5 October 2000

Manhattan To Pay $10,000 To Help Fight Wichita

The Manhattan City Commission did it right. Tuesday night they voted to give $10,000 to Topeka to help in the fight for fare
Electric Rates. Here is part of a memo given to the Commission:

BACKGROUND

On September 5, 2000, the City Commission adopted Resolution No. 090500-A supporting an agreement between
Western Resources and the City of Wichita that does not disadvantage KPL customers and encourages the Kansas
Corporation Commission (KCC) to be the body that determines electric rates for KPL and KGE customers as opposed to
the Federal Energy Regulatory Commission (FERC). During City Administrationís presentation prior to approval of
Resolution No. 090500-A, it was noted that the FERC had called a settlement conference for September 6, 2000.
Unfortunately, a settlement was not reached thus necessitating a trial schedule. As a result, a hearing has been scheduled for
October 11, 2000, with a decision issued either November 6 or 7, 2000. A letter from Topeka Mayor Joan Wagnon
provides an update on the litigation and sets forth future issues.

To insure that the case on behalf of KPL customers is as strong as possible, the City of Topeka has retained two expert
economists and legal staff. Cost estimates for these services are estimated to reach $80,000 by yearís end. As the costs
continue to mount, the City of Topeka is requesting that cities and counties in the KPL region contribute to a litigation fund in
proportion to size and resources. The City of Lawrence has approved contributing up to $10,000 towards the litigation fund.
Other communities in the KPL area are considering contributions as well.

DISCUSSION

The economists employed by the City of Topeka have estimated that equalizing costs between KPL and KGE areas would
represent an increase of approximately 16 percent in the KPL area for commercial and industrial customers. For the City of
Manhattan, this increase would represent a yearly increase in electric utility costs of approximately $171,259 of which almost
$100,000 would be increased electric cost for water and wastewater operations. Because of the potential impact of a 16
percent increase on City electric costs, City Administration recommends contributing $10,000 to the litigation fund. This
amount would be taken from both the Water and Wastewater Funds.