FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2011

Notes to Financial Statements [Abstract]

14.	FAIR VALUE MEASUREMENTS

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. GAAP establishes a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad categories, giving the highest priority to quoted prices in active markets for identical assets or liabilities and lowest priority to unobservable inputs. A definition of the various levels, as well as discussion of the various measurements within the levels, is as follows:

Level 1 – Unadjusted quoted prices for identical assets or liabilities in active markets that Great Plains Energy and KCP&L have access to at the measurement date. Assets categorized within this level consist of Great Plains Energy’s and KCP&L’s various exchange traded derivative instruments and equity and U.S. Treasury securities that are actively traded within KCP&L’s decommissioning trust fund and GMO’s SERP rabbi trust fund.

Level 2 – Market-based inputs for assets or liabilities that are observable (either directly or indirectly) or inputs that are not observable but are corroborated by market data. Assets and liabilities categorized within this level consist of Great Plains Energy’s and KCP&L’s various non-exchange traded derivative instruments traded in over-the-counter markets and certain debt securities within KCP&L’s decommissioning trust fund and GMO’s SERP rabbi trust fund.

Level 3 – Unobservable inputs, reflecting Great Plains Energy’s and KCP&L’s own assumptions about the assumptions market participants would use in pricing the asset or liability. Assets categorized within this level consist of Great Plains Energy’s various non-exchange traded derivative instruments traded in over-the-counter markets for which sufficiently observable market data is not available to corroborate the valuation inputs.

The following tables include Great Plains Energy’s and KCP&L’s balances of financial assets and liabilities measured at fair value on a recurring basis at September 30, 2011, and December 31, 2010.


						Fair Value Measurements Using
Description	September 30 2011		Netting(d)			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
KCP&L	(millions)
Assets
Derivative instruments (a)	$	-	$	-		$	-	$	-	$	-
Nuclear decommissioning trust (b)
Equity securities		75.2		-			75.2		-		-
Debt securities
U.S. Treasury		14.7		-			14.7		-		-
U.S. Agency		3.6		-			-		3.6		-
State and local obligations		2.6		-			-		2.6		-
Corporate bonds		25.3		-			-		25.3		-
Foreign governments		0.7		-			-		0.7		-
Other		0.3		-			-		0.3		-
Total nuclear decommissioning trust		122.4		-			89.9		32.5		-
Total		122.4		-			89.9		32.5		-
Liabilities
Derivative instruments (a)		-		(0.2	)		0.2		-		-
Total	$	-	$	(0.2	)	$	0.2	$	-	$	-
Other Great Plains Energy
Assets
Derivative instruments (a)	$	9.3	$	-		$	-	$	4.8	$	4.5
SERP rabbi trust (c)
Equity securities		0.2		-			0.2		-		-
Debt securities		0.2		-			-		0.2		-
Total SERP rabbi trust		0.4		-			0.2		0.2		-
Total		9.7		-			0.2		5.0		4.5
Liabilities
Derivative instruments (a)		-		(2.0	)		2.0		-		-
Total	$	-	$	(2.0	)	$	2.0	$	-	$	-
Great Plains Energy
Assets
Derivative instruments (a)	$	9.3	$	-		$	-	$	4.8	$	4.5
Nuclear decommissioning trust (b)		122.4		-			89.9		32.5		-
SERP rabbi trust (c)		0.4		-			0.2		0.2		-
Total		132.1		-			90.1		37.5		4.5
Liabilities
Derivative instruments (a)		-		(2.2	)		2.2		-		-
Total	$	-	$	(2.2	)	$	2.2	$	-	$	-


						Fair Value Measurements Using
Description	December 31 2010		Netting(d)			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
KCP&L	(millions)
Assets
Derivative instruments (a)	$	-	$	(0.1	)	$	0.1	$	-	$	-
Nuclear decommissioning trust (b)
Equity securities		85.5		-			85.5		-		-
Debt securities
U.S. Treasury		8.9		-			8.9		-		-
U.S. Agency		4.8		-			-		4.8		-
State and local obligations		2.5		-			-		2.5		-
Corporate bonds		23.7		-			-		23.7		-
Foreign governments		0.7		-			-		0.7		-
Other		0.4		-			-		0.4		-
Total nuclear decommissioning trust		126.5		-			94.4		32.1		-
Total		126.5		(0.1	)		94.5		32.1		-
Liabilities
Derivative instruments (a)		-		(0.1	)		0.1		-		-
Total	$	-	$	(0.1	)	$	0.1	$	-	$	-
Other Great Plains Energy
Assets
Derivative instruments (a)	$	8.9	$	(0.5	)	$	0.5	$	5.2	$	3.7
SERP rabbi trust (c)
Equity securities		0.2		-			0.2		-		-
Debt securities		7.0		-			-		7.0		-
Total SERP rabbi trust		7.2		-			0.2		7.0		-
Total		16.1		(0.5	)		0.7		12.2		3.7
Liabilities
Derivative instruments (a)		20.8		(3.0	)		3.0		20.8		-
Total	$	20.8	$	(3.0	)	$	3.0	$	20.8	$	-
Great Plains Energy
Assets
Derivative instruments (a)	$	8.9	$	(0.6	)	$	0.6	$	5.2	$	3.7
Nuclear decommissioning trust (b)		126.5		-			94.4		32.1		-
SERP rabbi trust (c)		7.2		-			0.2		7.0		-
Total		142.6		(0.6	)		95.2		44.3		3.7
Liabilities
Derivative instruments (a)		20.8		(3.1	)		3.1		20.8		-
Total	$	20.8	$	(3.1	)	$	3.1	$	20.8	$	-

(a)	The fair value of derivative instruments is estimated using market quotes, over-the-counter forward price and volatility curves and correlations among fuel prices, net of estimated credit risk.

(b)

Fair value is based on quoted market prices of the investments held by the fund and/or valuation models. The total does not include $3.1 million and $2.7 million at September 30, 2011, and December 31, 2010, respectively, of cash and cash equivalents, which are not subject to the fair value requirements.

(c)

Fair value is based on quoted market prices of the investments held by the fund and/or valuation models. The total does not include $20.4 million and $14.6 million at September 30, 2011, and December 31, 2010, respectively, of cash and cash equivalents, which are not subject to the fair value requirements.

(d)

Represents the difference between derivative contracts in an asset or liability position presented on a net basis by counterparty on the consolidated balance sheet where a master netting agreement exists between the Company and the counterparty. At September 30, 2011, and December 31, 2010, Great Plains Energy netted $2.2 million and $2.5 million, respectively, of cash collateral posted with counterparties.

The following tables reconcile the beginning and ending balances for all level 3 assets and liabilities, net measured at fair value on a recurring basis for the three months ended and year to date September 30, 2011 and 2010.


Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Other Great
	Plains Energy
	Derivative
	Instruments
	(millions)
Balance July 1, 2011	$	4.9
Total realized/unrealized gains or (losses)
Included in non-operating income		4.0
Settlements		(4.4	)
Balance September 30, 2011	$	4.5

Total unrealized gains and (losses) included in non-operating
income relating to assets and liabilities still on the
consolidated balance sheet at September 30, 2011	$	(0.3	)


Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Other Great
	Plains Energy
	Derivative
	Instruments
	(millions)
Balance January 1, 2011	$	3.7
Total realized/unrealized gains or (losses)
Included in non-operating income		11.1
Settlements		(10.3	)
Balance September 30, 2011	$	4.5

Total unrealized gains and (losses) included in non-operating
income relating to assets and liabilities still on the
consolidated balance sheet at September 30, 2011	$	1.2


Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Other Great
	Plains Energy
	Derivative
	Instruments
	(millions)
Balance July 1, 2010	$	5.2
Total realized/unrealized gains or (losses)
Included in non-operating income		(3.6	)
Settlements		2.1
Balance September 30, 2010	$	3.7

Total unrealized gains and (losses) included in non-operating
income relating to assets and liabilities still on the
consolidated balance sheet at September 30, 2010	$	(1.3	)


Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
				Other Great			Great Plains
	KCP&L			Plains Energy			Energy
	State & Local			Derivative
	Obligations			Instruments			Total
	(millions)
Balance January 1, 2010	$	0.2		$	4.1		$	4.3
Total realized/unrealized gains or (losses)
Included in non-operating income		-			(9.5	)		(9.5	)
Sales		(0.2	)		-			(0.2	)
Settlements		-			9.1			9.1
Balance September 30, 2010	$	-		$	3.7		$	3.7

Total unrealized gains and (losses) included in non-operating
income relating to assets and liabilities still
on the consolidated balance sheet at September 30, 2010	$	-		$	-		$	-

- Definition

This item represents the complete disclosure regarding the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the Company is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risk is are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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