1. Kansas City Power & Light Position on Benefit Cost Models presented to Kansas Corporation Commission Sue Nathan August 9, 2006 Topeka, KS

2. KCP&Ls Position We view DSM as an alternative to supply resource that receives comparable regulatory treatment. (Investment treatment/cost recovery/earnings) We are looking at DSM as an environmentally friendly resource. We believe any test applied to programs should consider broader criteria, more than just economic. We support the Total Resource Cost test as the screening tool for selecting potential DSM programs. We believe the utility is an efficient channel for these programs due to its relationship and trust position with its customers.

3. Things to think about… Programs need to be as cost effective as possible … but that should only be one criteria Programs should pass as many tests as possible … but they shouldnt have to pass all tests Programs should meet both customer and company needs … but not be expected to meet all needs of all parties People have choices and do not always make economically logical choices We want to meet our customers and our needs.

4. Growth in our Service Territory We are primarily an urban/suburban utility High growth we are experiencing is mostly urban/suburban Kansas as a whole is more rural than we are We want to target our programs to our customers needs

5. Comprehensive Energy Plan

6. Balanced Portfolio of Programs ProgramTypeLow IncomeResidentialSm CommMed CommLrg Comm Affordability -Affordable New HomesDir Impact - Low Income WeatherizationDir Impact Energy Efficiency - Res Online Information & AnalysisEducational - Home Performance w/En Star-TngEducational - Change a Light, Change the WorldDir Impact - Cool HomesDir Impact - Energy Star HomesDir Impact - Comm Online Information & AnalysisEducational - C&I Audit RebateEducational - C&I Custom Rebate - RetrofitDir Impact - C&I Custom Rebate – New ConstDir Impact - Building Operator CertificationDir Impact Demand Response - Energy Optimizer (A/C Cycling)Dem Resp - MPower (C&I Curtailment)Dem Resp

7. Our Preference for a benefit cost test: Total Resource Cost test….. Why? –More comprehensive –Looks at EE as resource option/level playing field –Looks at EE more as a business

8. Besides avoided capacity and energy costs, others benefits of EE include: Reduced line losses for capacity and energy Avoided or deferred distribution and transmission upgrades Avoided firm transportation charges Diversity of portfolio Hedging for potential future costs Skill set development Healthier economic community benefits customers and company

9. No time like now to get started Look longer term Provide a level playing field for DSM and power plants Use the TRC test to screen potential DSM programs We are looking forward to working with the State on implementing DSM programs