COLLABORATION AGREEMENT

This Agreement is executed this 19th day of March, 2007, by and between the Kansas City Power & Light Company (“KCPL”), the Sierra Club, and the Concerned Citizens of Platte County, Inc. (“CCPC”) (collectively, the “Parties”), as set forth below.

WHEREAS, KCPL owns and operates an electric generating plant known as the Iatan Generating Station located in Platte County, Missouri;

WHEREAS, KCPL applied for a Prevention of Significant Deterioration (“PSD”) Permit to Construct to undertake work at the Iatan Generating Station, including work on the existing electrical utility steam generating unit (“Iatan Unit 1”) to install new pollution control systems, to set a permit limit on the heat input rate of Iatan Unit 1, and to construct at the Iatan Generating Station a second pulverized coal-fired boiler and associated pollution control equipment (“Iatan Unit 2”) (collectively the “Iatan Project”);

WHEREAS, the Missouri Department of Natural Resources (“MDNR”) issued a PSD Permit to Construct for the Iatan Project on January 31, 2006, Permit No. 012006-019 (the “Iatan PSD Permit”);

WHEREAS, on March 2, 2006, the Sierra Club filed a Complaint with the Missouri Air Conservation Commission (“ACC”) to appeal from MDNR’s issuance of the Iatan PSD Permit in ACC Appeal No. 06-0251, urging, among other things, that the MDNR require more stringent emissions limits for certain emissions from Iatan Units 1 and 2;

WHEREAS, the Parties also have disputes regarding ratemaking proceedings originally filed before the Missouri Public Service Commission (“MPSC”) and the Kansas Corporation Commission (“KCC”) and now under appeal in the respective jurisdictions;

WHEREAS, on March 1, 2007, KCPL filed a federal declaratory judgment action against the Sierra Club in the United States District Court for the Western District of Missouri;

WHEREAS, KCPL has made an application to construct a combustion by-product landfill to support the on-going operation of the Iatan units after the installation of the new pollution control facilities, and such application is currently under review by the MDNR;

WHEREAS, KCPL also owns and operates an electric generating plant known as the La Cygne Generating Station located in Linn County, Kansas, consisting of two units (“La Cygne Unit 1” and “La Cygne Unit 2”), and those units are the subject of discussions between KCPL and the Kansas Department of Health and Environment (“KDHE”) regarding the emissions limits to be set for those units for certain emissions pursuant to the Best Available Retrofit Technology (“BART”) regulations;

WHEREAS, the Parties desire to enter into this Collaboration Agreement (“Agreement”) to resolve all of these disputes or potential disputes such that the Iatan Project may move forward

without delay and the ratemaking proceedings may proceed without the Sierra Club’s and CCPC’s further objections;

WHEREAS, the Parties commit to work collaboratively, in a positive manner, with a goal to achieve a twenty percent reduction by 2020 of the 2006 carbon dioxide emissions levels from KCPL’s overall operations;

WHEREAS, KCPL desires to continue to build on its significant investments in energy efficiency, renewable energy, and emissions control;

NOW, THEREFORE, in consideration of the foregoing and of the mutual promises contained in this Agreement and intending to be legally bound, the Parties agree as follows:

Section I.   Changes to be Incorporated into Iatan PSD Permit.

The Parties agree to proposed changes to the emissions limits for certain emissions set forth in the Iatan PSD Permit, including nitrogen oxides (“NO _x ”), sulfur dioxide (“SO ₂ ”), sulfuric acid mist (“SAM”), and opacity. The emissions limits will be incorporated into an administrative amendment to the Iatan PSD Permit as set forth in Exhibit 1 attached to this Agreement and incorporated herein by this reference as if set forth fully herein. KCPL agrees not to seek to increase the limits for emissions of NO _x , SO _2, SAM, stack particulate matter, and opacity from the Iatan Generating Station set forth in Exhibit 1 while this Agreement is in effect.

Section II.   Emissions Limits to be Included in Proposed Consent Agreement Between KDHE and KCPL For the La Cygne Generating Station.

No later than December 31, 2007, KCPL will submit to KDHE proposed Unit 1 and Unit 2 average limits for certain emissions emitted at the La Cygne Generating Station at limits lower than KCPL asserts would otherwise be required by presumptive BART limits, including emissions limits for NO _x , SO ₂ , filterable Particulate Matter less than 10 microns in size (“filterable PM ₁₀ ”) and total Particulate Matter less than 10 microns in size (“total PM ₁₀ ”) to become effective when compliance with BART regulations is first required. KCPL agrees to support the inclusion of these limits in the Kansas State Implementation Plan. KCPL agrees to use its best efforts to install pollution control technologies that would allow KCPL to reduce its emissions of NO _x , SO ₂ , filterable PM _10, and total PM ₁₀ from La Cygne Units 1 and 2 prior to the date that its compliance with the BART regulations is required and at the latest by June 1, 2015. KCPL agrees to issue the request(s) for proposals (RFP) for pollution control technologies to be installed at the La Cygne Generating Station pursuant to this Agreement on or before December 31, 2008, and agrees that the RFP(s) will request that construction commence on or before December 31, 2010. The emissions limits that KCPL agrees to seek in the proposed consent agreement are set forth in Exhibit 2 attached to this Agreement and incorporated herein by this reference as if set forth fully herein.

Section III.   Collaboration on Carbon Dioxide Offsets, Energy Efficiency and Community Investment.

KCPL will seek regulatory approval from the MPSC and/or the KCC, to the extent necessary, to undertake Renewable Energy, Energy Efficiency, and other projects that the Parties have estimated will offset the annual carbon dioxide (“CO ₂ ”) emissions generated from KCPL’s Iatan Unit 2 of 6,012,645 tons as set forth in Exhibit 3, the “Settlement Sheet CO ₂ Calculations” which is attached to and incorporated by this reference in this Agreement as if set forth fully herein. The Parties’ particular agreements regarding CO ₂ emissions are set forth below:

a.   Renewable Energy .   To the extent KCPL obtains the regulatory approval(s) that it will seek from the MPSC and/or the KCC, KCPL hereby commits to add 100 additional megawatts (MW) capacity of wind-generated electric power by December 31, 2010 and to add 300 additional MW capacity of wind-generated electric power by December 31, 2012. The Sierra Club and CCPC agree that they will support regulatory approval of these projects but to the extent that such projects involve components beyond wind-generated electric power, each of them reserves their right to object to such other components. KCPL further agrees to exert its best efforts to add the total 400 MW capacity of wind-generated electric power in the earliest reasonable timeframe, including filing requests for approval in such a manner that the regulatory agency will have adequate time to make informed decisions on such requests;

b.   Energy Efficiency .   To the extent that KCPL obtains the regulatory approval(s) and appropriate ratemaking treatment(s) that it will seek from the MPSC and/or the KCC, KCPL hereby commits to undertake by December 31, 2010 additional Energy Efficiency projects designed to reduce annual electricity demand by an additional 100 MW, and to undertake additional Energy Efficiency projects designed to reduce annual electricity demand by an additional 200 MW by December 31, 2012 for a total of 300 MW demand reductions. KCPL further agrees to exert its best efforts to add the total 300 MW of energy efficiency in the earliest reasonable timeframe, including filing its requests for approval in such a manner that the regulatory agency will have adequate time to make informed decisions on such requests;

c.   Additional Carbon Dioxide Offsets .   In addition, KCPL will undertake projects that would offset CO ₂  emissions generated from KCPL’s Iatan Unit 2 by an additional 711,159 tons annually (as calculated in Exhibit 3) by December 31, 2012. The Parties hereby agree that the offsets required by this subparagraph c must be achieved by the following projects, by other projects that are mutually agreed upon by the Parties, or by a combination thereof:

1.   Additional Renewable Energy or Energy Efficiency projects; or

2.   KCPL’s closing, de-rating, or re-powering of, or efficiency improvements at any of its electric generating units. For purposes of calculating the CO ₂ offsets that would be achieved from such projects under this subparagraph c, the Parties hereby agree that such offsets will be calculated based upon any such unit’s historical use during the most recent representative three years;

d.   Net Metering Tariff, Montrose Study, and Legislative Collaboration.

1.   KCPL agrees to consult with Sierra Club and CCPC in developing a net metering tariff. KCPL agrees to file the net metering tariff in Missouri and Kansas within 6 months after this Agreement is executed by the Parties. This Agreement does not constrain Sierra Club and/or CCPC from intervening in any administrative proceeding related to net metering;

2.   KCPL agrees to conduct a study of KCPL’s Montrose Generating Station (“Montrose Study”) with Sierra Club and CCPC participation to assess potential future use, including without limitation, retiring, re-powering, and upgrading the units. KCPL will host at least two meetings to solicit Sierra Club and CCPC participation, including as part of the scoping for this study and when a draft report is prepared. KCPL agrees to conclude the Montrose Study within one year after this Agreement is executed by the Parties;

3.   KCPL, the Sierra Club, and CCPC agree to collaborate on legislation and/or regulatory initiatives in both Kansas and Missouri to encourage the reduction of emissions, including carbon dioxide, through, among other things, energy efficiency building standards, appliance standards, and other incentives for energy efficiency investments by utilities;

e.   Community Investment.   KCPL agrees to grant $180,000 to implement the recommendations of the Kansas City, Missouri Climate Protection Plan administered by the City of Kansas City, Missouri regarding projects in the Kansas City area that employ energy efficiency, renewables, emission control technology, or carbon reduction technology. The projects to be funded by this grant are separate from those required to be undertaken by subsections a, b, and c of this Section. In addition, KCPL agrees to grant $60,000 to support ozone and PM monitoring within the greater Kansas City region, to be administered by the Mid-America Regional Council; agrees to grant $100,000 for City of Weston drinking water infrastructure upgrades, payable within 10 days from the date the last dismissal required in Section IV of this Agreement becomes effective, to the City of Weston, Attn: Mayor Howard Hellebuyck, City Hall, 300 Main, Weston, MO 64098; and agrees to fund a new left turn lane at Highway 45 and Iatan Road.

Section IV.   Dismissals and Releases of Legal Actions or Claims.

a.   Within ten (10) days of execution of this Agreement by all Parties, the Sierra Club, KCPL and MDNR will file a Joint Stipulation of Dismissal with Prejudice that dismisses the Sierra Club’s appeal of the Iatan PSD Permit with prejudice in substantially the form set forth in Exhibit 4 and attached to this Agreement and incorporated herein by this reference as if set forth fully herein. The Sierra Club and the CCPC hereby release any objections or claims they may have regarding any of the emissions limits for the Iatan Generating Station as of the date of this Agreement. The Sierra Club and CCPC further agree they will not file any opposition to any amendments to the Iatan PSD Permit pertaining to the current modification of Iatan Unit 1 and construction of Iatan Unit 2, specifically including the changes proposed in the September 11, 2006 letter from Paul Ling of KCPL to James Kavanaugh of MDNR, a copy of which is attached hereto as Exhibit 5, and any changes not resulting in any increase in any pollutant emissions above the Iatan PSD Permit emissions limits, as modified pursuant to this Agreement;

b.   Sierra Club will dismiss with prejudice its appeal from the judgment in In the Matter of the Future Supply, Delivery and Pricing of the Electric Service Provided by Kansas City Power/Sierra Club v. Kansas Corporation Comm’n and Kansas City Power & Light Company ,

d.   KCPL hereby agrees to dismiss with prejudice its complaint in Kansas City Power & Light Company v. Sierra Club , United States District Court for the Western District of Missouri Case No.: 07-0159-CV-W-GAF (filed March 1, 2007) within ten (10) days of execution of this Agreement by all Parties;

e.   The Sierra Club and CCPC hereby agree to release forever each and every claim that they or either of them have asserted or could have asserted as of the date of the execution of this Agreement in the actions or appeals referenced in this Agreement or arising from KCPL’s operation of the Iatan Generating Station or the La Cygne Generating Station. This release is intended to be construed as broadly as legally permissible and expressly includes, without limitation, the release of any and all claims or allegations that the Sierra Club and/or CCPC have asserted or could have asserted as of the date of the execution of this Agreement alleging that KCPL violated any provision of the Clean Air Act, or any of the state regulations implementing any provision of the Clean Air Act, ¹   by any action that KCPL has allegedly taken or has allegedly failed to undertake. This release also includes, without limitation, the release of any claims the Sierra Club or CCPC may have regarding any emissio