Highly Confidential / Proprietary MARC 2010 CONFERENCE Know When to Hold Em and Know When to Fold Em Session By Scott Heidtbrink Senior VP - Supply June 8, 2010

Highly Confidential / Proprietary Our Supply Portfolio

Highly Confidential / Proprietary Projected 2014 GPE Energy Resource Mix  KCP&L relies on coal as a significant fuel source

Highly Confidential / Proprietary Electric Utility Planning ERM Modeling Integrated Resource Plan –Every 3 years –Least cost plan –Preferred plan Execute on plan unless key variables change

Highly Confidential / Proprietary Types of Power Plants

Highly Confidential / Proprietary 2009 Total Company Hourly Loads and Capacity

Highly Confidential / Proprietary Environmental Challenges Regulation / Agreement Affected PlantEquipment RequiredDecision Timeline Projected In- Service Date  KDHE Regional Haze Agreement  Sierra Club Agreement  LaCygne 1 & 2  Full BART Requirements (actual)  Utility MACT  SO² NAAQS  Revised CAIR  Montrose 1, 2 & 3  Lake Road 4/6  Sibley 1,2 & 3  Flue Gas Desulfurization (Scrubber)  Bag House  Ozone NAAQS  Montrose 1, 2 & 3  LaCygne 2  Lake Road 4/6  Sibley 1 & 2  Low Nox Burners & Over Fire Air  Selective Catalytic Reduction (SCR)  Selective Non-Catalytic Reduction (SNCR)  Clean Water Act Section 316(a)  Hawthorn 5  Iatan 1  Lake Road 4/6  Sibley 1, 2 & 3  Cooling Towers

Highly Confidential / Proprietary Danged if you do, danged if you don’t… Retire and build gas? Gas not likely to stay low or stable CT’s aren’t meant for continuous operation Pipeline infrastructure currently not capable Retrofit old coal units? When does the next shoe drop (Carbon, etc.) Ongoing capex to maintain old units Everybody trying to add retrofits in same time period adds to cost

Highly Confidential / Proprietary Key Signposts that will drive a final decision Environmental regulation Carbon Natural Gas Prices Economy / Customer Demand Do lots of scenario planning, watch the signposts carefully and defer decision as long as possible….

Highly Confidential / Proprietary So what if it all hits as laid out? Approximately $ 1.4 billion of investment with LaCygne KDHE requires retrofits by June, 2015 Approximately $ 750m in potential retrofits after LaCygne Simply doing nothing is not a free option Decision not to retrofit older coal units for $540 m means a loss of capacity of 610MW 610MW of CT’s would be approximately $ 610m Note: Does not include cost of additional wind

Highly Confidential / Proprietary My Prediction ? New coal units (<50 year old coal units) will get retrofitted Older (>50 years old coal units) will get retired Natural gas prices will rise back into $7-9 range, but have less volatility Baseload will get “out of balance” before nuclear builds are complete

Highly Confidential / Proprietary There is still hope…… Phase – in environmental regulations Spreads labor Spreads out engineering Spreads out manufacturing Allow flexibility in meeting regulations Don’t prescribe “how” to make limits Allow ramp down for units that will be retired vs. retrofitted When in doubt, spread it out………..