Kansas City Power & Light and KCP&L Greater Missouri Operations – Suggestions for Chapter 22 Revisions Missouri Public Service Commission Meeting Aug 31, 2009

2 Background The Integrated Resource Plan or IRP is a process defined in 4 CSR Currently we files separate IRPs for both Kansas City Power & Light (“KCP&L”) and KCP&L-Greater Missouri Operations Company (“GMO”). The Companies submitted responses to an August 4 list of Staff questions. These responses detailed our concerns regarding the latest version of the proposed Chapter 22 rule. Our chief concerns are condensed within the following slides. A more complete discussion of our position can be found in EFIS.

3 Commission’s Current Policy Goal— established per the rule in 1993 Set minimum standards to govern the scope and objectives of the resource planning process…to ensure that the public interest is adequately served. Compliance with the rule does not result in commission approval of any plan, strategy, or investment decision. The stated objective is to provide the public with energy services that are safe, reliable and efficient, at just and reasonable rates.

4 Current Fundamental Requirements Minimize present worth of long-run utility costs as the primary selection criteria when choosing the Preferred Resource Plan. Consider and analyze demand side efficiency and energy management measures on an equal basis as supply-side alternatives. Identify and analyze factors which are critical to meeting the fundamental objective of the resource planning process, but which may negatively affect the minimization of long-run utility costs. Those associated with alternative resource plans Those associated with new or more stringent environmental laws or regulations Rate increases associated with alternative resource plans

5 What’s changed since 1993? Nothing Utilities still need to conduct planning to ensure that the public interest is adequately served. Utilities still need to provide the public with energy services that are safe, reliable and efficient, at just and reasonable rates. Utilities still need to minimize long-run utility costs. Utilities still need to include demand side efficiency and energy management measures. Utilities still need to identify risks and be prepared to modify their plans if conditions change.

6 What’s changed since 1993? Everything Technology For planning analysis For energy delivery (Transmission and Distribution) For demand side efficiency and management New markets for electric power and emission products Regional Transmission Organizations (RTO) Environmental Concerns Federal Mandates Renewable Energy Standards Laws Potential Cap and Trade Legislation Risk Financial, generation and environmental requirements

7 What needs to change in the rule? Nothing The current policy—planning processes that ensure that the public interest is adequately served is as valid today as it was in The current objective to provide the public with energy services that are safe, reliable and efficient, at just and reasonable rates is as valid today as it was in 1993.

8 What needs to change in the rule? Everything We need to change the focus from “what we didn’t do” to “the Plan” We need to focus more on the objectives set out in the rule, rather than the reports and deficiencies. We need the IRP to help us mitigate risk associated with large projects We need a mechanism to use our IRP to seek approval to proceed with specific projects. This could be within the IRP, or separate but relying on IRP.

9 What would be the result of these changes? This process could be our strategic planning process. The final report should be an opportunity for Staff and the stakeholders to review our plan The final product would be our resource strategy. Adequately analyze the risks associated with conducting this strategy Provide all stakeholders with information they need to assist in achieving safe, reliable electricity in accordance with applicable law.

10 Current IRP Rule In practice, the current IRP process is a long checklist of items to complete. Many requests for data provide little or no value to the primary objective of the process. Differing interpretations of the rules by various parties can lead to generating deficiencies. Many issues with the current rule are resolved by use of waivers With each utility having recent experience with an IRP filing, most of the waiver process is becoming routine.

11 Proposed IRP Rule The proposed rule has addressed several issues that the utilities have routinely requested waivers The proposed IRP process however lengthens the checklist of tasks to complete. Differing interpretations of the rules by various parties can lead to generating deficiencies. Many new issues are being addressed which have little in common with the primary objective Using the IRP process to conduct analysis in support of other objectives For example, developing plans that assume no renewable resources to support what may become Chapter 20. Compliance with the current applicable law should be sufficient guidance in the planning process.

12 Proposal #1 Commission should write the rule to set goals and high level objectives of each section. Require the companies to develop the best method to achieve those goals. The companies will still be required to submit their findings to stakeholders who are able to comment on how well the companies met these goals. Allows the Commission and Companies to focus on providing high-value information to stakeholders. Commission defines what information is needed, not how a company is to calculate and plot it.

13 Proposal #2 Utilities would submit subject matter to stakeholders in staggered timeframes Timeline example: Utility submits Load Analysis, Supply-Side and Demand-Side Volumes. Within 90 days: Stakeholders meet and discuss submittals Within 90 days after stakeholder meeting: Utility submits Integrated Analysis and Risk and Strategy Selection Volumes. Moves at least a portion of the long process of after- the-fact deficiency discussions up front to potentially resolve (or at least identify) areas of concern among various stakeholders. Puts the spot light on Integrated Analysis, which produces the Preferred Resource Plan

14 Proposal # 3 Conduct periodic stakeholder IRP advisory meetings, at least on an annual basis Purpose of advisory meeting would be to present and review resource planning status, methodologies and assumptions and other issues. Continuation of the three-year formal report filings.