<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>3
<FILENAME>dex992.txt
<DESCRIPTION>PETITION FOR PARTIAL STAY AND RECONSIDERATION
<TEXT>
<PAGE>

BEFORE THE
STATE CORPORATION COMMISSION
OF THE STATE OF KANSAS

Before Commissioners: John Wine, Chair
Cynthia L. Claus
Brian J. Moline

In the Matter of the Investigation of Actions of )
Western Resources, Inc. to Separate its ) Docket No. 01-WSRE-949-GIE
Jurisdictional Electric Public Utility Business )
from its Unregulated Businesses )
)

PROTECTION ONE, INC.'S PETITION
FOR PARTIAL STAY AND LIMITED RECONSIDERATION
OF COMMISSION ORDER NO. 55

Mitchell F. Hertz Teresa J. James
Robert R. Gasaway WALLACE, SAUNDERS,
KIRKLAND & ELLIS AUSTIN, BROWN & ENOCHS
655 Fifteenth Street, N.W. 1900 Epic Center
Suite 1200 301 North Main Street
Washington, D.C. 20005 Wichita, KS 67202-4806
(202) 879-5000 (316) 369-2100

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TABLE OF CONTENTS

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Page
<S> <C>
INTRODUCTION ..................................................................................... 1

BACKGROUND ....................................................................................... 3

A. Protection One Is A Publicly Traded Company, And Westar Has No Authority To Make
Unilateral Decisions Affecting Protection One's Minority Shareholders .................. 3

B. Protection One Has Entered Into Several Lawful Contracts With Westar
Energy and Westar Industries ........................................................... 4

C. Order 55 Will Adversely Affect Protection One .......................................... 6

ANALYSIS ......................................................................................... 7

I. ABROGATION OF PROTECTION ONE'S CONTRACTS WITH WESTAR WOULD BE UNCONSTITUTIONAL .............. 8

II. ABROGATION OF PROTECTION ONE'S CONTRACTS EXCEEDS THE COMMISSION'S AUTHORITY ................. 13

A. The Commission Lacks Authority To Abrogate Utilities' Contractual Arrangements ......... 13

B. Even If The Commission Had Authority To Abrogate Utilities' Contractual Arrangments,
Order 55 Lacks Record Support .......................................................... 17

C. Even If The Commission Had Authority To Abrogate Utilities' Contractual Arrangements,
It Should Decline To Exercise It ....................................................... 18

III. APPLICATION OF ORDER 55 TO THE PROTECTION ONE CONTRACTS WITH WESTAR ENERGY WOULD UNLAWFULLY
UNDERMINE THE COMMISSION'S GOALS FOR WESTAR ENERGY'S CAPITAL STRUCTURE ...................... 20

A. Abrogating Protection One's Contracts Would Undermine The Commission's
Goals By Weakening Westar Energy's Financial Position .................................. 21

B. Abrogating Protection One's Contracts Would Subject Westar Energy To Liability For
Contract Damages ....................................................................... 23

IV. THE COMMISSION'S ORDER IS INVALID BECAUSE THE COMMISSION HAS FAILED TO PROVIDE A REASONED
EXPLANATION FOR ITS DECISION TO ABROGATE PROTECTION ONE'S LAWFUL CONTRACTS .................. 25

CONCLUSION ....................................................................................... 27
</TABLE>

<PAGE>

This petition for partial stay and limited reconsideration ("the Petition")
is being filed by Protection One, Inc. ("Protection One") independently of
Westar Energy, Inc. ("Westar Energy")./1/ It is being filed pursuant to K.A.R.
(S)(S) 82-1-235(c)(2), (3), and (4) in order to urge that the Commission
specifically reconsider the issues of fact, issues of law, legal authorities,
and additional evidence described herein. The gravamen of the Petition is that
Order 55 of this Docket is unconstitutional, unauthorized by statutory
authority, unsupported by record evidence, and insufficiently explained -- at
least to the extent that it directs Westar Energy or Westar Industries, Inc.
("Westar Industries") to breach contracts with Protection One. Protection One
respectfully requests that the Commission immediately stay the effect of Order
55 as it may apply to Protection One contracts. Protection One also requests
that the Commission reconsider and revise the Order so that it clearly does not
abrogate or interfere with Protection One's contractual arrangements. Finally,
pursuant to K.A.R. (S) 82-1-235(c)(3), Protection One respectfully suggests that
the Commission hear oral argument on the pressing issues covered in this
Petition. Given the importance of these issues, Protection One believes that
oral argument would be helpful to the Commission.

INTRODUCTION

Protection One is principally engaged in providing security alarm
monitoring to homes and small businesses, including the sale, installation, and
servicing of alarm systems. With over one million customers, Protection One is
the second largest provider of security services in the United States.

----------------------
/1/ Petition One's Petition to Intervene was filed on January 9, 2003, and is
now pending before the Commission. In anticipation of a Commission ruling
granting that intervention petition, this Petition is being filed consistent
with the January 10, 2003 deadline for submissions seeking reconsideration of
Order 55.

<PAGE>

Protection One has been much discussed in these proceedings. Often, it has
been described as an "affiliate" of Westar Energy. See, e.g., Order No. 51 at
(P) 58. In fact, Protection One is a publicly traded company, listed on the New
York Stock Exchange. A clear majority (approximately 88 percent) of Protection
One's stock is owned by Westar Industries, which in turn is 100 percent-owned by
Westar Energy. But precisely because Protection One is publicly traded and has
shares in the hands of the public (as it has since before Westar Industries'
acquisition of Protection One stock), Protection One's management and board of
directors must (and do) protect the interests of both the company as a whole and
all of Protection One's shareholders, including its minority shareholders, to
whom certain fiduciary duties are owed.

This Petition is being filed, among other reasons, to inform the Commission
of these interests. It asks that the Commission stay and reconsider Order 55 to
the extent that it purports to abrogate Protection One's contractual rights -- a
step that would inevitably be to the significant detriment of Protection One's
future business prospects, as well as, for reasons discussed below, the
detriment of Westar Energy and, ultimately, the stated objectives of the
Commission.

Protection One, which has not appeared in these proceedings until now,
trusts and hopes that the Commission finds this Petition non-repetitive,
helpful, and a useful basis for discussions. It is not intended to address, much
less to disparage, the Commission's ultimate goals for Westar Energy's corporate
organization or capital structure. Rather, the Petition aims to build on
Protection One's common interests with the Commission, including especially the
Commission's important interests in preserving Westar Energy's ability to retire
significant amounts of debt with proceeds from the sale of Westar Energy's
holdings of Protection One stock, and to obtain repayment for Westar Industries
pursuant to the credit facility Westar Industries provides to

<PAGE>

Protection One. These shared objectives are realistically obtainable only to the
extent that Protection One remains a viable business, and is so perceived by the
investing public and prospective purchasers of Westar Industries' interest in
Protection One. That viability is being questioned because of the Commission's
Order 55. Accordingly, granting this Petition and modifying that Order would
constitute significant steps toward goals the Commission and Protection One
share in common.

BACKGROUND

Absent reconsideration of Order 55, Protection One, including its minority
shareholders, will be substantially and unlawfully prejudiced by the
Commission's actions in these proceedings.

A. Protection One Is A Publicly Traded Company, And Westar Has No
Authority To Make Unilateral Decisions Affecting Protection One's
Minority Shareholders.

Protection One is incorporated in Delaware and listed on the New York Stock
Exchange. One of the largest U.S.-based security services providers, Protection
One has approximately 2,900 employees in the United States as a whole,
approximately 725 of which are based in Kansas.

Since its initial public offering in 1994, Protection One's stock has at
all times been publicly traded, with shares in the hands of the public. At the
time of that 1994 offering, Protection One was listed on the NASDAQ (under the
ticker symbol ALRM). Protection One continued to be NASDAQ-traded through the
1997 transactions that originally created its affiliations with Westar Energy,
right up to its November 1998 listing on the New York Stock Exchange (under the
ticker symbol POI).

Westar Energy became the indirect, majority owner of Protection One as a
result of a November 24, 1997 transaction between Protection One and Western
Resources, Inc. (which

<PAGE>

later changed its name to Westar Energy). Protection One received all of the
outstanding stock of Western Resources' security alarm monitoring businesses
(then known as Westsec and Westar), plus additional consideration in the form of
cash and securities. In return, Protection One issued to Western Resources
68,673,402 shares of Protection One common stock (approximately 82.4 percent of
Protection One's outstanding stock at that time). Today, approximately 12
percent of Protection One's common stock is publicly held, while Westar
Industries (a subsidiary of Westar Energy) holds the remainder. (The
relationship between Protection One, Westar Energy, and Westar Energy's
utilities is shown in Attachment A.)

It bears emphasis that, although a majority of its stock is held by Westar
Industries, Protection One has its own executive leadership and board of
directors, which have legal duties and fiduciary obligations independent of
those of Westar Energy. As of the filing of this Petition, Protection One's
board consists of eight persons, of which only one has significant ties to
Westar Industries or Westar Energy, apart from his Protection One board
membership. (The Protection One board of directors is more fully described in
Attachment B.) Neither Westar Industries, nor Westar Energy, has any authority
to make unilateral decisions compromising the interests of Protection One's
minority shareholders.

B. Protection One Has Entered Into Several Lawful Contracts With Westar
Energy and Westar Industries.

Protection One has entered into a number of legally-binding contracts with
Westar Energy and Westar Industries. Several of these contracts merit detailed
explanation because of their importance to Protection One and the risk that the
Commission by its Order 55 may (perhaps unintentionally) have set the stage for
an unlawful abrogation of or infringement on these contracts. These contracts
include, but are not limited to, the following:

<PAGE>

The Tax-Sharing Agreement with Westar Energy. At the time of the merger,
Western Resources and Protection One entered into a mutually beneficial
Tax-Sharing Agreement under which the two companies agreed to file a
consolidated tax return. Under applicable tax law, Protection One had the
option, but not the obligation, to enter into this agreement. Absent a
Tax-Sharing Agreement, Protection One would have used any net operating losses
to offset operating income, if any, in future years. Under the Tax-Sharing
Agreement, however, Westar Energy received the tax benefits of Protection One's
losses throughout the course of the current tax year and, as a result, is
obligated to return those tax savings to Protection One. The Tax-Sharing
Agreement has thus provided benefits to Westar Energy, in that Westar Energy has
enjoyed the time value of money saved due to reduced taxes throughout the 2002
tax year prior to making payment to Protection One. For the 2002 tax year,
Protection One is owed an amount projected at between $17 and $29 million that
will be due when Westar Energy's 2002 tax return is filed, possibly as early as
the first quarter of 2003. (A copy of the Tax-Sharing Agreement is included in
Attachment D.)

The Senior Credit Facility with Westar Industries. Protection One's Senior
Credit Facility with Westar Industries allows it to borrow up to $280 million,
subject to compliance with various financial conditions. This facility provides
essential liquidity for Protection One, for it makes credit available (up to the
$280 million limit) immediately upon Protection One's request. Under the Senior
Credit Facility, Protection One pays a floating interest rate on all borrowed
funds, and is subject to certain financial covenants. Currently, Protection One
is in compliance with all Senior Credit Facility covenants and, as of January 9,
2002, Protection One had outstanding borrowings of $215.5 million. Protection
One thus currently has a legal right to

<PAGE>

make additional borrowings under the facility in accordance with its terms. (A
copy of the Senior Credit Facility is included in Attachment E.)

The Outsourcing Agreement With Westar Energy. The Commission's Order also
affects certain obligations remaining under the Outsourcing Agreement between
Westar Energy and Protection One Data Services, Inc. ("PODS"), a wholly-owned
Protection One subsidiary. Under that agreement, the parties initially
contracted for PODS to provide through December 2005 certain critical
information technology services previously performed by Westar Energy itself.
Although the parties to the Outsourcing Agreement mutually agreed to terminate
the Agreement effective December 31, 2002, certain of Westar Energy's other
obligations under the Agreement remain to be performed, including Westar
Energy's obligation to reimburse PODS approximately $500,000.00 in pre-payments
that have already been made by PODS for certain third-party IT services to be
provided in 2003 or other future years.

Finally, the Commission should bear in mind that the flows of funds between
Protection One and Westar Energy or Westar Industries are by no means all in one
direction. For example, Protection One pays Westar Energy to provide
administrative and advisory services pursuant to a Shared Services Agreement
dated April 1, 1999 (as amended). (A copy of the Services Agreement is included
in Attachment F.) These services are charged at Westar Energy's fully-loaded
costs and include various accounting, tax, audit, human resources, purchasing,
and facilities management activities. For the nine months ending September 30,
2002, Protection One paid approximately $3.6 million for these services.

C. Order 55 Will Adversely Affect Protection One.

Whether intended or not, Order 55 is poised to unlawfully abrogate or
infringe contracts between Westar Energy (as well as Westar Industries) and
Protection One. For example, Order 55 prohibits Westar Energy from fulfilling
its obligations under the Tax-Sharing Agreement. See

<PAGE>

Order No. 55 at (P) 73. Specifically, Order 55 apparently purports to nullify
Protection One's right to receive the payments due to Protection One for tax
year 2002 and subsequent years. See id.

In this same vein, Order 55 establishes a requirement that Westar Energy
notify the Commission "thirty (30) days before any investment of $100,000 or
more in nonutility businesses by Westar Energy or any affiliate." Order No. 55
at (P) 80. While allowing Protection One to draw down its line of credit is not
strictly speaking an "investment," if the Commission were to construe this
language to include draw-downs, the Order would undermine Protection One's
ability to access its unused credit capacity. By requiring 30 days advance
notice, Order 55 also denies Protection One its contractual right to draw down
funds immediately. (Again, this credit facility provides Protection One with
essential liquidity, and any impairment of Protection One's ability to draw
against it would have significant repercussions for Protection One.)

Finally, Order 55 expressly infringes Westar Energy's remaining obligations
under the Outsourcing Agreement with Protection One's subsidiary, PODS, by
requiring Westar Energy to seek Commission approval "before making any . . .
transfer of cash" that "equals or exceeds $100,000." Order No. 51 at (P) 113;
Order No. 55 at (P) 71 (stating that this requirement applies to the Outsourcing
Agreement).

ANALYSIS

The Commission might well imagine that the immediate contractual
impairments described above -- depriving Protection One of some $17-29 million
owed this year under the Tax-Sharing Agreement; potentially forestalling it from
drawing down funds under its Senior Credit Facility; and potentially stopping or
delaying it from receiving some $500,000.00 due under its Outsourcing Agreement
-- will financially impact Protection One, significantly and adversely.
Ultimately, Order 55 could have enormously adverse effects on Protection One.

<PAGE>

While the Commission in many circumstances might not be much concerned with
Protection One, or its future, there are compelling reasons why it should take
careful account of these bracing facts -- namely, their direct, negative
financial impacts on Westar Energy and its utilities. Indeed, even a perception
by the public capital markets that the Commission is impairing Protection One's
value or viability must be addressed -- and dispelled -- if the Commission's
goals are to be realized. Left unaddressed, such perceptions can only have the
effect of driving down the price that Westar Energy can command for its
Protection One stock holdings. For reasons described below, it is in the
manifest best interest of all parties, including the Commission and the Kansas
utility ratepayers, to work hard to ensure that the value and viability of
Protection One are left unimpaired.

I. ABROGATION OF PROTECTION ONE'S CONTRACTS WITH WESTAR WOULD BE
UNCONSTITUTIONAL.

The Commission has directed Westar Energy to "revise the Tax Sharing
Agreement to reflect its obligation to retain for the utility business the
benefits of tax losses attributable to the nonutility business until the
Commission finds that the utility company no longer bears debt associated with
the nonutility businesses." Order No. 55 at (P) 73. Further, it has potentially
made credit available to Protection One, not immediately, but (if at all) only
on 30 days' notice to the Commission. In addition, the Commission's Orders
provide that Westar Energy must seek "Commission approval before making any ...
transfer of cash to [Protection One] ... where the value of such transaction
equals or exceeds $100,000." Order No. 51 at (P) 113; see also Order No. 55 at
(P) 71. This requirement effectively abrogates Westar Energy's continuing
obligations under the Outsourcing Agreement between Protection One and Westar
Energy. Other agreements between Protection One and Westar Energy are also
placed at risk under the Commission's Order.

<PAGE>

These directives do not square with the Contract Clause of the United
States Constitution. The Contract Clause provides that "[n]o State shall . . .
pass any ... Law impairing the Obligation of Contracts .... "Art. I, (S) 10,
cl. 1. The Supreme Court has devised a three-part test for determining whether a
state law or regulation violates the Contract Clause: The law must [1] operate
as a "substantial impairment of a contractual relationship." Allied Structural
Steel Co. v. Spannaus, 438 U.S. 234, 244 (1978). If it does, it will be upheld
only if [2] the State provides "a significant and legitimate public purpose
behind the regulation," and [3] the "adjustment of the rights and
responsibilities of contracting parties [is based] upon reasonable conditions
and [is] of a character appropriate to the public purpose justifying [the
legislation's] adoption." Federal Land Bank of Wichita v. Bott, 240 Kan. 624,
634 (1987) (quoting Energy Reserves Group, Inc. v. Kansas Power & Light, Co.,
459 U.S. 400, 411-12 (1983)) (internal quotation marks omitted). Applying these
factors, particularly as interpreted by the Kansas Supreme Court in Land Bank of
Witchita v. Bott, illuminates the invalidity of the contract-abrogating
provisions of Order 55.

At the outset, there is substantial impairment of Protection One's
contractual relationships. The Supreme Court has recognized that "[t]otal
destruction of contractual expectations is not necessary for a finding of
substantial impairment." Energy Reserves, 459 U.S. at 411. Even so, here the
destruction is nearly total. The Tax-Sharing Agreement, for example, mandates a
"return benefit" to Protection One, but the Commission has expressly ordered
that Westar Energy "revise" the Agreement and "retain for the utility business
the benefits." Order No. 55 at (P) 73. In other words, the "revision" being
ordered is for Westar Energy to accept Protection One's obligations under the
Agreement but to refuse performance in return. Any vague assurances that perhaps
in the future the Commission might permit

<PAGE>

performance -- either under the Tax-Sharing Agreement or other contracts --
could hardly salvage what has been taken from Protection One, or repair the
damage from negative perceptions of Protection One's value and continued
viability by the public equity markets. In this same vein, to the extent Order
55 requires 30 days advance notice before Protection One draws upon the Senior
Credit Facility, the Order would substantially undermine that contract because
it defeats the very purpose of having revolving credit arrangements -- namely,
quick access to ready cash.

Although some courts have found lack of contractual impairment where a new
law was foreseeable, this escape hatch does not apply to the Commission's Order.
To justify abrogation, parties must have at the time their contract was entered
a "fair and appreciable warning of an impending intervention into their
agreements." Holiday Inns Franchising, Inc. v. Branstad, 29 F.3d 383, 385 (8th
Cir. 1994). Of course, it is no defense that Westar Energy (but not Protection
One) operates in a heavily regulated industry: "[A] history of regulation is
never a sufficient condition for rejecting a challenge based on the contracts
clause ... [t]he fact that some incidents of a commercial activity are heavily
regulated does not put the regulated firm on notice that an entirely different
scheme of regulation will be imposed." Chrysler Corp. v. Kolosso Auto Sales,
Inc., 148 F.3d 892, 895 (7th Cir. 1998). Here, the contracts between Westar
Energy and Protection One were lawful when made, and expectation of performance
was entirely reasonable. Indeed, the Commission's Order as a whole has garnered
national press coverage as an "unusual step" in the regulation of electric
utilities. See Rebecca Smith, Energy Firms Seek to Share Pain with Subsidiaries,
Wall. St. J., Dec. 26, 2002.

In light of these substantial, unexpected impairments of Protection One's
contractual rights, Order 55 simply fails to further the kind of "significant
public purposes" that might justify

<PAGE>

such impairments. See Spannaus, 438 U.S. at 244. The Commission is not, for
instance, responding to an "emergency" akin to the Great Depression, see, e.g.,
Home Bldg. & Loan Ass'n v. Blaisdell, 290 U.S. 398 (1934), or even the Kansas
farm foreclosure crisis of the 1980s, see, e.g., Federal Land Bank of Wichita v.
Bott, 240 Kan. 624 (1987). Indeed, Order 55 does not even acknowledge the legal
necessity of such a showing.

Finally, even if the Commission were to conclude at some future point that
abrogating contracts is essential for significant public purposes, it has failed
to pursue those purposes through "reasonable conditions" that preserve as much
as possible the integrity of the underlying agreements. See Spannaus, 438 U.S.
at 244. In particular, Order 55 contravenes the Kansas Supreme Court's decision
in Botts. There, even though the Family Farm Rehabilitation Act was passed in
response to a genuine farm foreclosure emergency, the court struck down the Act
as a violation of the Contract Clause because it did not protect "the integrity
of the mortgage indebtedness." Botts, 240 Kan. at 636. As the court explained:

[The Act] impairs the mortgage debt by authorizing redemption at less than
the judgment amount and preventing the mortgagee from bidding at a judicial
sale or obtaining a deficiency judgment. It changes the rate of interest
from that provided in the contract to a set rate provided in the Act. The
conditions of redemption are changed as the Act authorizes redemption of
any part or parcel of the mortgaged land. Further, the Act makes no
specific provision for the payment of taxes, profits, or reasonable rental
during the period of extended redemption.

Id. at 636-37. This list of offending particulars is significantly less severe
than either the Commission's outright cancellation of the Tax-Sharing Agreement,
or the potential 30-day advance notice requirement for Protection One's Credit
Facility, or its requirement for Commission pre-approval for payments under the
Outsourcing Agreement. Order 55 thus fails the Botts standard for testing the
validity of contractual impairments.

In any event, the Commission cannot dispose of the Contract Clause issue
without providing, at a minimum, "a concise and specific statement of the
relevant law and basic facts."

<PAGE>

See Gas Serv. Corp. v. State Corp. Comm'n, 4 Kan. App. 2d 623, 625 (1980)
(citing SEC v. Chenery Corp., 318 U.S. 80 (1943)). The Commission, just as a
state or federal court, has a duty to construe its authority so as to avoid
constitutional problems. See National Compressed Steel Corp. v. Unified Gov. of
Wyandotte County, 38 P.3d 723, 732 (Kan. 2002) ("statutes should be construed to
avoid constitutional problems"); Edward J. DeBartolo Corp. v. Florida Gulf Coast
Bldg. & Constr. Trades Council, 485 U.S. 568, 575 (1988) ("[W]here an otherwise
acceptable construction of a statute would raise serious constitutional
problems, the Court will construe the statute to avoid such problems unless such
construction is plainly contrary to the intent of Congress."); M.S.W., Inc.
Board of Zoning Appeals of Marion County, 29 Kan. App. 2d 139, 152 (2001) ("In
order to avoid violation of constitutional provisions preventing the taking of
private property without compensation, zoning ordinances must permit
continuation of nonconforming uses in existence at the time of their
enactment.")

Accordingly, should Order 55 be left unmodified, the Commission would be
unlawfully glossing over serious constitutional issues. There has been no
attempt to resolve those issues, much less explanations as to how the Commission
is using its authority to avoid them, as is its duty. The Commission's Order is
thus legally deficient on grounds that the Commission has failed to consider
thoroughly all of the relevant legal issues. See K.S.A. (S) 77-621(c)(1); see
also National Wildlife Fed'n v. ICC, 850 F.2d 694, 708 (D.C. Cir. 1988) ("[W]e
find the Commission's analysis of the takings issue raised by Ms. Beres
insufficient to support its conclusion ... [a] remand for further
consideration is therefore in order."). Rather than creating serious
constitutional difficulties without discussion, the Commission should revise its
Order so that it does not impair Protection One's contractual arrangements.

<PAGE>

II. ABROGATION OF PROTECTION ONE'S CONTRACTS EXCEEDS THE COMMISSION'S
AUTHORITY.

Although Order 55 is unconstitutional as currently framed, the Commission
need not necessarily reach that issue at this time. It may instead grant this
Petition on alternative statutory grounds.

Naturally, the Commission has a paramount duty to abide by the federal
constitution. Put simply, "[n]o state legislator or executive or judicial
officer" can "fail to adhere to the Constitution" without "violating his
undertaking to support it." Cooper v. Aaron, 358 U.S. 1, 18 (1958). Under both
the Oath Clause and the Supremacy Clause, state officials have a duty to follow
the United States Constitution in preference to any other obligations, including
any unconstitutional state statute or state constitutional provision mandating
the contrary. See, e.g., Meredith v. Fair, 328 F.2d 586 (5th Cir. 1962); see
also Howlett v. Rose, 496 U.S. 356, 367 (1990) ("The laws of the United States
are laws in the several States, and just as much binding on the citizens and
courts thereof as the State laws are.") (quoting Claflin v. Houseman, 93 U.S.
130, 136-37 (1876)). Similar obligations are imposed by Kansas statute. See
K.S.A. (S) 77-621(c)(1) (noting the unlawfulness of agency action if
unconstitutional on its face or as applied).

Fortunately, no such tensions arise in this case, because Kansas law also
supports the revision of Order 55 along the lines suggested by Protection One.
The Commission should accordingly revise its Order, taking into account the
statutory bounds on its authority.

A. The Commission Lacks Authority To Abrogate Utilities' Contractual
Arrangements.

Kansas law provides no specific statutory authority for impairing
Protection One's contracts with Westar Energy or Westar Industries. Apparently
recognizing this fact, the Commission has cited its broad and general authority
over electric utilities. See, e.g., Order No. 51 at (P) 54 (citing K.S.A. (S)(S)
6-101, et seq.). Unquestionably, the statutory provisions on which

<PAGE>

Order 55 relies grant wide powers. But they do not give the Commission unlimited
powers to abrogate lawful private contracts.

K.S.A.(S) 66-101 states that the Commission "is given full power, authority
and jurisdiction to supervise and control the electric public utilities . . .
doing business in Kansas, and is empowered to do all things necessary and
convenient for the exercise of such power, authority and jurisdiction."
K.S.A.(S) 66-101 (emphasis added); see also K.S.A.(S) 66-101(h) (giving the
Commission supervisory authority over all electric public utilities doing
business in Kansas). The statute's focus on "necessary and convenient" echoes
the "necessary and proper" clause of the federal Constitution and its associated
jurisprudential history dating back to Chief Justice Marshall's decision in
Marbury v. Madison, 5 U.S. (1 Cranch) 137, 176 (1803). Although this
jurisprudence is often debated, it is clear and undisputable that a measure is
neither "necessary," "proper," nor "convenient," when it is proscribed by the
Constitution. Cf. State ex rel. Tomasic v. Kansas City, 230 Kan. 404, 417 (1981)
("the legislature and the people have the right to assume that public officials
will exercise their express and implied powers fairly, honestly and
reasonably"). Put simply, the Commission has no authority to violate the
Constitution. See Malone Oil Co. v. Department of Health & Env't, 234 Kan. 1066,
1068 (1984) (agency action "to be valid must be appropriate, reasonable and not
inconsistent with the law").

Moreover, it is equally clear that absent specific statutory authorization,
an agency's action "cannot stand." Michigan v. EPA, 268 F.3d 1075, 1081 (D.C.
Cir. 2001). Kansas courts have thus consistently recognized that
"[a]dministrative agencies are creatures of statute and their power is dependent
upon authorizing statutes, therefore any exercise of authority claimed by the
agency must come from within the statutes." American Trust Adm'rs, Inc. v.
Sebelius, 44 P.3d 1253, 1257 (Kan. 2002); State ex rel. Brant v. Bank of
America, 272 Kan. 182, 185 (2001)

<PAGE>

("administrative agencies . . . , as creatures of statute, may only act within
the scope of authority granted by authorizing statutes"). Such delegated
authority should not be "lightly presumed." Michigan v. EPA, 268 F.3d at 1082.
"Were courts to presume a delegation of power . . . agencies would enjoy
virtually limitless hegemony." Id. (quoting Ethyl Corp. v. EPA, 51 F.3d 1053,
1060 (D.C. Cir. 1995)).

Here, while the Kansas legislature delegated to the Commission broad powers
to supervise and control electric public utilities, it did not (and, indeed,
could not) grant the Commission authority to abrogate legally-binding contracts
that were lawful when entered. Indeed, precisely because the Commission has such
broad powers (including the express powers to engage in ratemaking, control
dividends, and limit prospectively contracts that Kansas utilities might enter),
it is clear that the Kansas legislature did not intend for the Commission to
have the entirely unnecessary power of abrogating pre-existing, legally-binding
contracts. As the U.S. Supreme Court has noted, deciding what "will or will not
be sacrificed" to the "achievement of a particular objective" is "the very
essence of legislative choice" and it "frustrates rather than effectuates
legislative intent simplistically to assume that whatever furthers the statute's
primary objective must be the law." Rodriguez v. United States, 480 U.S. 522,
528 (1987). Accordingly, "[w]here there is a complete and legislated procedure,"
there is "no room" for agencies to further broaden their mandates by invoking
inherent powers. Acosta v. National Beef Packing Co., 44 P.3d 330, 339 (Kan.
2002)

While the Kansas courts have never dealt explicitly with a case where, as
here, the Commission has attempted to shift the substantive benefits of multiple
utility contracts, courts have examined the Commission's limited authority to
revise rate contracts. It stands to reason that the Commission's power is at its
highest in this context because the Commission's primary

<PAGE>

responsibility is to ensure just and reasonable rates. See K.S.A. (S) 66-101(b).
Even in that context, however, where the Commission's authority is at its
zenith, the Commission does not enjoy unlimited powers to reformulate standing
contracts. As the Kansas Supreme Court explained long ago, contracts are
"protected from impairment by the federal Constitution and by the Kansas Bill of
Rights." Wichita R.R. & Light Co. v. Court of Indus. Relations, 214 P. 797, 803
(Kan. 1923). Accordingly, the Commission cannot waive contracts aside "by simply
invoking the convenient apologetics of the police power." Id. (quoting Kansas
City S. Ry. v. Kaw Valley Dist., 233 U.S. 75, 79 (1914) (Holmes, J.)). Courts
have continued to apply this doctrine limiting the Commission's authority to
abrogate rate contracts, as the Commission itself has recognized. See, e.g.,
Central Kansas Power Co. v. State Corp. Comm'n, 81 Kan. 817 (1957); Western
Distrib. Co. v. City of Mulvane, 116 Kan. 472 (1924); see also Re: Long Term
Contracts, Docket No. 99-GIMT-706-GIT, 2000 WL 342221, at (P) 46 (2000).

In light of the demanding standard for abrogating rate contracts (which
arguably fall within the Commission's primary responsibility), the standard for
abrogating non-rate contracts is even more demanding. When non-rate contracts
are at issue, the nexus between the contract and the Commission's delegated
authority is far more attenuated. Accordingly, the Kansas courts have held that
state agencies have no authority to extend arbitrarily the duration of a public
service company's contract. See Welsbach St. Lighting Co. v. Public Utils.
Comm'n, 101 Kan. 774 (1917). Similarly, Kansas courts have been unwilling to
interfere with private lease agreements between public utilities. See Farmers
Coop. Grain and Supply Co. v. Chicago, Rock Island & Pac. R.R. Co., 33 P.2d 170
(Kan. 1934). As the courts have explained, "not every contract" involving public
utilities may be "disturbed by the regulatory body of the state." Id.

<PAGE>

B. Even If The Commission Had Authority To Abrogate Utilities'
Contractual Arrangments, Order 55 Lacks Record Support.

In any event, even if the Commission had legal authority supporting its
decision to abrogate Protection One's lawful contracts, the Commission should
still revise its Order because it lacks record support. See K.S.A. (S)
77-621(c)(7). Under Kansas administrative law, agency action is per se arbitrary
and capricious if it is not "supported by substantial competent evidence." Sokol
v. State Dep't of Soc. and Rehab. Servs., 267 Kan. 740, 746 (1999). As the
Kansas Supreme Court has warned, unless agency actions are "supported by
findings of fact for which there is evidence in the record," agency expertise,
"the strength of modern government, can become a monster which rules with no
practical limits on its discretion." Zinke & Trumbo, Ltd. v. State Corp. Comm'n,
242 Kan. 470, 475 (1988) (quoting Burlington Truck Lines v. United States, 371
U.S. 156, 167 (1962)).

Here, however, neither the Tax-Sharing Agreement, nor the Senior Credit
Facility, nor the Outsourcing Agreement, will have any established, negative
impacts on Westar Energy's ratepayers. Even assuming (incorrectly) that the
contracts drain resources from Westar Energy, the Commission can ensure that
this drain does not become a funnel from the pockets of the Kansas energy
consumer. See K.S.A. (S)(S) 66-101, et seq. In fact, the Commission has
authority to establish rates based on a hypothetical capital structure to ensure
that the ratepayers do not bear the burdens of paying for certain debt, as it
did in recent rate cases involving Westar Energy. See In re Application Of
Western Resources, Inc. For Approval To Make Certain Changes For Its Charges For
Electric Service, Docket No. 01-WSRE-436-RTS, Order on Rate Applications, (P) 34
(July 25, 2001) (noting that "the apparent capital structure of the standalone
electric utility is not generally an appropriate one to use for ratemaking
purposes, and that the preferred approach [is] to determine a hypothetical
capital structure"). Indeed, the Commission

<PAGE>

has acknowledged that its control over ratemaking ensures that any burdens from
"excess" Westar Energy indebtedness are not felt by Kansas ratepayers. See Order
No. 51 at (P) 98.

Moreover, to Protection One's knowledge, there is no record evidence,
nor has any party seriously contended, that the affected Protection One
contracts are impairing the quality or reliability of Westar Energy's service to
ratepayers. The most that the Commission has ever said is that Westar Energy's
cost of borrowing has increased (or not decreased as much as the Commission
would have expected in this economic climate) as a result of the greater debt.
But increased borrowing costs are not a result of the Protection One contracts.
Moreover, any increase in borrowing costs can be addressed through the
Commission's authority to control rates and limit dividend payments. See K.S.A.
(S)(S) 66-101, 66-1214.

In summary, no record evidence of which Protection One is aware shows
that higher Westar Energy borrowing costs have resulted in higher rates; no
record evidence shows that the Commission lacks ratemaking authority to prevent
Westar Energy from passing-through such higher costs (if any) to customers; no
record evidence shows that Westar Energy's borrowing costs are, in fact, higher
due to the Protection One contracts; no record evidence shows impairment of
service; and no record evidence shows the Protection One contracts are causing
any harm to the public. But without such evidence, Order 55 cannot withstand
scrutiny.

C. Even If The Commission Had Authority To Abrogate Utilities'
Contractual Arrangements, It Should Decline To Exercise It.

More fundamentally, even if cures were available for Order 55's legal
deficiencies (they are not), the Commission should still, for sound policy
reasons, renounce any efforts to abrogate lawful contracts. Over the longer
term, the Commission has strong interests in seeing that Kansas utilities are
not disabled from being reliable contracting partners. History shows that
depriving individuals or entities of the capacity to enter into binding
agreements inevitably

<PAGE>

harms the public. See, e.g., Bruno Leoni, Freedom and the Law 143 (1972). Here,
should the Commission continue to assert the right to abrogate agreements that
were lawful when entered, it could seriously weaken Kansas utilities' ability to
serve their Kansas customers effectively. In particular, third-party creditors
and suppliers may well decline to enter contracts with Kansas utilities if those
contracts are later subject to Commission abrogation.

One case in point is Southern California Edison's recent difficulties
in obtaining an investment-grade credit rating. These difficulties have been
principally caused by the market's skepticism about the reliability of the
California Public Utility Commission's regulatory regime. According to a leading
credit-rating firm, Southern California Edison's crediting rating has remained
low because of "continuing regulatory and political uncertainties." Foster
Electric Report, Report No. 269, 2002 WL 6859436 (Aug. 14, 2002) ("Despite
Southern California Edison Co.'s ... improving credit strength, on 8/7/02
Standard & Poor's ... lowered to non-investment grade -- or "junk" grade -- two
California power projects [because of] regulatory and political uncertainties
looming over SoCal Edison"); Platts Energy Business & Technology, v. 4 n.6, 2002
WL 23501121 (Oct. 1, 2002) (noting that despite upgrading Southern California
Edison's debt ratings, Standard & Poor's concluded that "the continuing
regulatory and political uncertainties that dominate the credit profile for
[SoCal Edison] can no longer support an investment grade rating"). In short,
regulatory uncertainty has directly harmed California's utilities, entailing
adverse consequences for California ratepayers.

Should the Commission continue to assert authority to abrogate utility
contracts, Kansas utilities and consumers may begin to suffer the fate of their
California counterparts. Specifically, Kansas utilities' contracts, including
credit arrangements, will likely be concluded on less favorable terms for Kansas
utilities and, ultimately, their customers. In the end, the

<PAGE>

Commission's efforts to "restore [Westar Energy] to financial health," Order No.
51 at (P) 20, and to avoid "the potential for harm to ratepayers and the public
interest," id., will have the exact opposite effects from those the Commission
intended. Cf. Order No. 51 at (P) 43 (noting Commission's goal of restoring
Westar Energy to "a bond rating comparable to utilities facing similar
utility-related risks").

III. APPLICATION OF ORDER 55 TO THE PROTECTION ONE CONTRACTS WITH WESTAR
ENERGY WOULD UNLAWFULLY UNDERMINE THE COMMISSION'S GOALS FOR WESTAR
ENERGY'S CAPITAL STRUCTURE.

Protection One shares many of the Commission's goals articulated in
Order 55. But, if implemented without modification, that Order would not only
undermine these goals, it will likely make achieving them impossible. This
mismatch is contrary to the Commission's intentions. It also renders Order 55
legally improper, by putting the Order's stated goals at odds with the
requirements it imposes on Westar Energy.

The Kansas Act for Judicial Review and Civil Enforcement of Agency
Actions prohibits state agencies from taking action unsupported by substantial,
competent evidence, see K.S.A. (S) 77-621(c)(7), or "otherwise unreasonable,
arbitrary or capricious," K.S.A. (S) 77-621(c)(8). When reviewing agency action,
Kansas courts regularly seek guidance from federal court interpretations of the
federal Administrative Procedure Act. See, e.g., Reiter v. City of Beloit, 263
Kan. 74, 93 (1997) (acknowledging that federal statutes are helpful when
interpreting similarly-worded Kansas statutes); Imler v. Southwestern Bell Tel.
Co., 8 Kan. App. 2d 71, 74 (1982) (noting that "the scope of review applied in
federal courts is substantially identical to that prevailing in the courts of
Kansas"); see also Stock v. Nordhus, 216 Kan. 779, 782 (1975) ("[t]raditionally,
we have followed federal interpretation of federal procedural rules after which
our own have been patterned"). Significantly, it is settled under federal law
that an agency "must articulate a satisfactory explanation for its action
including a rational connection between the

<PAGE>

facts found and the choice made." Kansas v. United States, 249 F.3d 1213,
1228-29 (10th Cir. 2001) (quoting Motor Vehicle Mfrs. Ass'n v. State Farm Mut.
Auto. Ins., 463 U.S. 29, 43 (1983)). An agency decision that is inconsistent
with its own stated goals cannot stand-- "[r]ational decisionmaking ... dictates
that [an] agency simply cannot employ means that actually undercut its own
purported goals." Office of Communication of the United Church of Christ v. FCC,
779 F.2d 702, 707 (D.C. Cir. 1985).

Consistent with these bedrock principles, Kansas administrative
procedure requires a reasonable fit between the Commission's goals and the means
used to achieve those goals. In this regard, the Kansas Supreme Court has held
agency action is "unreasonable" if it is "taken without regard to the benefit or
harm to all interested parties." Zinke & Trumbo, Ltd. v. State Corp. Comm'n, 242
Kan. 470, 474-75 (1988); accord Combined Inv. Co. v. Board of County Comm'rs,
227 Kan. 17, 24 (1980).

Here, abrogating the agreements between Westar Energy and Protection
One would undermine -- rather than advance -- the Commission's goals for Westar
Energy's capital structure. In particular, requiring Westar Energy to abrogate
its contracts would disserve the Commission's goals by, on one hand, diminishing
the value of Protection One as a viable, ongoing (and salable) business and, on
the other, rendering Westar Energy liable to Protection One for damages. Order
55 thus promises to weaken Westar Energy's finances instead of strengthening
them.

A. Abrogating Protection One's Contracts Would Undermine The
Commission's Goals By Weakening Westar Energy's Financial Position.

It bears mention at the outset that Order 55 misunderstands the nature
of the Protection One agreements, including specifically the Tax-Sharing
Agreement, which the Commission has mistakenly suggested contributes to Westar
Energy's debt. This assumption is wrong, for three

<PAGE>

basic reasons. First, the Tax-Sharing Agreement does not siphon funds from
regulated utilities to Protection One. Instead, it merely returns to Protection
One the value of the tax benefit accruing to Westar Energy by virtue of Westar
Energy filing a consolidated tax return with Protection One. Second, the
Tax-Sharing Agreement does grant Westar Energy (and by extension the utilities)
significant benefits. Specifically, Westar Energy has been able to take
advantage of Protection One's tax losses throughout the 2002 tax year, while
obliging itself to pay those savings to Protection One only at the end of the
tax year. Westar Energy has thus benefited from the time value of the tax
losses. Third, the Tax-Sharing Agreement is not associated with debt. Order 55
states that there is a "mismatch of burden and benefit" under the Tax-Sharing
Agreement; in fact, however, the Tax-Sharing Agreement only provides Protection
One with remuneration for tax losses used by Westar Energy to which Westar
Energy would not otherwise be entitled. Cf. Order No. 55 at (P) 73. The
Agreement is thus "matched" with taxable profits, not debt.

More fundamentally, abrogating Protection One's contracts would be
self-defeating because it could place Protection One in a potentially precarious
financial position. Published reports state that Westar Energy intends to sell
its interest in Protection One "to pay down debt." Westar CEO: KCC Order Went
Too Far, The Topeka Capital-journal (Jan. 6, 2003) (available at
http://cjonline.com/stories/010703/bus_haines.shtml). (A copy of this article is
included at Attachment C.) It is therefore in no one's best interest to create a
situation that would make it much more difficult for such a sale to occur, or to
lessen the expected proceeds from a sale. There is little doubt that, for Westar
Energy to sell its ownership stake in the company for the best possible price,
Protection One must be a viable, going concern. There is also little doubt that
the value to a buyer will be undercut if Order 55 creates liquidity or other

<PAGE>

financial problems. Westar Energy's stated intention, consistent with the
Commission's desires, to sell Protection One places the Commission's interest
squarely on the side of maximizing Protection One's value in the eyes of
prospective buyers and public equity markets. The revisions requested for Order
55 are thus essential to ensuring that the Commission lawfully promotes --
rather than unlawfully undermines -- this interest.

B. Abrogating Protection One's Contracts Would Subject Westar Energy
To Liability For Contract Damages.

Besides placing Protection One in a precarious financial position,
abrogating Protection One's contracts would also make Westar Energy liable for
contract damages. It has long been recognized that "where a contract is lawful
when made, and a subsequent enactment renders performance of it unlawful,
neither party shall be prejudiced." Louisville & N.R. Co. v. Crowe, 160 S.W.
759, 760 (Ky. 1913). Accordingly, a party may not take "the property of another
under a promise to pay for it," but "not pay for it," even if "by reason of an
enactment of law after the contract is made, such party is prohibited from
making payment." Id. Under these circumstances, where "consideration has not
been fully paid," a party must "pay for it upon equitable terms." Id. Indeed, as
courts have long recognized, even when contracts are "subject to the reserved
authority in the State to modify them in the interest of the public welfare," a
party "suffering loss" as a result of such modification is entitled to recover
compensation. Bond Bros. v. Louisville & Jefferson County Metro. Sewer Dist.,
211 S.W.2d 867, 874 (Ky. 1948). "It jars unpleasantly on one's sense of justice"
to allow a government agency to "destroy or confiscate [a party's] property for
the benefit and advantage" of another party. Schiller Piano Co. v. Illinois N.
Utils. Co., 123 N.E. 631, 633 (Ill. 1919) (holding that the Public Utilities Act
could not be interpreted to destroy plaintiff's private contract rights).

<PAGE>

These venerable principles of the common law form the backdrop for the
equally long-standing Kansas rule that a contracting party may be held liable
for breach, even when performance under a contract has become unlawful. See
Smith v. Missouri State Life Ins. Co., 7 P.2d 65, 67 (Kan. 1932) ("[W]here a
person by an express contract obligates himself absolutely to do an act not
impossible or unlawful at the time, neither inevitable accident nor any other
unforeseen contingency will excuse him"). An administrative order preventing a
party from performing under a contract is not a valid excuse for nonperformance
when the order preventing performance might reasonably "have been provided
against" by the contracting party. Western Drug Supply & Specialty Co. v. Board
of Admin., 187 P. 701, 703 (Kan. 1920). As commentators have recognized,
"[c]ontracting parties owe a duty to take all steps reasonably necessary to
ensure performance," including preventing interference with performance by
third-parties. CORBIN ON CONTRACTS (S) 76.4 (Revised ed. 2002). Hence, "if the
legal proceedings interfering with performance of the promise are in any way due
to the fault of the promisor . . . the interference should constitute no defense
. . . because the impossibility is primarily due to the promisor's own fault."
WILLISTON ON CONTRACTS (S) 1939 (3d ed. 1978). As Judge Posner puts it, where
administrative orders "might have reasonably been foreseen and guarded against,"
the contracting party must abide by the consequences, including payment of
damages for breach. Western Drug Supply, 187 P. at 704; see also Northern
Indiana Pub. Serv. Co. v. Carbon County Coal Co., 799 F.2d 265, 278 (7th Cir.
1986) (Posner, J.) (noting that "[g]overnment these days is a pervasive factor
in the economy" and refusing to excuse performance even though state commission
orders made the contract uneconomical).

Here, abrogation of the affected Protection One contracts would require
that Westar Energy pay Protection One appropriate compensation. Westar Energy
has obtained valuable

<PAGE>

benefits from Protection One under all these agreements-- and may not now simply
walk away from them. Moreover, the severe and unprecedented nature of Order 55
undoubtedly is attributable, in significant part, to the Commission's perception
of Westar Energy's conduct. See, e.g., Order No. 55 at (P) 32; Order No. 51 at
(P) 18. Accordingly, even if the Commission ultimately succeeds in abrogating
Protection One's contracts, Westar Energy will remain responsible to Protection
One for damages-- thereby, undermining any claim that these abrogations will
conserve cash on the Westar Energy books. Once again, allowing Order 55 to stand
would undercut the Commission's clearly stated goals by weakening Westar
Energy's finances, instead of strengthening them.

IV. THE COMMISSION'S ORDER IS INVALID BECAUSE THE COMMISSION HAS FAILED TO
PROVIDE A REASONED EXPLANATION FOR ITS DECISION TO ABROGATE PROTECTION
ONE'S LAWFUL CONTRACTS.

The issues discussed above raise serious constitutional, statutory, and
administrative law concerns that should persuade the Commission partially to
stay and reconsider its Order. But even aside from their merits, the
Commission's failure to address these issues is itself per se grounds for
granting reconsideration. Kansas administrative law-- as well as the
Commission's own regulations-- requires that the Commission must "express [its]
orders and decisions in formal and explicit findings to the end that review may
be intelligent." City Serv. Gas Co. v. State Corp. Comm'n, 201 Kan. 223, 232
(1968); Gas Service Co. v. State Corporation Commission, 4 Kan. App. 2d 623, 625
(1980). Each Commission order must contain a "concise and specific statement" of
both "the relevant law" and the "basic facts which persuade the [C]ommission in
arriving at its decision." K.A.R. (S) 82-1-232(3). Kansas courts have
"repeatedly emphasized the need for clarity and completeness in basic or
essential findings on which . . . administrative orders rest." City Serv. Gas
Co., 201 Kan. at 231. Absent such clarity

<PAGE>

and completeness, it "is not possible to issue a valid order," and there is "no
official action-- only the vain show of it." Id. at 232.

Where (as here) an agency has not provided a reasoned explanation for
its decision, a reviewing court has no authority to supply such findings by
implication. See, e.g., Kansas Pub. Serv. Co. v. State Corp. Comm'n, 199 Kan.
736, 743-44 (1967) (holding a Commission order unlawful because it lacked "basic
findings of fact or conclusions of law."). In short, a court is powerless to
substitute its findings either "for those which the [C]ommission made" or for
those which "the [C]ommission failed to make." City Serv. Gas Co., 201 Kan. at
232; Water Dist. No. 1 of Johnson County v. State Water Auth., 19 Kan. App. 2d
236, 242 (1994) (noting that a "lack of expressed findings . . . may not be
supplied by implication); cf. SEC v. Chenery Corp., 332 U.S. 194, 196 (1947).

Because of the novel nature of the severe and unprecedented measures
mandated by Order 55, Kansas courts have never before had cause to address an
agency's failure to analyze an abrogation of contracts of the type presented
heren. Nonetheless, federal courts have not hesitated to invalidate agency
actions in analogous situations involving incomplete or legally erroneous agency
analysis of relevant constitutional protections for private property. In
National Wildlife Fed'n v. ICC, 850 F.2d 694 (D.C. Cir. 1988), for example, the
D.C. Circuit struck down Interstate Commerce Commission orders and remanded for
further consideration because the agency's "analysis" of the constitutional
issues raised by one of the parties was insufficient to "support its conclusion"
that rules implementing the national "rails-to-trails" program would not
infringe private property interests. Id. at 708 (emphasis added). As the D.C.
Circuit emphasized, the agency could not "sidestep th[e] cumbersome inquiry into
the effect of its Rules on [private]

<PAGE>

property rights . . . by stressing that the Rules serve[d] an important rail
regulatory purpose, namely, the preservation of rail transportation corridors
for future rail use." Id. at 706.

Here, the Commission's Order has thus far failed to address the serious
concerns that abrogating Protection One's contracts (1) violate the
Constitution's Contract Clause; (2) exceed the Commission's authority; (3) lack
support in the record; and (4) arbitrarily and capriciously undermine the very
goals that the Commission states it is seeking to attain. Because the Commission
has duties to analyze these issues and provide "a concise and specific statement
of the relevant law and basic facts," Gas Service Co., 4 Kan. App. 2d at 625,
these omissions are in themselves independent grounds for a partial stay and
limited reconsideration of Order 55.

CONCLUSION

The Commission should immediately stay Order 55 as it applies to
contracts to which Protection One is a party in order to give itself time to
comply with the constitutional, statutory, and administrative procedure
requirements discussed above. After staying its Order as it applies to
Protection One, the Commission should hold oral argument on the pressing issues
covered by this Petition. Given the importance of these issues, Protection One
believes that oral argument would be helpful to the Commission. Ultimately, the
Commission should modify Order 55 so it no longer purports to abrogate or
interfere with Protection One's contractual arrangements.

Respectfully submitted,

Mitchell F. Hertz Teresa J. James
Robert R. Gasaway WALLACE, SAUNDERS,
KIRKLAND & EllIS AUSTIN, BROWN & ENOCHS
655 Fifteenth Street, N.W. 1900 Epic Center
Suite 1200 301 North Main Street
Washington, D.C. 20005 Wichita, KS 67202-4806
(202) 879-5000 (316) 369-2100

DATE: January 10, 2003

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