparative
purposes and is identical to the statement of cash flows for consolidated KCP&L,
prior to the formation of the holding company.

Great Plains Energy and consolidated KCP&L generated positive cash flows from
operating activities year to date September 30, 2002. The increase for Great
Plains Energy and consolidated KCP&L over the same period of 2001 is
attributable to changes in working capital detailed in Note 3 to the
consolidated financial statements. The individual components of working capital
vary with normal business cycles and operations. Also, the timing of the Wolf
Creek outage affects the refueling outage accrual, deferred income taxes and
amortization of nuclear fuel.

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. Year to date September 30, 2002, utility capital expenditures
decreased $55.0 million and allowance for borrowed funds used during
construction decreased $7.7 million, compared to 2001, primarily due to the 2001
completion of the rebuild of Hawthorn No. 5. The decrease was partially offset
by $14.7 million of capital expenditures as a result of the January 2002 ice
storm. Cash used for purchases of investments and nonutility property year to
date September 30, 2002, compared to the same period of 2001, decreased
primarily reflecting KLT Telecom's 2001 investments in DTI and DTI's 2001
purchases of telecommunications property.

Cash from Great Plains Energy and consolidated KCP&L financing activities
decreased year to date September 30, 2002, compared to the same period of 2001,
primarily because of the net changes in short-term borrowings. Additionally,
long-term debt issuances, net of repayments decreased $49.5 million for Great
Plains Energy and $38.7 million for consolidated KCP&L. These decreases reflect
decreased investing activities in utility capital expenditures, nonutility
property and investments discussed above.

KCP&L expects to meet day-to-day operating requirements including interest
payments, construction requirements (excluding new generating capacity) and
dividends with internally-generated funds. However, it might 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 future environmental regulations and the availability of
generating units. The funds needed to retire the $394.8 million of Great Plains
Energy's maturing long-term debt through the year 2006, which includes $375.5
million of consolidated KCP&L's maturing long-term debt, are expected to 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.

In March 2002, KCP&L issued $225 million of 6.0% unsecured senior notes,
maturing in 2007, through a private placement. The proceeds from the issuance
were primarily used to refinance maturing unsecured medium-term notes. KCP&L,
pursuant to its obligations under a registration rights agreement entered into
in connection with the private placement, filed an S-4 registration statement
offering to exchange up to $225 million of 6.0% unsecured senior notes, maturing
in 2007, registered under the Securities Act for the $225 million privately
placed notes. The registration statement became effective during the third
quarter. All of the privately place notes were exchanged.


                                       52



Great Plains Energy filed an S-3 registration statement for the issuance of an
aggregate amount up to $300 million of any combination of senior debt
securities, subordinated debt securities, trust preferred securities,
convertible securities, or common stock. The registration statement became
effective in November 2002. Great Plains Energy expects to issue additional
common equity. However, the timing and amount of this transaction are dependent
on a number of factors, including overall and sector-specific equity market
conditions.

KCP&L maintains defined benefit pension plans. Under the terms of its pension
plans, KCP&L reserves the right to amend or terminate the plans and, from time
to time benefits have changed. Our policy is to fund amounts on an actuarial
basis to provide assets sufficient to meet benefits to be paid to plan
participants consistent with the funding requirements of ERISA. No contributions
to the plans were necessary in 2002 or 2001.

Due to sharp declines in the debt and equity markets since the third quarter of
2000, the value of assets held in the trusts to satisfy the obligations of
pension plans has decreased significantly. As a result, under minimum funding
requirements of ERISA, we may be required to fund additional amounts to the plan
trusts in future years. KCP&L will be required to fund approximately $7 million
in 2003 based on funding requirements for the 2001-2002 plan year.

Participants in the plan may request a lump-sum cash payment upon the
termination of their employment, which may result in increased cash requirements
from pension plan assets. KCP&L may be required to accelerate future funding to
the pension plans as a result of these increased cash requirements.

Supplemental Capital Requirements and Liquidity Information Update
Great Plains Energy's other long-term contractual cash obligations, net, have
increased approximately 35% since December 31, 2001. The increase is primarily
for new Strategic Energy purchased power contracts in the years 2003 through
2006 supporting the growth in their power supply coordination services.

As part of normal 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.

FASB issued an exposure draft of a proposed interpretation, Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others, during the second quarter of 2002. The
final interpretation is expected to be issued in the fourth quarter of 2002 and
take effect beginning January 1, 2003. For guarantees issued after December 31,
2002, the interpretation would require the Company to record a liability for the
fair value of the obligation it has undertaken in issuing the guarantees.
Additionally, specific disclosures about obligations under guarantees would be
required. Until the final interpretation is issued, the Company cannot complete
the quantification of the effects of the interpretation on the Company's
financial condition and results of operation.

The Company's guarantees in total are $257.7 million at September 30, 2002,
relatively unchanged from December 31, 2001. However, year to date 2002,
approximately $142.4 million of KLT Inc.'s guarantees related to Strategic
Energy have been replaced by Great Plains Energy guarantees. There was also an
increase to $25 million from $22 million at December 31, 2001, in RSAE's line of
credit with


                                       53



a commercial bank, which Great Plains Energy supports through an agreement that
ensures adequate capital to operate.

Environmental Matters
The Company's operations comply with federal, state and local environmental laws
and regulations. The generation and transmission of electricity produces and
requires disposal of certain products and by-products, including PCBs, asbestos
and other hazardous materials. The Superfund law imposes strict joint and
several liability for those who generate, transport or deposit hazardous waste.
In addition, the current owner of contaminated property, as well as prior owners
since the time of contamination, may be liable for cleanup costs.

Environmental audits are conducted to detect contamination and ensure compliance
with governmental regulations. However, compliance programs need to meet new and
future environmental laws, as well as regulations governing water and air
quality, including carbon dioxide emissions, nitrogen oxide emissions, hazardous
waste handling and disposal, toxic substances and the effects of electromagnetic
fields. Therefore, compliance programs could require substantial changes to
operations or facilities (see Note 7 to the consolidated financial statements).

Critical Accounting Policies Update
KCP&L is regulated and follows SFAS No. 71, "Accounting for Certain Types of
Regulation", which applies to regulated entities with rates that are designed to
recover the costs of providing service. Accordingly, KCP&L defers on the balance
sheet items when allowed by a commission's rate order or when it is probable,
based on regulatory past practices, that future rates will recover the
amortization of the deferred costs. If SFAS No. 71 were not applicable,
regulatory assets would be written off. At September 30, 2002, KCP&L had $139.7
million of unamortized regulatory assets including storm costs discussed below.

Effective August 2002, the MPSC approved KCP&L's application for an accounting
authority order related to the Missouri jurisdictional portion of the storm
costs. The order allows KCP&L to defer and amortize $20.1 million, representing
the Missouri impact of the storm, through January 2007. The amortization began
in September 2002 and is expected to be approximately $1.5 million in 2002 and
approximately $4.6 million annually for the remainder of the amortization
period.

The Company adopted SFAS No. 142 on January 1, 2002. Under the new standard,
goodwill is no longer amortized, but rather is tested for impairment upon
adoption and at least annually thereafter. The annual test may be performed
anytime during the year, but must be performed at the same time each year. Any
future impairment of goodwill would be reflected in continuing operations.

Strategic Energy's initial valuation has been completed and there was no
impairment of the $14 million of goodwill. In accordance with SFAS No. 142, the
Company completed its initial impairment test of RSAE during the second quarter
of 2002 and recorded a $3.0 million write-down of goodwill. The goodwill
write-down is reflected as a cumulative effect to January 1, 2002, of a change
in accounting principle. As a result, year to date September 30, 2002, Great
Plains Energy net income reflects the $3.0 million cumulative effect to January
1, 2002, of a change in accounting principle. Ongoing annual impairment tests
are required by SFAS No. 142. RSAE and Strategic Energy completed this test in
September and no additional write-down was necessary. At September 30, 2002,
RSAE had $20 million of unamortized goodwill.

In the third quarter, the U.S. District Court Judge presiding over the Central
Interstate Compact Commission's federal "bad faith" lawsuit against the State of
Nebraska issued his decision in the case finding clear evidence that the State
of Nebraska acted in bad faith in processing the license application for a
low-level radioactive waste disposal site in Nebraska. He rendered a judgment in
the amount of


                                       54



$151.4 million against the state. The state has appealed this decision. Based on
the favorable outcome of this trial, in KCP&L's opinion, there is a greater
possibility of reversing the state's license denial once the decision in this
case is final. KCP&L's investment in the Central States Compact at September 30,
2002, was $7.4 million.

KCP&L's reported costs of providing non-contributory defined pension benefits
are dependent upon numerous factors resulting from actual plan experience and
assumptions of future experience.

Pension costs, are impacted by actual employee demographics (including age,
compensation levels, and employment periods), the level of contributions made to
the plan, earnings on plan assets and plan amendments. In addition, pension
costs may also be significantly affected by changes in key actuarial
assumptions, including anticipated rates of return on plan assets and the
discount rates used in determining the projected benefit obligation and pensions
costs. In the 2002 actuarial valuation currently in process, the Company expects
to decrease its discount rate from 7.25% in 2001 to 6.75% in 2002, and
anticipates the assumed long term return on plan assets will remain unchanged at
9.0%.

In accordance with SFAS No. 87, Employers' Accounting for Pensions, changes in
pension obligations associated with these factors may not be immediately
recognized as pension costs on the income statement, but generally gains and
losses are recognized by KCP&L by amortizing over a five-year period the rolling
five-year average of unamortized gains and losses. Year to date September 30,
2002, KCP&L recorded non-cash expense of approximately $3.9 million and recorded
non-cash income of $8.4 million year to date September 30, 2001. The recorded
non-cash annual expense for 2003 is expected to be approximately $19 million.

KCP&L's pension plan assets are primarily made up of equity and fixed income
investments. Fluctuations in actual equity market returns as well as changes in
general interest rates may result in increased or decreased pension costs in
future periods. The market value of the Company's plan assets has been affected
by sharp declines in equity markets since the third quarter of 2000. During
2001, plan assets lost value of approximately $112 million. The plan continued
to experience losses in 2002, with losses through September 30, 2002, totaling
approximately $32 million. As a result of our plan asset return experience, at
December 31, 2002, the Company could be required to increase the additional
minimum liability as prescribed by SFAS No. 87. The liability would be recorded
as a reduction to common equity through a charge to OCI, and would not affect
net income for 2002. Excluding the WCNOC pension plan (plan year ends November
30), the Company anticipates a charge to OCI in the fourth quarter of 2002 of
approximately $26 million. The OCI would be restored through common equity in
future periods to the extent the fair value of trust assets exceeds the
accumulated benefit obligation adjusted for the prepaid (accrued) benefit costs.


                                       55



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, operational and credit risks and are not represented in the
following analysis.

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,
interim period disclosures should be read in connection with the quantitative
and qualitative disclosures about market risk included in our 2001 combined
annual report on Form 10-K. There have been no material changes in Great Plains
Energy's or consolidated KCP&L's market risk since December 31, 2001.


ITEM 4.  CONTROLS AND PROCEDURES

The chief executive officer and the chief financial officer of Great Plains
Energy and KCP&L have evaluated those companies' disclosure controls and
procedures within 90 days of the filing of this quarterly report. Based on this
evaluation, the chief executive officer and chief financial officer have
concluded that the disclosure controls and procedures of those companies are
functioning effectively to provide reasonable assurance that the information
required to be disclosed by those companies in the reports that they file or
submit under the Securities Exchange Act of 1934, as amended, is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms.

There have been no significant changes to Great Plains Energy's or KCP&L's
internal controls or in other factors that could significantly affect these
controls subsequent to the date of the evaluation.


                                       56



PART II - OTHER INFORMATION

ITEM 3.  OTHER LEGAL PROCEEDINGS

DTI Chapter 11 Reorganization Proceedings.

Pending in the United States Bankruptcy Court for the Eastern District of
Missouri (Bankruptcy Court) is the bankruptcy reorganization proceedings filed
on December 31, 2001, by DTI and its Virginia subsidiary in Case Nos.
01-54369-399, 01-54370-399 and 01-54371-399. These proceedings have been
consolidated for joint procedural administration. DTI is continuing to conduct
its business operations while it restructures its financial obligations. KLT
Telecom Inc. is a creditor in the proceedings. Timing of completion of the
bankruptcy process has yet to be determined. During the first quarter of 2002,
the bankruptcy court approved $5 million in DIP financing to be provided by KLT
Telecom. As of September 30, 2002, none of the DIP financing has been borrowed
by DTI.

Consistent with the fiduciary obligation of the creditors' committee to
investigate potential sources of recovery for the DTI bankruptcy estate, the
creditors' committee served a request for the production of documents by the
Company and its affiliates relating to the issue of whether DTI should have been
compensated for the use by the Company of its tax losses. The Company believes
that it would have meritorious defenses to any such claim that ultimately might
be asserted by the creditors' committee. Since the legal and factual basis for
any such unasserted claim have not yet been established, the Company is
currently unable to estimate the amount of liability or loss, if any, that might
arise if a claim is asserted.

ITEM 5.  OTHER INFORMATION

Rick Muench, vice president technical services of WCNOC, has been appointed
President and Chief Executive Officer of WCNOC effective January 3, 2003. His
predecessor, Otto Maynard, announced his retirement after 20 years of working at
the Wolf Creek Nuclear Generating Station.

Lori Wright, Assistant Controller of Great Plains Energy and KCP&L, has been
appointed Controller of those companies effective November 15, 2003. Her
predecessor, Neil Roadman, will become a consultant to the companies and retire
in 2003.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

EXHIBITS

         Great Plains Energy Incorporated

Exhibit No.

10.1.a.           Guaranty issued by Great Plains Energy Incorporated in favor
                  of PG&E Trading-Power, L.P., dated July 26, 2002.

12                Computation of Ratios of Earnings to Fixed Charges.


                                       57



99.1.a.           Certification of CEO and CFO Pursuant to 18 U.S.C. Section
                  1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley
                  Act of 2002.

         Kansas City Power & Light Company

Exhibit No.

4.2.a.*           Company Order and Officers' Certificate dated September 5,
                  2002, regarding the issuance of up to $225 million principal
                  amount of 6.00% Senior Notes due 2007, Series B, registered
                  under the Securities Act of 1933 for a like aggregate
                  principal amount of 6.00% Senior Notes due 2007, Series A.
                  (Exhibit 4(a) to Form 8-K dated September 5, 2002)

99.2.a.           Certification of CEO and CFO Pursuant to 18 U.S.C. Section
                  1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley
                  Act of 2002.

*Incorporated by reference and made a part hereof.

REPORTS ON FORM 8-K

         Great Plains Energy Incorporated

      Great Plains Energy Incorporated filed a report on Form 8-K dated
August 12, 2002, including the Statements under Oath of its Principal Executive
Officer and Principal Financial Officer, submitted to the Securities and
Exchange Commission pursuant to Order No. 4-460.

      Great Plains Energy Incorporated filed a report on Form 8-K dated
August 26, 2002, including Great Plains Energy Incorporated's and Kansas City
Power & Light Company's financial statements for the years ended December 31,
2001, 2000 and 1999 with a revised Note 9, "Segment and Related Information",
containing reformatted segment information reflecting a revision in corporate
business strategy.


                                       58



         Kansas City Power & Light Company

      Kansas City Power & Light Company filed a report on Form 8-K dated
August 26, 2002, including Great Plains Energy Incorporated's and Kansas City
Power & Light Company's financial statements for the years ended December 31,
2001, 2000 and 1999 with a revised Note 9, "Segment and Related Information",
containing reformatted segment information reflecting a revision in corporate
business strategy.

      Kansas City Power & Light Company filed a report on Form 8-K dated
September 5, 2002, regarding the commencement of an offer to exchange up to $225
million principal amount of 6.00% Senior Notes due 2007, Series B registered
under the Securities Act of 1933 for a like aggregate principal amount of 6.00%
Senior Notes due 2007, Series A, and including a Company Order and Officers'
Certificate respecting the Series B notes to be exchanged upon consummation of
the exchange offer.


                                       59





                                   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 13, 2002               By:  /s/Bernard J. Beaudoin
                                        (Bernard J. Beaudoin)
                                        (Chief Executive Officer)

Dated:  November 13, 2002               By:  /s/Neil Roadman
                                        (Neil Roadman)
                                        (Principal Accounting Officer)


                        KANSAS CITY POWER & LIGHT COMPANY

Dated:  November 13, 2002               By:  /s/Bernard J. Beaudoin
                                        (Bernard J. Beaudoin)
                                        (Chief Executive Officer)

Dated:  November 13, 2002               By:  /s/Neil Roadman
                                        (Neil Roadman)
                                        (Principal Accounting Officer)


                                       60




                                  CERTIFICATION

I, Bernard J. Beaudoin, certify that:

1.       I have reviewed this quarterly report on Form 10-Q of Great Plains
         Energy Incorporated;

2.       Based on my knowledge, this quarterly report does not contain any
         untrue statement of a material fact or omit to state a material fact
         necessary to make the statements made, in light of the circumstances
         under which such statements were made, not misleading with respect to
         the period covered by this quarterly report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this quarterly report, fairly present in all
         material respects the financial condition, results of operations and
         cash flows of the registrant as of, and for, the periods presented in
         this quarterly report;

4.       The registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         have:

         a)   designed such disclosure controls and procedures to ensure that
              material information relating to the registrant, including its
              consolidated subsidiaries, is made known to us by others within
              those entities, particularly during the period in which this
              quarterly report is being prepared;

         b)   evaluated the effectiveness of the registrant's disclosure
              controls and procedures as of a date within 90 days prior to the
              filing date of this quarterly report (the "Evaluation Date"); and

         c)   presented in this quarterly report our conclusions about the
              effectiveness of the disclosure controls and procedures based on
              our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of registrant's board of directors (or persons
         performing the equivalent functions):

         a)   all significant deficiencies in the design or operation of
              internal controls which could adversely affect the registrant's
              ability to record, process, summarize and report financial data
              and have identified for the registrant's auditors any material
              weaknesses in internal controls; and

         b)   any fraud, whether or not material, that involves management or
              other employees who have a significant role in the registrant's
              internal controls; and

6.       The registrant's other certifying officers and I have indicated in this
         quarterly report whether there were significant changes in internal
         controls or in other factors that could significantly affect internal
         controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.

Date: November 13, 2002

                                                By: /s/Bernard J. Beaudoin
                                                Bernard J. Beaudoin
                                                Chairman of the Board, President
                                                and Chief Executive Officer


                                       61



                                  CERTIFICATION

I, Andrea F. Bielsker, certify that:

1.       I have reviewed this quarterly report on Form 10-Q of Great Plains
         Energy Incorporated;

2.       Based on my knowledge, this quarterly report does not contain any
         untrue statement of a material fact or omit to state a material fact
         necessary to make the statements made, in light of the circumstances
         under which such statements were made, not misleading with respect to
         the period covered by this quarterly report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this quarterly report, fairly present in all
         material respects the financial condition, results of operations and
         cash flows of the registrant as of, and for, the periods presented in
         this quarterly report;

4.       The registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         have:

         a)   designed such disclosure controls and procedures to ensure that
              material information relating to the registrant, including its
              consolidated subsidiaries, is made known to us by others within
              those entities, particularly during the period in which this
              quarterly report is being prepared;

         b)   evaluated the effectiveness of the registrant's disclosure
              controls and procedures as of a date within 90 days prior to the
              filing date of this quarterly report (the "Evaluation Date"); and

         c)   presented in this quarterly report our conclusions about the
              effectiveness of the disclosure controls and procedures based on
              our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of registrant's board of directors (or persons
         performing the equivalent functions):

         a)   all significant deficiencies in the design or operation of
              internal controls which could adversely affect the registrant's
              ability to record, process, summarize and report financial data
              and have identified for the registrant's auditors any material
              weaknesses in internal controls; and

         b)   any fraud, whether or not material, that involves management or
              other employees who have a significant role in the registrant's
              internal controls; and

6.       The registrant's other certifying officers and I have indicated in this
         quarterly report whether there were significant changes in internal
         controls or in other factors that could significantly affect internal
         controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.

Date: November 13, 2002

                                                   By: /s/Andrea F. Bielsker
                                                   Andrea F. Bielsker
                                                   Senior Vice President -
                                                   Finance, Chief Financial
                                                   Officer and Treasurer


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                                  CERTIFICATION

I, Bernard J. Beaudoin, certify that:

1.       I have reviewed this quarterly report on Form 10-Q of Kansas City Power
         & Light Company;

2.       Based on my knowledge, this quarterly report does not contain any
         untrue statement of a material fact or omit to state a material fact
         necessary to make the statements made, in light of the circumstances
         under which such statements were made, not misleading with respect to
         the period covered by this quarterly report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this quarterly report, fairly present in all
         material respects the financial condition, results of operations and
         cash flows of the registrant as of, and for, the periods presented in
         this quarterly report;

4.       The registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         have:

         a)   designed such disclosure controls and procedures to ensure that
              material information relating to the registrant, including its
              consolidated subsidiaries, is made known to us by others within
              those entities, particularly during the period in which this
              quarterly report is being prepared;

         b)   evaluated the effectiveness of the registrant's disclosure
              controls and procedures as of a date within 90 days prior to the
              filing date of this quarterly report (the "Evaluation Date"); and

         c)   presented in this quarterly report our conclusions about the
              effectiveness of the disclosure controls and procedures based on
              our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of registrant's board of directors (or persons
         performing the equivalent functions):

         a)   all significant deficiencies in the design or operation of
              internal controls which could adversely affect the registrant's
              ability to record, process, summarize and report financial data
              and have identified for the registrant's auditors any material
              weaknesses in internal controls; and

         b)   any fraud, whether or not material, that involves management or
              other employees who have a significant role in the registrant's
              internal controls; and

6.       The registrant's other certifying officers and I have indicated in this
         quarterly report whether there were significant changes in internal
         controls or in other factors that could significantly affect internal
         controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.

Date: November 13, 2002
                                                By: /s/Bernard J. Beaudoin
                                                Bernard J. Beaudoin
                                                Chairman of the Board, President
                                                and Chief Executive Officer


                                       63


                                  CERTIFICATION

I, Andrea F. Bielsker, certify that:

1.       I have reviewed this quarterly report on Form 10-Q of Kansas City Power
         & Light Company;

2.       Based on my knowledge, this quarterly report does not contain any
         untrue statement of a material fact or omit to state a material fact
         necessary to make the statements made, in light of the circumstances
         under which such statements were made, not misleading with respect to
         the period covered by this quarterly report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this quarterly report, fairly present in all
         material respects the financial condition, results of operations and
         cash flows of the registrant as of, and for, the periods presented in
         this quarterly report;

4.       The registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         have:

         a)   designed such disclosure controls and procedures to ensure that
              material information relating to the registrant, including its
              consolidated subsidiaries, is made known to us by others within
              those entities, particularly during the period in which this
              quarterly report is being prepared;

         b)   evaluated the effectiveness of the registrant's disclosure
              controls and procedures as of a date within 90 days prior to the
              filing date of this quarterly report (the "Evaluation Date"); and

         c)   presented in this quarterly report our conclusions about the
              effectiveness of the disclosure controls and procedures based on
              our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of registrant's board of directors (or persons
         performing the equivalent functions):

         a)   all significant deficiencies in the design or operation of
              internal controls which could adversely affect the registrant's
              ability to record, process, summarize and report financial data
              and have identified for the registrant's auditors any material
              weaknesses in internal controls; and

         b)   any fraud, whether or not material, that involves management or
              other employees who have a significant role in the registrant's
              internal controls; and

6.       The registrant's other certifying officers and I have indicated in this
         quarterly report whether there were significant changes in internal
         controls or in other factors that could significantly affect internal
         controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.

Date: November 13, 2002


                                                   By: /s/Andrea F. Bielsker
                                                   Andrea F. Bielsker
                                                   Senior Vice President -
                                                   Finance, Chief Financial
                                                   Officer and Treasurer


                                       64