Great Plains Energy Announces First Quarter Financial Results

Business Wire, May 7, 2008

KANSAS CITY, Mo. -- Great Plains Energy Incorporated (NYSE:GXP) today announced first quarter 2008 reported earnings of $47.1 million or $0.55 per share, compared to first quarter 2007 reported earnings of $23.0 million or $0.28 per share. Core earnings, which exclude net mark-to-market gains and losses on energy contracts and other items, were $13.0 million or $0.15 per share for the first quarter 2008, compared to a loss of $11.0 million or $0.13 per share in the first quarter of 2007. Reported earnings are reconciled to core earnings in attachment B.

Compared to 2007, first quarter 2008 core earnings were favorably impacted by new retail rates, favorable weather, increased wholesale revenues and litigation settlement proceeds at Kansas City Power & Light (KCP&L), as well as higher delivered volumes at Strategic Energy. These positive factors were somewhat offset by the impact of higher purchased power expense due to plant outages and increased depreciation and amortization expense at KCP&L.

On April 2, 2008, Great Plains Energy announced the entry into a definitive agreement with Direct Energy Services, LLC ("Direct Energy"), a subsidiary of Centrica plc (LSE: CNA), under which Direct Energy will acquire from Great Plains Energy all of the outstanding ownership interests in Strategic Energy, L.L.C. for $300 million in cash, subject to closing adjustments.

"In the first quarter of 2008, we followed through on our plans to increase our focus on regulated operations by reaching an agreement to sell Strategic Energy," commented Chairman and CEO Mike Chesser. "Also, we are pleased that this quarter represented a marked improvement over last year. We are, however, experiencing challenges in our generation fleet performance and are taking steps to continue to improve plant availability."

Earnings Guidance

Due to the status and timing of the Aquila transaction as well as the pending sale of Strategic Energy, Great Plains Energy is not issuing 2008 guidance or confirming future years' guidance at this time.

BUSINESS SEGMENTS:

Kansas City Power & Light

First quarter 2008 reported earnings were $17.0 million or $0.20 per share compared to $2.1 million or $0.02 per share in first quarter last year. Core earnings at KCP&L were $15.1 million or $0.18 per share for the first quarter 2008 compared to $2.1 million or $0.02 per share in 2007.

Revenues for the first quarter 2008 increased to $297.6 million, a 16 percent increase over first quarter 2007. Retail revenues rose to $248.7 million in first quarter 2008 compared to $216.9 million in 2007 due primarily to new retail rates, favorable weather and increased usage. Wholesale revenues rose to $43.1 million, a 26 percent increase from the 2007 level of $34.2 million. The increase in wholesale revenues was attributable mainly to increased volumes at higher prices.

Partially offsetting the retail and wholesale revenue growth in the first quarter 2008 were the following factors:

* an increase in purchased power expense due to increased purchased power volumes primarily from plant outages and increased prices; and

* higher operating expenses due to increased depreciation and amortization expense.

Iatan Project Update

KCP&L has completed a cost and schedule update for the Iatan 1 environmental project and the Iatan 2 coal plant construction project. This updated assessment was driven by several factors, including (a) the combined projects reaching a milestone of 70% - 75% of the engineering work completed; (b) the integration of the Iatan 2 "Balance of Plant" schedule and quantity estimates from Kiewit Industrial Corporation into the master schedule and budget; and (c) continued challenging construction market trends, including rapidly escalating costs for construction materials and services, the level of global investment in power production facilities, the decline in the value of the U.S. dollar, and constrained labor availability.

KCP&L recently completed the update and key results were as follows:

* Based on the top end of the new estimate ranges, the combined increase in projected costs of the Iatan 1 environmental project and the new Iatan 2 unit is approximately 19 percent.

* Compared to the previous estimate of $837 million - $914 million issued in December 2006, KCP&L's approximate 55 percent share of the total projected cost of Iatan 2 has increased to a range of $994 million - $1.051 billion, with the top end of the range representing a 15 percent increase. Excluding approximately $47 million of certain items not typically included in a cost per kilowatt (kW) calculation, the cost of Iatan 2 is estimated to range from $2,083 / kW to $2,204 / kW.

* The in-service date for Iatan 2 continues to be the summer of 2010.

* KCP&L's 70 percent share of the projected cost of the Iatan 1 environmental project has increased to a range of $330 million - $350 million. This represents an increase of 33 percent compared to the top end of the previous range estimate of $255 million - $264 million for Iatan 1 included in KCP&L's December 2006 projection of Total Environmental Retrofits under its Comprehensive Energy Plan.