WESTERN RESOURCES INC /KS, 10-K, 1996-03-27

WESTERN RESOURCES INC /KS
10-K, 1996-03-27
ELECTRIC & OTHER SERVICES COMBINED

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 1995

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-3523

WESTERN RESOURCES, INC.
(Exact name of registrant as specified in its charter)
KANSAS 48-0290150
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

818 KANSAS AVENUE, TOPEKA, KANSAS 66612
(Address of Principal Executive Offices) (Zip Code)

Registrant's telephone number, including area code 913/575-6300
Securities registered pursuant to Section 12(b) of the Act:
Common Stock, $5.00 par value New York Stock Exchange
(Title of each class) (Name of each exchange on which registered)

Securities registered pursuant to Section 12(g) of the Act:
Preferred Stock, 4 1/2% Series, $100 par value
(Title of Class)

Indicated by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes x No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. ( )

State the aggregate market value of the voting stock held by nonaffiliates of
the registrant. Approximately $1,897,474,000 of Common Stock and $11,398,000
of Preferred Stock (excluding the 4 1/4% Series of Preferred Stock for which
there is no readily ascertainable market value) at March 18, 1996.

Indicate the number of shares outstanding of each of the registrant's classes
of common stock.

Common Stock, $5.00 par value 63,249,141
(Class) (Outstanding at March 27, 1996)

Documents Incorporated by Reference:
Part Document
III Items 10-13 of the Company's Definitive Proxy Statement for
the Annual Meeting of Shareholders to be held May 7, 1996.
<PAGE 2>
WESTERN RESOURCES, INC.
FORM 10-K
December 31, 1995

TABLE OF CONTENTS

Description Page

PART I
Item 1. Business 3

Item 2. Properties 19

Item 3. Legal Proceedings 21

Item 4. Submission of Matters to a Vote of
Security Holders 21

PART II
Item 5. Market for Registrant's Common Equity and
Related Stockholder Matters 21

Item 6. Selected Financial Data 23

Item 7. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 24

Item 8. Financial Statements and Supplementary Data 31

Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 61

PART III
Item 10. Directors and Executive Officers of the
Registrant 61

Item 11. Executive Compensation 61

Item 12. Security Ownership of Certain Beneficial
Owners and Management 61

Item 13. Certain Relationships and Related Transactions 61

PART IV
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K 62

Signatures 66

<PAGE 3>
PART I

ITEM 1. BUSINESS

ACQUISITION AND MERGER
On March 31, 1992, Western Resources, Inc. (formerly the Kansas Power
and Light Company) (the Company) through its wholly-owned subsidiary KCA
Corporation (KCA) acquired all of the outstanding common and preferred stock
of Kansas Gas and Electric Company (KGE) (the Merger). Simultaneously, KCA and
Kansas Gas and Electric Company merged and adopted the name Kansas Gas and
Electric Company (KGE).

Additional information relating to the Merger can be found in
Management's Discussion and Analysis of Financial Condition and Results of
Operations.

GENERAL

The Company and its wholly-owned subsidiaries, include KPL, a rate
regulated electric and gas division of the Company, KGE, a rate regulated
electric utility and wholly-owned subsidiary of the Company, the Westar
companies, non-utility subsidiaries, and Mid Continent Market Center, Inc.
(Market Center), a regulated gas transmission service provider. KGE owns 47%
of Wolf Creek Nuclear Operating Corporation (WCNOC), the operating Company for
Wolf Creek Generating Station (Wolf Creek). Corporate headquarters of the
Company are located at 818 Kansas Avenue, Topeka, Kansas 66612. At December
31, 1995, the Company had 4,047 employees.

The Company is an investor-owned holding Company. The Company is engaged
principally in the production, purchase, transmission, distribution and sale
of electricity and the delivery and sale of natural gas. The Company serves
approximately 601,000 electric customers in eastern and central Kansas and
approximately 648,000 natural gas customers in Kansas and northeastern
Oklahoma. The Company's non-utility subsidiaries market natural gas primarily
to large commercial and industrial customers, provide electronic security
services, and provide other energy-related products and services. The Company
has acquired 30.8 million shares of common stock of ADT Limited, representing
approximately 24% of ADT's outstanding common shares. ADT's principal
business is providing electronic security services.

In January 1996, the KCC initiated an order for a generic investigation
to analyze matters related to the potential restructuring of the electric
industry and the overall implications to both utilities and public interests
within the State of Kansas. This order was initiated given recent
developments at the Federal Energy Regulatory Commission (FERC), other state
regulatory agencies and increased competition among utilities related to large
industrial electric customers. The order was established as a means to define
the KCC's role within the electric generation industry as it may become more
competitive, and address any developments as they may occur. Currently, there
are no proceedings or actions at the KCC which would open the Company's
current electric markets to greater competition, nor establish guidelines as
to a change in the degree of regulatory oversight that the KCC has on the
Company's operations.

<PAGE 4>
For discussion regarding competition in the electric utility industry and
the potential impact on the Company, see Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations, Other Information,
Competition.

To capitalize on opportunities in the non-regulated natural gas industry,
the Company established Market Center. Market Center, which began operations
on July 1, 1995, provides natural gas transportation, storage, and gathering
services, as well as balancing and title transfer capability. The Company
transferred certain natural gas transmission assets having a net book value of
approximately $50 million to the Market Center. Market Center will provide no
notice natural gas transportation and storage services to the Company under a
long-term contract.

The portion of the Missouri Properties purchased by Southern Union was
sold for $404 million. United Cities purchased the Company's natural gas
distribution system in and around the City of Palmyra, Missouri for $665,000.

As a result of the sales of the Missouri Properties, as described in Note
2 of the Notes to Consolidated Financial Statements, the Company recognized a
gain of approximately $19.3 million, net of tax, ($0.31 per share) and ceased
recording the results of operations for the Missouri Properties during the
first quarter of 1994. Consequently, the Company's results of operations for
the twelve months ended December 31, 1994 are not comparable to the results of
operations for the same period ending December 31, 1993.

The following table reflects, through the dates of the sales of the
Missouri Properties, the approximate operating revenues and operating income
for the years ended December 31, 1994 and 1993, and net utility plant at
December 31, 1993, related to the Missouri Properties (See Notes 2 and 3 of
the Notes to Consolidated Financial Statements included herein):

1994 1993
Percent Percent
of Total of Total
Amount Company Amount Company
(Dollars in Thousands, Unaudited)
Operating revenues. . . . . . . . . .$ 77,008 4.8% $349,749 18.3%
Operating income. . . . . . . . . . . 4,997 1.9% 20,748 7.1%
Net utility plant . . . . . . . . . . - - 296,039 6.6%

The following information includes the operations of KGE since March 31,
1992 and excludes the activities related to the Missouri Properties following
the sales of those properties in the first quarter of 1994.

<PAGE 5>
The percentages of Total Operating Revenues and Operating Income Before
Income Taxes attributable to the Company's electric and natural gas operations
for the past five years were as follows:

Total Operating Income
Operating Revenues Before Income Taxes
Year Electric Natural Gas Electric Natural Gas
1995 73% 27% 98% 2%
1994 69% 31% 97% 3%
1993 58% 42% 85% 15%
1992 57% 43% 89% 11%
1991 41% 59% 84% 16%

The difference between the percentage of electric operating revenues to
total operating revenues and the percentage of electric operating income to
total operating income as compared to the same percentages for natural gas
operations is due to the Company's level of investment in plant and its fuel
costs in each of these segments. The reduction in the percentages for the
natural gas operations in 1994 is due to the sales of the Missouri Properties.
The increase in the percentages for the electric operations in 1992 is due to
the Merger.

The amount of the Company's plant in service (net of accumulated
depreciation) at December 31, for each of the past five years was as follows:

Year Electric Natural Gas Total
(Dollars in Thousands)
1995 $3,676,576 $525,431 $4,202,007
1994 3,676,347 496,753 4,173,100
1993 3,641,154 759,619 4,400,773
1992 3,645,364 696,036 4,341,400
1991 1,080,579 628,751 1,709,330

ELECTRIC OPERATIONS

General

The Company supplies electric energy at retail to approximately 601,000
customers in 462 communities in Kansas. These include Wichita, Topeka,
Lawrence, Manhattan, Salina, and Hutchinson. The Company also supplies
electric energy at wholesale to the electric distribution systems of 67
communities and 5 rural electric cooperatives. The Company has contracts for
the sale, purchase or exchange of electricity with other utilities. The
Company also receives a limited amount of electricity through parallel
generation.

<PAGE 6>
The Company's electric sales for the last five years were as follows
(includes KGE since March 31, 1992):

1995 1994 1993 1992 1991
(Thousands of MWH)
Residential 5,088 5,003 4,960 3,842 2,556
Commercial 5,453 5,368 5,100 4,473 3,051
Industrial 5,619 5,410 5,301 4,419 1,947
Wholesale and
Interchange 4,012 3,899 4,525 3,028 1,669
Other 108 106 103 91 315*
Total 20,280 19,786 19,989 15,853 9,538*

* Includes cumulative effect to January 1, 1991, of a change in revenue
recognition. The cumulative effect of this change increased electric
sales by 256,000 MWH for 1991.

The Company's electric revenues for the last five years were as follows
(includes KGE since March 31, 1992):

1995 1994 1993 1992 1991
(Dollars in Thousands)
Residential $ 396,025 $ 388,271 $ 384,618 $296,917 $160,831
Commercial 340,819 334,059 319,686 271,303 149,152
Industrial 268,947 265,838 261,898 211,593 78,138
Wholesale and
Interchange 104,992 106,243 118,401 98,183 70,262
Other 35,112 27,370 19,934 4,889 13,456
Total $1,145,895 $1,121,781 $1,104,537 $882,885 $471,839

Capacity

The aggregate net generating capacity of the Company's system is presently
5,240 megawatts (MW). The system comprises interests in 22 fossil fueled
steam generating units, one nuclear generating unit (47% interest), seven
combustion peaking turbines and one diesel generator located at eleven
generating stations. Two units of the 22 fossil fueled units (aggregating 100
MW of capacity) have been "mothballed" for future use (See Item 2.
Properties).

The Company's 1995 peak system net load occurred August 28, 1995 and
amounted to 3,979 MW. The Company's net generating capacity together with
power available from firm interchange and purchase contracts, provided a
capacity margin of approximately 19% above system peak responsibility at the
time of the peak.

The Company and ten companies in Kansas and western Missouri have agreed
to provide capacity (including margin), emergency and economy services for
each other. This arrangement is called the MOKAN Power Pool. The pool
participants also coordinate the planning of electric generating and
transmission facilities.
<PAGE 7>
The Company is one of 47 members of the Southwest Power Pool (SPP). SPP's
responsibility is to maintain system reliability on a regional basis. The
region encompasses areas within the eight states of Kansas, Missouri,
Oklahoma, New Mexico, Texas, Louisiana, Arkansas, and Mississippi.

In 1994, the Company joined the Western Systems Power Pool (WSPP). Under
this arrangement, over 103 electric utilities and marketers throughout the
western United States have agreed to market energy and to provide transmission
services. WSPP's intent is to increase the efficiency of the interconnected
power systems operations over and above existing operations. Services
available include short-term and long-term economy energy transactions, unit
commitment service, firm capacity and energy sales, energy exchanges, and
transmission service by intermediate systems.

In January 1994, the Company entered into an agreement with Oklahoma
Municipal Power Authority (OMPA), whereby, the Company received a prepayment
of approximately $41 million for capacity (42 MW) and transmission charges
through the year 2013.

During 1994, KGE entered into an agreement with Midwest Energy, Inc.
(MWE), whereby KGE will provide MWE with peaking capacity of 61 MW through the
year 2008. KGE also entered into an agreement with Empire District Electric
Company (Empire), whereby KGE will provide Empire with peaking and base load
capacity (20 MW in 1994 increasing to 80 MW in 2000) through the year 2000.
In January 1995, the Company entered into another agreement with Empire,
whereby the Company will provide Empire with peaking and base load capacity
(10 MW in 1995 increasing to 162 MW in 2000) through the year 2010.

Future Capacity

The Company does not contemplate any significant expenditures in
connection with construction of any major generating facilities through the
turn of the century (See Item 7. Management's Discussion and Analysis,
Liquidity and Capital Resources). Although the Company's management believes,
based on current load-growth projections and load management programs, it will
maintain adequate capacity margins through 2000, in view of the lead time
required to construct large operating facilities, the Company may be required
before 2000 to consider whether to reschedule the construction of Jeffrey
Energy Center (JEC) Unit 4 or alternatively either build or acquire other
capacity.

Fuel Mix

The Company's coal-fired units comprise 3,242 MW of the total 5,240 MW of
generating capacity and the Company's nuclear unit provides 548 MW of
capacity. Of the remaining 1,450 MW of generating capacity, units that can
burn either natural gas or oil account for 1,369 MW, and the remaining units
which burn only oil or diesel fuel account for 81 MW (See Item 2. Properties).

During 1995, low sulfur coal was used to produce 74% of the Company's
electricity. Nuclear produced 21% and the remainder was produced from natural
gas, oil, or diesel fuel. During 1996, based on the Company's estimate of the
availability of fuel, coal will be used to produce approximately 79% of the
Company's electricity and nuclear will be used to produce approximately 16%.
<PAGE 8>
The Company's fuel mix fluctuates with the operation of nuclear powered
Wolf Creek which has an 18-month refueling and maintenance schedule. The
18-month schedule permits uninterrupted operation every third calendar year.
Wolf Creek was taken off-line on February 3, 1996 for its eighth refueling and
maintenance outage. The outage is expected to last approximately 60 days
during which time electric demand will be met primarily by the Company's
coal-fired operating units.

Nuclear

The owners of Wolf Creek have on hand or under contract 75% of the uranium
required for operation of Wolf Creek through the year 2003. The balance is
expected to be obtained through spot market and contract purchases. The
Company has contracts with the following three suppliers for uranium: Cameco,
Geomex Minerals, Inc., and Power Resources, Inc.

The Company has three contracts for uranium enrichment performed by
USEC, Urenco and Nuexco Trading Corp. These contractual arrangements cover
100% of Wolf Creek's uranium enrichment requirements for 1996-1997, 90% for
1998-1999, 95% for 2000-2001, and 100% for 2005-2014. The balance of the
1998-2005 requirements is expected to be obtained through a combination of
spot market and contract purchases. The decision not to contract for the full
enrichment requirements is one of cost rather than availability of service.

A contractual arrangement is in place with Cameco for the conversion of
uranium to uranium hexafluoride sufficient to meet Wolf Creek's requirements
through the year 2000.

The Company has entered into all of its uranium, uranium enrichment and
uranium hexaflouride arrangements during the ordinary course of business and
is not substantially dependent upon these agreements. The Company believes
there are other suppliers and plentiful sources available at reasonable prices
to replace, if necessary, these contracts. In the event that the Company were
required to replace these contracts, it would not anticipate a substantial
disruption of its business.

The Nuclear Waste Policy Act of 1982 established schedules, guidelines and
responsibilities for the Department of Energy (DOE) to develop and construct
repositories for the ultimate disposal of spent fuel and high-level waste.
The DOE has not yet constructed a high-level waste disposal site and has
announced that a permanent storage facility may not be in operation prior to
2010 although an interim storage facility may be available earlier. Wolf
Creek contains an on-site spent fuel storage facility which, under current
regulatory guidelines, provides space for the storage of spent fuel through
2006 while still maintaining full core off-load capability. The Company
believes adequate additional storage space can be obtained as necessary.

Additional information with respect to insurance coverage applicable to
the operations of the Company's nuclear generating facility is set forth in
Note 5 of the Notes to Consolidated Financial Statements.

Coal

The three coal-fired units at JEC have an aggregate capacity of 1,795 MW
(Company's 84% share) (See Item 2. Properties). The Company has a long-term
coal supply contract with Amax Coal West, Inc. (AMAX), a subsidiary of Cyprus
<PAGE 9>
Amax Coal Company, to supply low sulfur coal to JEC from AMAX's Eagle Butte
Mine or an alternate mine source of AMAX's Belle Ayr Mine, both located in the
Powder River Basin in Campbell County, Wyoming. The contract expires December
31, 2020. The contract contains a schedule of minimum annual delivery
quantities based on MMBtu provisions. The coal to be supplied is surface
mined and has an average Btu content of approximately 8,300 Btu per pound and
an average sulfur content of .43 lbs/MMBtu (See Environmental Matters). The
average delivered cost of coal for JEC was approximately $1.13 per MMBtu or
$18.54 per ton during 1995.

Coal is transported from Wyoming under a long-term rail transportation
contract with Burlington Northern (BN) and Union Pacific (UP) to JEC through
December 31, 2013. Rates are based on net load carrying capabilities of each
rail car. The Company provides 890 aluminum rail cars, under a 20 year lease,
to transport coal to JEC.

The two coal-fired units at La Cygne Station have an aggregate generating
capacity of 672 MW (KGE's 50% share) (See Item 2. Properties). The operator,
Kansas City Power & Light Company (KCPL), maintains coal contracts summarized
in the following paragraphs.

La Cygne 1 uses low sulfur Powder River Basin coal which is supplied under
a variety of spot market transactions, discussed below. Illinois or
Kansas/Missouri coal is blended with the Powder River Basin coal and is
secured from time to time under spot market arrangements. La Cygne 1 uses a
blend of 85% Powder River Basin coal.

La Cygne 2 and additional La Cygne 1 Powder River Basin coal is supplied
through several contracts, expiring at various times through 1998. This low
sulfur coal had an average Btu content of approximately 8,500 Btu per pound
and a maximum sulfur content of .50 lbs/MMBtu (See Environmental Matters).
For 1996, KCPL has secured Powder River Basin coal from Powder River Coal
Company, a subsidiary of Peabody Coal Company. Transportation is covered by
KCPL through its Omnibus Rail Transportation Agreement with BN and Kansas City
Southern Railroad (KCS) through December 31, 2000.

During 1995, the average delivered cost of all local and Powder River
Basin coal procured for La Cygne 1 was approximately $0.88 per MMBtu or $15.31
per ton and the average delivered cost of Powder River Basin coal for La Cygne
2 was approximately $0.75 per MMBtu or $12.56 per ton.

The coal-fired units located at the Tecumseh and Lawrence Energy Centers
have an aggregate generating capacity of 775 MW (See Item 2. Properties). The
Company contracted with Cyprus Amax Coal Company's Foidel Creek Mine located
in Routt County, Colorado for low sulfur coal through December 31, 1998.
During 1995, the average delivered cost of coal for the Lawrence units was
approximately $1.18 per MMBtu or $26.19 per ton and the average delivered cost
of coal for the Tecumseh units was approximately $1.17 per MMBtu or $26.14 per
ton. This coal is transported by Southern Pacific Lines and Atchison, Topeka
and Santa Fe Railway Company under a contract expiring December 31, 1998. The
coal supplied from Cyprus has an average Btu content of approximately 11,200
Btu per pound and an average sulfur content of .38 lbs/MMBtu (See
Environmental Matters). The Company anticipates that the Cyprus agreement
will supply the minimum requirements of the Tecumseh and Lawrence Energy
Centers and supplemental coal requirements will continue to be supplied from
coal markets in Wyoming, Utah, Colorado and/or New Mexico.

<PAGE 10>
The Company has entered into all of its coal and transportation contracts
during the ordinary course of business and is not substantially dependent upon
these contracts. The Company believes there are other suppliers for and
plentiful sources of coal available at reasonable prices to replace, if
necessary, fuel to be supplied pursuant to these contracts. In the event that
the Company were required to replace its coal or transportation agreements, it
would not anticipate a substantial disruption of the Company's business.

Natural Gas

The Company uses natural gas as a primary fuel in its Gordon Evans, Murray
Gill, Abilene, and Hutchinson Energy Centers and in the gas turbine units at
its Tecumseh generating station. Natural gas is also used as a supplemental
fuel in the coal-fired units at the Lawrence and Tecumseh generating stations.
Natural gas for Gordon Evans and Murray Gill Energy Centers is supplied by
readily available gas from the spot market. Short-term economical spot market
purchases will supply the system with the flexible natural gas supply to meet
operational needs for the Gordon Evans and Murray Gill Energy Centers.
Natural gas for the Company's Abilene and Hutchinson stations is supplied from
the Company's main system (See Natural Gas Operations).

Oil

The Company uses oil as an alternate fuel when economical or when
interruptions to natural gas make it necessary. Oil is also used as a
supplemental fuel at JEC and La Cygne generating stations. All oil burned by
the Company during the past several years has been obtained by spot market
purchases. At December 31, 1995, the Company had approximately 3 million
gallons of No. 2 and 14 million gallons of No. 6 oil which is believed to be
sufficient to meet emergency requirements and protect against lack of
availability of natural gas and/or the loss of a large generating unit.

Other Fuel Matters

The Company's contracts to supply fuel for its coal and natural gas-fired
generating units, with the exception of JEC, do not provide full fuel
requirements at the various stations. Supplemental fuel is procured on the
spot market to provide operational flexibility and, when the price is
favorable, to take advantage of economic opportunities.

Set forth in the table below is information relating to the weighted
average cost of fuel used by the Company.

KPL Plants 1995 1994 1993 1992 1991
Per Million Btu:
Coal $1.15 $1.13 $1.13 $1.30 $1.33
Gas 1.63 2.66 2.71 2.15 1.72
Oil 4.34 4.27 4.41 4.19 4.25

Cents per KWH Generation 1.31 1.32 1.31 1.49 1.52

KGE Plants 1995 1994 1993 1992 1991
Per Million Btu:
Nuclear $0.40 $0.36 $0.35 $0.34 $0.32
Coal 0.91 0.90 0.96 1.25 1.32
Gas 1.68 1.98 2.37 1.95 1.74
Oil 4.00 3.90 3.15 4.28 4.13

Cents per KWH Generation 0.82 0.89 0.93 0.98 1.09

<PAGE 11>
Environmental Matters

The Company currently holds all Federal and State environmental approvals
required for the operation of its generating units. The Company believes it
is presently in substantial compliance with all air quality regulations
(including those pertaining to particulate matter, sulfur dioxide and nitrogen
oxides (NOx)) promulgated by the State of Kansas and the Environmental
Protection Agency (EPA).

The Federal sulfur dioxide standards, applicable to the Company's JEC and
La Cygne 2 units, prohibit the emission of more than 1.2 pounds of sulfur
dioxide per million Btu of heat input. Federal particulate matter emission
standards applicable to these units prohibit: (1) the emission of more than
0.1 pounds of particulate matter per million Btu of heat input and (2) an
opacity greater than 20%. Federal NOx emission standards applicable to these
units prohibit the emission of more than 0.7 pounds of NOx per million Btu of
heat input.

The JEC and La Cygne 2 units have met: (1) the sulfur dioxide standards
through the use of low sulfur coal (See Coal); (2) the particulate matter
standards through the use of electrostatic precipitators; and (3) the NOx
standards through boiler design and operating procedures. The JEC units are
also equipped with flue gas scrubbers providing additional sulfur dioxide and
particulate matter emission reduction capability.

The Kansas Department of Health and Environment (KDHE) regulations,
applicable to the Company's other generating facilities, prohibit the emission
of more than 2.5 pounds of sulfur dioxide per million Btu of heat input at the
Company's Lawrence generating units and 3.0 pounds at all other generating
units. There is sufficient low sulfur coal under contract (See Coal) to allow
compliance with such limits at Lawrence, Tecumseh and La Cygne 1 for the life
of the contracts. All facilities burning coal are equipped with flue gas
scrubbers and/or electrostatic precipitators.

The Clean Air Act Amendments of 1990 (the Act) require a two-phase
reduction in sulfur dioxide and NOx emissions with Phase I effective in 1995
and Phase II effective in 2000 and a probable reduction in toxic emissions by
a future date yet to be determined. To meet the monitoring and reporting
requirements under the Act's acid rain program, the Company installed
continuous monitoring and reporting equipment at a total cost of approximately
$10 million. The Company does not expect additional equipment to reduce
sulfur emissions to be necessary under Phase II. Although, the Company
currently has no Phase I affected units, the Company has applied for and has
been accepted for an early substitution permit to bring the co-owned La Cygne
Generating Station under the Phase I regulations.
The NOx and toxic limits, which were not set in the law, were proposed by
the EPA in January 1996. The Company is currently evaluating the steps it
will need to take in order to comply with the proposed new rules, but is
unable to determine its compliance options or related compliance costs until
the evaluation is finished later this year. The Company will have three years
to comply with the new rules.

All of the Company's generating facilities are in substantial compliance
with the Best Practicable Technology and Best Available Technology regulations
issued by EPA pursuant to the Clean Water Act of 1977. Most EPA regulations
are administered in Kansas by the KDHE.

Additional information with respect to Environmental Matters is discussed
in Note 5 of the Notes to Consolidated Financial Statements included herein.
<PAGE 12>
NATURAL GAS OPERATIONS

General

At December 31, 1995, the Company supplied natural gas at retail to
approximately 648,000 customers in 362 communities and at wholesale to eight
communities and two utilities in Kansas and Oklahoma. The natural gas systems
of the Company consist of distribution systems in both states purchasing
natural gas from various suppliers and transported by interstate pipeline
companies and the main system, an integrated storage, gathering, transmission
and distribution system. The Company also transports gas for its large
commercial and industrial customers which purchase gas on the spot market.
The Company earns approximately the same margin on the volume of gas
transported as on volumes sold except where discounting occurs in order to
retain the customer's load.

As discussed under General, above, on January 31, 1994, the Company sold
substantially all of its Missouri natural gas distribution properties and
operations to Southern Union and sold the remaining Missouri Properties to
United Cities on February 28, 1994. Additional information with respect to
the impact of the sales of the Missouri Properties is set forth in Notes 2 and
3 of the Notes to Consolidated Financial Statements.

The percentage of total natural gas deliveries, including transportation
and operating revenues for 1995, by state were as follows:

Total Natural Total Natural Gas
Gas Deliveries Operating Revenues
Kansas 96.4% 95.4%
Oklahoma 3.6% 4.6%

The Company's natural gas deliveries for the last five years were as
follows:

1995 1994(2) 1993 1992 1991
(Thousands of MCF)
Residential 55,810 64,804 110,045 93,779 97,297
Commercial 21,245 26,526 47,536 40,556 47,075
Industrial 548 605 1,490 2,214 2,655
Other 17,078(1) 43 41 94 14,960(3)
Transportation 48,292 51,059 73,574 68,425 78,055
Total 142,973 143,037 232,686 205,068 240,042

The Company's natural gas revenues for the last five years were as follows:

1995 1994(2) 1993 1992 1991
(Dollars in Thousands)
Residential $274,550 $332,348 $529,260 $440,239 $433,871
Commercial 94,349 125,570 209,344 169,470 182,486
Industrial 3,051 3,472 7,294 7,804 10,546
Other 31,860 11,544 30,143 27,457 33,434
Transportation 22,366 23,228 28,781 28,393 30,002
Total $426,176 $496,162 $804,822 $673,363 $690,339

(1) The increase in other gas sales reflects an increase in as-available
gas sales.

(2) Information reflects the sales of the Missouri Properties effective
January 31, and February 28, 1994.
<PAGE 13>
(3) Includes cumulative effect to January 1, 1991, of a change in revenue
recognition. The cumulative effect of this change increased natural
gas sales by 14,838,000 MCF for 1991.

In compliance with orders of the state commissions applicable to all
natural gas utilities, the Company has established priority categories for
service to its natural gas customers. The highest priority is for residential
and small commercial customers and the lowest for large industrial customers.
Natural gas delivered by the Company from its main system for use as fuel for
electric generation is classified in the lowest priority category.

Interstate System

The Company distributes natural gas at retail to approximately 518,000
customers located in central and eastern Kansas and northeastern Oklahoma.
The largest cities served in 1995 were Wichita and Topeka, Kansas and
Bartlesville, Oklahoma. The Company has transportation agreements for
delivery of this gas which have terms varying in length from one to twenty
years, with the following non-affiliated pipeline transmission companies:
Williams Natural Gas Company (WNG), Kansas Pipeline Company (KPP), Panhandle
Eastern Pipeline Company (Panhandle), and various other intrastate suppliers.
The volumes transported under these agreements in 1995 and 1994 were as
follows:

Transportation Volumes (BCF's)

1995 1994
WNG 61.8 51.6
KPP 7.1 7.6
Panhandle 1.0 0.8
Others 8.0 9.3

The Company purchases this gas from various producers and marketers under
contracts expiring at various times. The Company purchased approximately 61.7
BCF or 79.3% of its natural gas supply from these sources in 1995 and 52.2 BCF
or 89.3% during 1994. Approximately 90.5 BCF of natural gas is made available
annually under these contracts which extend beyond the year 2000.

In October 1994, the Company executed a long-term gas purchase contract
(Base Contract) and a peaking supply contract with Amoco Production Company
for the purpose of meeting the requirements of the customers served from the
Company's interstate system over the WNG pipeline system. The Company
anticipates that the Base Contract will supply between 35% and 50% of the
Company's demand served by the WNG pipeline system. Amoco is one of various
suppliers over the WNG pipeline system and if this contract were canceled, the
Company could replace gas supplied by Amoco with gas from other suppliers.
Gas available under the Amoco contract is also available for sale by the
Company to other parties and sales are recorded as Other Revenue.

The Company also purchases natural gas from KPP under contracts expiring
at various times. These purchases were approximately 5.3 BCF or 6.7% of its
natural gas supply in 1995 and 4.4 BCF or 5.6% during 1994. The Company
purchases natural gas for the interstate system from intrastate pipelines and
from spot market suppliers under short-term contracts. These sources totaled
3.6 BCF and 3.8 BCF for 1995 and 1994 representing 4.6% and 6.5% of the
system requirements, respectively.
<PAGE 14>
During 1995 and 1994, approximately 7.3 BCF and 8.0 BCF, respectively,
were transferred from the Company's main system to serve a portion of the
demand for Wichita, Kansas. These system transfers represent 9.4% and 13.7%,
respectively, of the interstate system supply.

The average wholesale cost per thousand cubic feet (MCF) purchased for the
distribution systems for the past five years was as follows:

Interstate Pipeline Supply
(Average Cost per MCF)

1995 1994 1993 1992 1991
WNG $ - $ - $3.57 $3.64
$3.61
Other 2.78 3.32 3.01 2.30 2.36
Total Average Cost 2.78 3.32 3.23 2.88 3.02

Main System

The Company serves approximately 130,000 customers in central and north
central Kansas with natural gas supplied through the main system. The
principal market areas include Salina, Manhattan, Junction City, Great Bend,
McPherson and Hutchinson, Kansas.

Natural gas for the Company's main system is purchased from a combination
of direct wellhead production, from the outlet of natural gas processing
plants, and from interstate pipeline interconnects all within the State of
Kansas. Such purchases are transported entirely through Company owned
transmission lines in Kansas.

Natural gas purchased for the Company's main system customer requirements
is transported and/or stored by the Market Center. The Company retains a
priority right to capacity on the Market Center necessary to serve the main
system customers. The Company has the opportunity to negotiate for the
purchase of natural gas with producers or marketers utilizing Market Center
services, which increases the potential supply available to meet main system
customer demands.

During 1995, the Company purchased approximately 8.7 BCF of natural gas
from Mesa Operating Limited Partnership (Mesa). Approximately 3.2 BCF of
natural gas was purchased through the spot market in 1995 which allowed the
Company to avoid minimum take requirements associated with long-term
contracts. These purchases represent approximately 39.7% and 14.6%,
respectively, of the Company's main system requirements during such periods.

Spivey-Grabs field in south-central Kansas supplied approximately 4.8 BCF
of natural gas in both 1995 and 1994, constituting 20.2% and 17.6%,
respectively, of the main system's requirements during such periods. Such
natural gas is supplied pursuant to contracts with producers in the
Spivey-Grabs field, most of which are for the life of the field, and under
which the Company expects to receive approximately 4.4 BCF or 23.6% of natural
gas in 1996. Based on a reserve study performed by an independent petroleum
engineering firm in 1995, significant quantities of gas will be available from
the Spivey-Grabs field for at least twenty years.

Other sources of gas for the main system of 3.4 BCF or 15.6% of the system
requirements were purchased from or transported through interstate pipelines
<PAGE 15>
during 1995. The remainder of the supply for the main system during 1995 and
1994 of 2.2 BCF and 2.5 BCF representing 9.9% and 9.2%, respectively, was
purchased directly from producers or gathering systems.

During 1995 and 1994, approximately 7.3 BCF and 8.0 BCF, respectively, of
the total main system supply was transferred to the Company's interstate
system (See Interstate System).

The Company believes there is adequate natural gas available under
contract or otherwise available to meet the currently anticipated needs of the
main system customers.

The main system's average wholesale cost per MCF purchased for the past
five years was as follows:
Natural Gas Supply - Main System
(Average Cost per MCF)

1995 1994 1993 1992 1991
Mesa-Hugoton Contract $1.44 $1.81 $1.78(1) $1.47(2) $1.36(3)
Other 2.47 2.92 2.69 2.66 2.68
Total Average Cost 2.06 2.23 2.20 2.00 1.94

(1) Includes 2.5 BCF @ $1.31/MCF of make-up deliveries.
(2) Includes 2.1 BCF @ $1.31/MCF of make-up deliveries.
(3) Includes 1.5 BCF @ $1.31/MCF of make-up deliveries.

The load characteristics of the Company's natural gas customers creates
relatively high volume demand on the main system during cold winter days. To
assure peak day service to high priority customers the Company owns and
operates
and has under contract natural gas storage facilities (See Item 2.
Properties).

SEGMENT INFORMATION

Financial information with respect to business segments is set forth in
Note 11 of the Notes to Consolidated Financial Statements included herein.

FINANCING

The Company's ability to issue additional debt and equity securities is
restricted under limitations imposed by the charter and the Mortgage and Deed
of Trust of Western Resources and KGE.

Western Resources' mortgage prohibits additional Western Resources first
mortgage bonds from being issued (except in connection with certain
refundings) unless the Company's net earnings available for interest,
depreciation and property retirement for a period of 12 consecutive months
within 15 months preceding the issuance are not less than the greater of twice
the annual interest charges on, or 10% of the principal amount of, all first
mortgage bonds outstanding after giving effect to the proposed issuance.
Based on the Company's results for the 12 months ended December 31, 1995,
approximately $487 million principal amount of additional first mortgage bonds
could be issued (7.25% interest rate assumed).

<PAGE 16>
Western Resources bonds may be issued, subject to the restrictions in the
preceding paragraph, on the basis of property additions not subject to an
unfunded prior lien and on the basis of bonds which have been retired. As of
December 31, 1995, the Company had approximately $485 million of net bondable
property additions not subject to an unfunded prior lien entitling the Company
to issue up to $291 million principal amount of additional bonds. As of
December 31, 1995, no additional bonds could be issued on the basis of retired
bonds.

KGE's mortgage prohibits additional KGE first mortgage bonds from being
issued (except in connection with certain refundings) unless KGE's net
earnings before income taxes and before provision for retirement and
depreciation of property for a period of 12 consecutive months within 15
months preceding the issuance are not less than two and one-half times the
annual interest charges on, or 10% of the principal amount of, all KGE first
mortgage bonds outstanding after giving effect to the proposed issuance.
Based on KGE's results for the 12 months ended December 31, 1995,
approximately $937 million principal amount of additional KGE first mortgage
bonds could be issued (7.25% interest rate assumed).

KGE bonds may be issued, subject to the restrictions in the preceding
paragraph, on the basis of property additions not subject to an unfunded prior
lien and on the basis of bonds which have been retired. As of December 31,
1995, KGE had approximately $1.3 billion of net bondable property additions
not subject to an unfunded prior lien entitling KGE to issue up to $922
million principal amount of additional KGE bonds. As of December 31, 1995, $1
million in additional bonds could be issued on the basis of retired bonds.

The most restrictive provision of the Company's charter permits the
issuance of additional shares of preferred stock without certain specified
preferred stockholder approval only if, for a period of 12 consecutive months
within 15 months preceding the issuance, net earnings available for payment of
interest exceed one and one-half times the sum of annual interest requirements
plus dividend requirements on preferred stock after giving effect to the
proposed issuance. After giving effect to the annual interest and dividend
requirements on all debt and preferred stock outstanding at December 31, 1995,
such ratio was 2.18 for the 12 months ended December 31, 1995.

REGULATION AND RATES

The Company is subject as an operating electric utility to the
jurisdiction of the Kansas Corporation Commission (KCC) and as a natural gas
utility to the jurisdiction of the KCC and the Corporation Commission of the
State of Oklahoma (OCC), which have general regulatory authority over the
Company's rates, extensions and abandonments of service and facilities,
valuation of property, the classification of accounts and various other
matters.

The Company is subject to the jurisdiction of the FERC and KCC with
respect to the issuance of securities. There is no state regulatory body in
Oklahoma having jurisdiction over the issuance of the Company's securities.

The Company is exempt as a public utility holding company pursuant to
Section 3(a)(1) of the Public Utility Holding Company Act of 1935 from all
provisions of that Act, except Section 9(a)(2). Additionally, the Company
<PAGE 17>
is subject to the jurisdiction of the FERC, including jurisdiction as to rates
with respect to sales of electricity for resale. The Company is not engaged
in the interstate transmission or sale of natural gas which would subject it
to the regulatory provisions of the Natural Gas Act. KGE is also subject to
the jurisdiction of the Nuclear Regulatory Commission as to nuclear plant
operations and safety.

Additional information with respect to Rate Matters and Regulation as set
forth in Note 4 of Notes to Consolidated Financial Statements is included
herein.

EMPLOYEE RELATIONS

As of December 31, 1995, the Company had 4,047 employees. The Company did
not experience any strikes or work stoppages during 1995. The Company's
current contract with the International Brotherhood of Electrical Workers was
negotiated in 1995 and extends through June 30, 1997. The contract covers
approximately 1,950 employees. The Company has contracts with three gas
unions representing approximately 595 employees. These contracts were
negotiated in 1992 and will expire June 6, 1996.

<PAGE 18>
EXECUTIVE OFFICERS OF THE COMPANY
<TABLE> Other Offices or Positions
Name Age Present Office Held During Past Five Years
<S> <C> <C> <C>
John E. Hayes, Jr. 58 Chairman of the Board President
and Chief Executive
Officer

David C. Wittig 40 President Executive Vice President,
(since March 1996) Corporate Strategy (since
May 1995)

Salomon Brothers, Inc.
Managing Director, Co-Head
of Mergers and Acquisitions

James S. Haines, Jr. 49 Executive Vice President Executive Vice President and Chief
and Chief Operating Administrative Officer (1992
Officer (since July 1995) to 1995)

Group Vice President-KGE

Steven L. Kitchen 50 Executive Vice President
and Chief Financial
Officer

Carl M. Koupal, Jr. 42 Executive Vice President Executive Vice President
and Chief Administrative Corporate Communications,
Officer (since July 1995) Marketing, and Economic Development
(since January 1995)

Vice President, Corporate Marketing,
And Economic Development, (1992 to
1994)

Director, Economic Development, (1985
to 1992) Jefferson City,Missouri

John K. Rosenberg 50 Executive Vice President
and General Counsel

Jerry D. Courington 50 Controller

</TABLE>
Executive officers serve at the pleasure of the Board of Directors. There are
no family relationships among any of the officers, nor any arrangements or
understandings between any officer and other persons pursuant to which he/she
was appointed as an officer.

<PAGE 19>
ITEM 2. PROPERTIES

The Company owns or leases and operates an electric generation,
transmission, and distribution system in Kansas, a natural gas integrated
storage, gathering, transmission and distribution system in Kansas, and a
natural gas distribution system in Kansas and Oklahoma.

During the five years ended December 31, 1995, the Company's gross
property additions totaled $1,025,952,000 and retirements were $190,118,000.

ELECTRIC FACILITIES
Unit Year Principal Unit Capacity
Name No. Installed Fuel (MW) (2)

Abilene Energy Center:
Combustion Turbine 1 1973 Gas 66

Gordon Evans Energy Center:
Steam Turbines 1 1961 Gas--Oil 150
2 1967 Gas--Oil 367

Hutchinson Energy Center:
Steam Turbines 1 1950 Gas 18
2 1950 Gas 17
3 1951 Gas 28
4 1965 Gas 197
Combustion Turbines 1 1974 Gas 51
2 1974 Gas 49
3 1974 Gas 54
4 1975 Oil 78

Jeffrey Energy Center (84%)(3):
Steam Turbines 1 1978 Coal 587
2 1980 Coal 617
3 1983 Coal 591

La Cygne Station (50%)(3):
Steam Turbines 1 1973 Coal 341
2 1977 Coal 331

Lawrence Energy Center:
Steam Turbines 2 1952 Gas 0 (1)
3 1954 Coal 56
4 1960 Coal 113
5 1971 Coal 370

Murray Gill Energy Center:
Steam Turbines 1 1952 Gas--Oil 46
2 1954 Gas--Oil 74
3 1956 Gas--Oil 107
4 1959 Gas--Oil 106

<PAGE 20>
Unit Year Principal Unit Capacity
Name No. Installed Fuel (MW) (2)

Neosho Energy Center:
Steam Turbines 3 1954 Gas--Oil 0 (1)

Tecumseh Energy Center:
Steam Turbines 7 1957 Coal 88
8 1962 Coal 148
Combustion Turbines 1 1972 Gas 19
2 1972 Gas 20

Wichita Plant:
Diesel Generator 5 1969 Diesel 3

Wolf Creek Generating Station (47%)(3):
Nuclear 1 1985 Uranium 548

Total 5,240

(1) These units have been "mothballed" for future use.

(2) Based on MOKAN rating.

(3) The Company jointly owns Jeffrey Energy Center (84%), La Cygne Station
(50%) and Wolf Creek Generating Station (47%).

NATURAL GAS COMPRESSOR STATIONS AND STORAGE FACILITIES

The Company's transmission and storage facility compressor stations, all
located in Kansas, as of December 31, 1995, are as follows:
Mfr Ratings
of MCF/Hr
Capacity at
Driving Type of Mfr hp 14.65 Psia
Location Units Year Installed Fuel Ratings at 60 F

Abilene . . . . . 4 1930 Gas 4,000 5,920
Bison . . . . . . 1 1951 Gas 440 316
Brehm Storage . . 2 1982 Gas 800 486
Calista . . . . . 3 1987 Gas 4,400 7,490
Hope. . . . . . . 1 1970 Electric 600 44
Hutchinson. . . . 2 1989 Gas 1,600 707
Manhattan . . . . 1 1963 Electric 250 313
Marysville. . . . 1 1964 Electric 250 202
McPherson . . . . 1 1972 Electric 3,000 7,040
Minneola. . . . . 5 1952 - 1978 Gas 9,650 14,018
Pratt . . . . . . 3 1963 - 1983 Gas 1,700 3,145
Spivey. . . . . . 4 1957 - 1964 Gas 7,200 1,368
Ulysses . . . . . 12 1949 - 1981 Gas 17,430 6,667
Yaggy Storage . . 3 1993 Electric 7,500 5,000

<PAGE 21>
The Company has contracted with the Market Center for underground storage
of working storage capacity of 2.08 BCF. This contract enables the Company to
supply customers up to 85 million cubic feet per day of gas supply to meet
winter peaking requirements.

The Company has contracted with WNG for additional underground storage in
the Alden field in Kansas. The contract, expiring March 31, 1998, enables the
Company to supply customers with up to 75 million cubic feet per day of gas
supply during winter peak periods. See Item I. Business, Gas Operations for
proven recoverable gas reserve information.

ITEM 3. LEGAL PROCEEDINGS

On August 15, 1994, the Bishop entities filed an answer and claims against
Southern Union and the Company alleging, among other things, breach of those
certain gas supply contracts. The Bishop entities claimed damages up to $270
million against the Company and Southern Union. On March 1, 1995 this
litigation between the Company and the Bishop entities was jointly dismissed
with prejudice and the parties exchanged mutual releases of any and all
claims. The gas supply contracts at issue in the above litigations were
canceled. The agreements between the Company and the Bishop entities resolved
disputes between them in regulatory proceedings before the KCC, the Missouri
Public Service Commission, and the FERC.

Additional information on legal proceedings involving the Company is set
forth in Notes 3, 4, and 5 of Notes to Consolidated Financial Statements
included herein. See also Item 1. Business, Environmental Matters, and
Regulation and Rates.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter was submitted during the fourth quarter of the fiscal year
covered by this report to a vote of security holders, through the solicitation
of proxies or otherwise.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Stock Trading

Western Resources common stock, which is traded under the ticker symbol
WR, is listed on the New York Stock Exchange. As of March 1, 1996, there were
40,831 common shareholders of record. For information regarding quarterly
common stock price ranges for 1995 and 1994, see Note 15 of Notes to
Consolidated Financial Statements included herein.

<PAGE 22>
Dividends

Western Resources common stock is entitled to dividends when and as
declared by the Board of Directors. At December 31, 1995, the Company's
retained earnings were restricted by $857,600 against the payment of dividends
on common stock. However, prior to the payment of common dividends, dividends
must be first paid to the holders of preferred stock and second to the holders
of preference stock based on the fixed dividend rate for each series.

Dividends have been paid on the Company's common stock throughout the
Company's history. Quarterly dividends on common stock normally are paid on
or about the first of January, April, July, and October to shareholders of
record as of about the third day of the preceding month. Dividends increased
four cents per common share in 1995 to $2.02 per share. In January 1996, the
Board of Directors declared a quarterly dividend of 51 1/2 cents per common
share, an increase of one cent over the previous quarter. Future dividends
depend upon future earnings, the financial condition of the Company and other
factors. For information regarding quarterly dividend declarations for 1995
and 1994, see Note 15 of Notes to Consolidated Financial Statements included
herein.

<PAGE 23>ITEM 6. SELECTED FINANCIAL DATA

<TABLE>
Year Ended December 31, 1995 1994(1) 1993 1992(2) 1991
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Income Statement Data:
Operating revenues:
Electric . . . . . . . . . . . $1,145,895 $1,121,781 $1,104,537 $ 882,885 $ 471,839
Natural gas. . . . . . . . . . 426,176 496,162 804,822 673,363 690,339
Total operating revenues . . 1,572,071 1,617,943 1,909,359 1,556,248 1,162,178
Operating expenses . . . . . . . 1,296,687 1,348,397 1,617,296 1,317,079 1,032,557
Allowance for funds used during
construction . . . . . . . . . 4,206 2,667 2,631 2,002 1,070

Income before cumulative effect
of accounting change . . . . . 181,676 187,447 177,370 127,884 72,285
Cumulative effect to January 1,
1991, of change in revenue
recognition. . . . . . . . . . - - - - 17,360
Net income . . . . . . . . . . . 181,676 187,447 177,370 127,884 89,645
Earnings applicable to common
stock. . . . . . . . . . . . . 168,257 174,029 163,864 115,133 83,268

December 31, 1995 1994(1) 1993 1992(2) 1991
(Dollars in Thousands)
Balance Sheet Data:
Gross plant in service . . . . . $6,128,527 $5,963,366 $6,222,483 $6,033,023 $2,535,448
Construction work in progress. . 100,401 85,290 80,192 68,041 17,114
Total assets . . . . . . . . . . 5,490,677 5,371,029 5,412,048 5,438,906 2,112,513
Long-term debt, preference
stock, and other mandatorily
redeemable securities . . . . . 1,641,263 1,507,028 1,673,988 2,077,459 690,612

Year Ended December 31, 1995 1994(1) 1993 1992(2) 1991

Common Stock Data:
Earnings per share before
cumulative effect of
accounting change. . . . . . . $ 2.71 $ 2.82 $ 2.76 $ 2.20 $ 1.91
Cumulative effect to January 1,
1991, of change in revenue
recognition per share. . . . . - - - - .50
Earnings per share . . . . . . . $ 2.71 $ 2.82 $ 2.76 $ 2.20 $ 2.41
Dividends per share. . . . . . . $ 2.02 $ 1.98 $ 1.94 $ 1.90 $ 2.04(3)
Book value per share . . . . . . $24.71 $23.93 $23.08 $21.51 $18.59
Average shares outstanding(000's) 62,157 61,618 59,294 52,272 34,566
Interest coverage ratio (before
income taxes, including
AFUDC) . . . . . . . . . . . . 3.14 3.42 2.79 2.27 2.69
Ratio of Earnings to Fixed
Charges. . . . . . . . . . . . 2.41 2.65 2.36 2.02 2.98
Ratio of Earnings to Combined
Fixed Charges and Preferred
and Preference Dividend
Requirements . . . . . . . . . 2.18 2.37 2.14 1.84 2.61

(1) Information reflects the sales of the Missouri Properties (Note 2).
(2) Information reflects the merger with KGE on March 31, 1992.
(3) Includes special, one-time dividend of $0.18 per share paid February 28, 1991.
</TABLE>
<PAGE 24>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

FINANCIAL CONDITION

GENERAL: Earnings were $2.71 per share of common stock based on
62,157,125 average common shares for 1995, a decrease from $2.82 in 1994 on
61,617,873 average common shares. Net income for 1995 decreased to $181.7
million compared to $187.4 million in 1994. The decrease in net income and
earnings per share is primarily due to the inclusion of the gain on the sales
of, and operating income from, the Company's natural gas distribution
properties and operations in the State of Missouri prior to the sales in the
first quarter of 1994.

Dividends for 1995 increased four cents per common share to $2.02 per
share. In January 1996, the Board of Directors declared a quarterly dividend
of 51 1/2 cents per common share, an increase of one cent over the previous
quarter.

The book value per share was $24.71 at December 31, 1995, compared to
$23.93 at December 31, 1994. The 1995 closing stock price of $33.38 was 135%
of book value. There were 62,855,961 common shares outstanding at December
31, 1995.

During the first quarter of 1994, the Company recognized a gain of
approximately $19.3 million, net of tax, on the sales of the Missouri
Properties. As of the respective dates of the sales of the Missouri
Properties, the Company ceased recording the results of operations, and
removed the assets and liabilities related to the Missouri Properties from the
Consolidated Balance Sheets. The gain is reflected in Other Income and
Deductions, on the Consolidated Statements of Income.

1994 1993
Percent Percent
of Total of Total
Amount Company Amount Company
(Dollars in Thousands, Unaudited)
Operating revenues. . . . $ 77,008 4.8% $349,749 18.3%
Operating income. . . . . 4,997 1.9% 20,748 7.1%
Net utility plant . . . . - - 296,039 6.6%

Separate audited financial information was not kept by the Company for the
Missouri Properties. This unaudited financial information is based on
assumptions and allocations of expenses of the Company as a whole.
<PAGE 25>
For additional information regarding the sales of the Missouri Properties
and the pending litigation see Notes 2 and 3 of the Notes to Consolidated
Financial Statements.

LIQUIDITY AND CAPITAL RESOURCES: The Company's liquidity is a function of
its ongoing construction and maintenance program designed to improve
facilities which provide electric and natural gas service and meet future
customer service requirements. Acquisitions and subsidiary investments also
affect the Company's liquidity.

During 1995, construction expenditures for the Company's electric system
were approximately $154 million and nuclear fuel expenditures were
approximately $28 million. It is projected that adequate capacity margins
will be maintained without the addition of any major generating facilities
through the turn of the century. The construction expenditures for
improvements on the natural gas system, including the Company's service line
replacement program, were approximately $55 million during 1995.

Capital expenditures for 1996 through 1998 are anticipated to be as
follows:

Electric Nuclear Fuel Natural Gas
(Dollars in Thousands)
1996. . . . . $117,600 $ 3,300 $56,300
1997. . . . . 126,500 22,300 43,800
1998. . . . . 119,100 20,800 42,100

These expenditures are estimates prepared for planning purposes and are
subject to revisions (See Note 5).

The Company's net cash flows to capital expenditures was 83% for 1995 and
during the last five years has averaged 97%. This ratio indicates the extent
to which the Company is able to fund its capital expenditures with cash flow
from operating activities. This ratio is calculated from the Company's
Consolidated Statements of Cash Flows as net cash flow from operating
activities, less changes in working capital, less dividends on preferred,
preference and common stock, divided by additions to utility plant. The
Company anticipates all of its cash requirements for capital expenditures
through 1998 will be provided from net operating cash flows.

The Company's capital needs through 2000 for bond maturities and cash
sinking fund requirements for bonds and preference stock are approximately
$236 million. This capital will be provided from internal and external
sources available under then existing financial conditions.

The embedded cost of long-term debt was 7.7% at December 31, 1995, an
increase from 7.6% at December 31, 1994. Higher interest rates on
variable-rate long-term debt contributed to the slight increase in the cost of
debt in 1995 compared to 1994.

On December 14, 1995 Western Resources Capital I, a wholly-owned trust,
of which the sole asset is subordinated debentures of the Company, sold in a
public offering four million preferred securities of 7 7/8% Cumulative
Quarterly Income Preferred Securities, Series A, for $100 million. The
securities are shown as Western Resources Obligated Mandatorily Redeemable
Preferred Securities of Subsidiary Trust holding solely Subordinated
Debentures (Other Mandatorily Redeemable Securities) on the Consolidated
Balance Sheets and Consolidated Statements of Capitalization (See Note 7).
<PAGE 26>
In January 1996, the Company acquired from Laidlaw Transportation Inc.
15.4 million shares of ADT Limited common stock for $215.6 million, as well as
an option to acquire an additional 15.4 million shares of ADT Limited common
stock. In March 1996, the Company exercised the option and acquired the
additional 15.4 million shares of ADT Limited common stock from Laidlaw
Transportation Inc. for approximately $228 million or $14.80 per share. The
Company's total investment in ADT common stock, representing approximately 24%
of ADT's shares currently outstanding, approximates $444 million. The
purchases were financed with short-term borrowings (See Note 5).

The Company's short-term financing requirements are satisfied, as needed,
through the sale of commercial paper, short-term bank loans and borrowings
under lines of credit maintained with banks. At December 31, 1995, short-term
borrowings amounted to $203 million, of which $26 million was commercial paper
(See Notes 10 and 12). At December 31, 1995, the Company had bank credit
arrangements available of $121 million.

The Company's short-term debt balance at December 31, 1995, decreased
approximately $105 million from December 31, 1994. The decrease is primarily
a result of the proceeds from the sale of the Other Mandatorily Redeemable
Securities being used to pay off short-term debt.

The Company has a Dividend Reinvestment and Stock Purchase Plan (DRIP).
Shares issued under the DRIP may be either original issue shares or shares
purchased on the open market.

The Company's capital structure at December 31, 1995, was 48 percent
common stock equity, 6 percent preferred and preference stock, 3 percent Other
Mandatorily Redeemable Securities, and 43 percent long-term debt. The capital
structure at December 31, 1995, including short-term debt and current
maturities of long-term debt, was 45 percent common stock equity, 5 percent
preferred and preference stock, 3 percent Other Mandatorily Redeemable
Securities, and 47 percent debt.

RESULTS OF OPERATIONS

The following is an explanation of significant variations from prior year
results in revenues, operating expenses, other income and deductions, interest
charges, and preferred and preference dividend requirements. The results of
operations of the Company exclude the activities related to the Missouri
Properties following the sales of those properties in the first quarter of
1994.

For additional information regarding the sales of the Missouri Properties
and the pending litigation, see Notes 2 and 3 of the Notes to Consolidated
Financial Statements. Additional information relating to changes between
years is provided in the Notes to Consolidated Financial Statements.

REVENUES

The operating revenues of the Company are based on sales volumes and rates
authorized by certain state regulatory commissions and the FERC. Future
natural gas and electric sales will be affected by weather conditions,
competition from other sources of energy, competing fuel sources, customer
conservation efforts, and the overall economy of the Company's service area.
<PAGE 27>
In March 1992, in connection with the Company's acquisition of KGE, the
KCC approved the elimination of the Energy Cost Adjustment Clause (ECA) for
most retail customers of the Company effective April 1, 1992. The fuel costs
are now included in base rates and were established at a level intended by the
KCC to equal the projected average cost of fuel through August 1995.
Therefore, if the Company wished to recover an increase in fuel cost above the
projected average cost it would have to file a request for recovery in a rate
filing with the KCC which request could be denied in whole or in part. The
Company's fuel costs represented 19% of its total operating expenses for the
years ended December 31, 1995 and 1994, respectively. Any increase in fuel
costs from the projected average which the Company did not recover through
rates would impact the Company's earnings. The degree of any such impact
would be affected by a variety of factors, however, and thus cannot now be
predicted.

Natural gas revenues were reduced as a result of the sales of the Missouri
Properties. The Consolidated Statements of Income include revenues of $77
million for the portion of the first quarter of 1994 prior to the sales of the
Missouri Properties and revenues of $350 million from the Missouri Properties
for 1993. Following the sales of the Missouri Properties, no revenues related
to the Missouri Properties are included in the Consolidated Statements of
Income (See Note 2).

1995 Compared to 1994: Electric revenues increased two percent in 1995 as
a result of increased sales in all customer classes. The increase is
primarily attributable to a higher demand for air conditioning load during the
summer months of 1995 compared to 1994. The Company's service territory
experienced normal temperatures during the summer of 1995, but were more than
20% warmer, based on cooling degree days, compared to the summer of 1994. The
Company has filed an electric rate reduction request with the KCC (See Note
4).

Natural gas revenues decreased in 1995 primarily as a result of the sales
of Missouri Properties in the first quarter of 1994 (See Note 2). The Company
has filed a $36 million rate increase request for its Kansas natural gas
properties with the KCC (See Note 4).

Excluding natural gas sales related to the Missouri Properties, prior to
the sales of those properties in the first quarter of 1994, total natural gas
revenues remained virtually unchanged in 1995. Natural gas revenues increased
from increased transportation sales and as-available sales, but these
increases were offset by decreased commercial and industrial sales and a lower
unit cost of natural gas which is passed on to customers through the purchased
gas adjustment (PGA).

As-available gas is excess natural gas under contract that the Company did
not require for customer sales or storage that is typically sold to gas
marketers. According to the Company's tariff, the nominal margin made on
as-available gas sales, is returned 50% to customers through the PGA and 50%
is reflected in wholesale sales of the Company.

1994 Compared to 1993: Electric revenues increased two percent during
1994 primarily as a result of a four percent increase in commercial and
industrial electric sales. Residential electric sales increased one percent
despite four percent cooler temperatures during the primary air conditioning
load months of June, July, and August. Partially offsetting these increases
in electric revenues was a 14% decrease in wholesale and interchange sales as
a result of higher than normal sales in 1993 to other utilities while their
generating units were down due to the flooding of 1993.
<PAGE 28>
Natural gas revenues and sales decreased significantly in 1994 as a result
of the sales of the Missouri Properties as previously mentioned above. Also
contributing to the decrease in natural gas revenues were reduced natural gas
sales for space heating as a result of much warmer temperatures during the
winter season of 1994 compared to 1993.

OPERATING EXPENSES

1995 Compared to 1994: Total operating expenses decreased four percent in
1995 compared to 1994. The decrease is largely due to the sales of Missouri
Properties, lower natural gas purchases resulting from lower sales, and lower
fuel expense resulting from a lower unit cost of fuel used for generation.

Partially offsetting this decrease were expenses related to an early
retirement program. In the second quarter of 1995, $7.6 million related to
early retirement programs was recorded as an expense.

The Company has filed a request with the KCC to increase the annual
depreciation expense for Wolf Creek Generating Station (See Note 4).

The Company anticipates its operating expenses (including fuel expenses)
will increase in 1996 as a result of Wolf Creek being taken out of service for
refueling and maintenance as discussed under "Fuel Mix" above.

1994 Compared to 1993: Total operating expenses decreased 17% during 1994
primarily as a result of the sales of the Missouri Properties (See Note 2).
Also contributing to the decrease were lower fuel costs for electric
generation and reduced natural gas purchases as a result of lower sales caused
by milder winter temperatures in 1994 compared to 1993.

Partially offsetting the decreases in operating expenses was higher income
tax expense. As of December 31, 1993, Kansas Gas and Electric Company (KGE)
had fully amortized its deferred income tax reserves related to the allowance
for borrowed funds used during construction capitalized for Wolf Creek
Generating Station. The completion of the amortization of these deferred
income tax reserves increased income tax expense and reduced net income by
approximately $12 million in 1994.

OTHER INCOME AND DEDUCTIONS: Other income and deductions, net of taxes,
decreased for the twelve months ended December 31, 1995 compared to 1994 as a
result of the gain on the sales of Missouri Properties recorded in the first
quarter of 1994 and additional interest expense on increased corporate-owned
life insurance (COLI) borrowings. Partially offsetting this decrease was the
recognition of income from death benefit proceeds under COLI contracts during
the fourth quarter of 1995 (See Notes 1 and 6 for discussion of current
legislation affecting COLI).

Other income and deductions, net of taxes, was higher for the twelve
months ended December 31, 1994 compared to 1993 due to the recognition of the
gain on the sales of the Missouri Properties of approximately $19.3 million,
net of tax (See Note 2). Partially offsetting this increase was increased
interest expense on COLI borrowings. Also partially offsetting the increase
was the recognition of income in 1993 from death benefit proceeds from COLI
policies.

INTEREST CHARGES AND PREFERRED AND PREFERENCE DIVIDEND REQUIREMENTS: Total
interest charges increased three percent for the twelve months ended December
31, 1995, primarily due to higher debt balances and higher interest rates on
short-term borrowings and variable long-term debt.
<PAGE 29>
The Company's embedded cost of long-term debt increased to 7.7% at
December 31, 1995, compared to 7.6% and 8.1% at December 31, 1994 and 1993.
Higher interest rates on variable-rate long-term debt contributed to the
slight increase in the cost of debt in 1995 compared to 1994.

Total interest charges decreased 17% in 1994 compared to 1993 as a result
of lower debt balances and the refinancing of higher cost debt, as well as
increased COLI borrowings, the interest on which is reflected in Other Income
and Deductions, on the Consolidated Statements of Income. Partially
offsetting these decreases in interest expense were higher interest rates on
short-term borrowings.

MERGER IMPLEMENTATION: In accordance with the KCC Merger order,
amortization of the acquisition adjustment commenced August 1995. The
amortization will amount to approximately $20 million (pre-tax) per year for
40 years. The Company can recover the amortization of the acquisition
adjustment through cost savings under a sharing mechanism approved by the KCC.

Based on the order issued by the KCC, with regard to the recovery of the
acquisition premium, the Company must achieve a level of savings on an annual
basis (considering sharing provisions) of approximately $27 million in order
to recover the entire acquisition premium. To the extent that the Company's
actual operations and maintenance expense is lower than the KCC-stipulated
index, the Company will realize merger savings. The Company has calculated,
in conformance with the KCC order, annual savings associated with the
acquisition to be in excess of $27 million for 1995. As management presently
expects to continue this level of savings, the amount is expected to be
sufficient to allow for the full recovery of the acquisition premium.

OTHER INFORMATION

INFLATION: Under the ratemaking procedures prescribed by the regulatory
commissions to which the Company is subject, only the original cost of plant
is recoverable in rates charged to customers. Therefore, because of
inflation, present and future depreciation provisions are inadequate for
purposes of maintaining the purchasing power invested by common shareholders
and the related cash flows are inadequate for replacing property. The impact
of this ratemaking process on common shareholders is mitigated to the extent
depreciable property is financed with debt that can be repaid with dollars of
less purchasing power. While the Company has experienced relatively low
inflation in the recent past, the cumulative effect of inflation on operating
costs may require the Company to seek regulatory rate relief to recover these
higher costs.

ENVIRONMENTAL: The Company has taken a proactive position with respect to
the potential environmental liability associated with former manufactured gas
sites and has an agreement with the Kansas Department of Health and
Environment to systematically evaluate these sites in Kansas (See Note 5).

Although the Company currently has no Phase I affected units under the
Clean Air Act of 1990, the Company has applied for and has been accepted for
an early substitution permit to bring the co-owned La Cygne Station under the
Phase I guidelines. The oxides of nitrogen and toxic limits, which were not
set in the law, were proposed by the EPA in January 1996. The Company is
currently evaluating the steps it will need to take in order to comply with
the proposed new rules, but is unable to determine its compliance options or
related compliance costs until the evaluation is finished later this year.
The Company will have three years to comply with the new rules. (See Note 5).
<PAGE 30>
COMPETITION: As a regulated utility, the Company currently has limited
direct competition for retail electric service in its certified service area.
However, there is competition, based largely on price, from the generation, or
potential generation, of electricity by large commercial and industrial
customers, and independent power producers.

The 1992 Energy Policy Act (Act) requires increased efficiency of energy
usage and has affected the way electricity is marketed. The Act also provides
for increased competition in the wholesale electric market by permitting the
FERC to order third party access to utilities' transmission systems and by
liberalizing the rules for ownership of generating facilities. As part of the
Merger, the Company agreed to open access of its transmission system for
wholesale transactions. During 1995, wholesale electric revenues represented
approximately nine percent of the Company's total electric revenues.

Operating in this competitive environment could place pressure on utility
profit margins and credit quality. Wholesale and industrial customers may
threaten to pursue cogeneration, self-generation, retail wheeling,
municipalization or relocation to other service territories in an attempt to
obtain reduced energy costs. Increasing competition has resulted in credit
rating agencies applying more stringent guidelines when making utility credit
rating determinations (See Note 1 for the effects of competition on Statement
of Financial Accounting Standards No. 71).

The Company is providing competitive electric rates for industrial
expansion projects and economic development projects in an effort to maintain
and increase electric load. During 1996, the Company will lose a major
industrial customer to cogeneration resulting in a reduction to pre-tax
earnings of approximately $7 to $8 million annually. This customer's decision
to develop its own cogeneration project was based largely on factors other
than energy cost.

To capitalize on opportunities in the non-regulated natural gas industry,
the Company, through its wholly-owned subsidiary Mid Continent Market Center,
Inc. (Market Center), has established a natural gas market center in Kansas.
The Market Center, which began operations on July 1, 1995, provides natural
gas transportation, storage, and gathering services, as well as balancing, and
title transfer capability. The Company transferred certain natural gas
transmission assets having a net book value of approximately $50 million to
the Market Center. The Market Center will provide no notice natural gas
transportation and storage services to the Company under a long-term contract.

<PAGE 31>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

TABLE OF CONTENTS PAGE

Report of Independent Public Accountants 32

Financial Statements:

Consolidated Balance Sheets, December 31, 1995 and 1994 33
Consolidated Statements of Income for the years ended
December 31, 1995, 1994 and 1993 34
Consolidated Statements of Cash Flows for the years ended
1995, 1994 and 1993 35
Consolidated Statements of Taxes for the years ended
December 31, 1995, 1994 and 1993 36
Consolidated Statements of Capitalization, December 31, 1995
and 1994 37
Consolidated Statements of Common Stock Equity for the years
ended December 31, 1995, 1994 and 1993 38
Notes to Consolidated Financial Statements 39

SCHEDULES OMITTED

The following schedules are omitted because of the absence of the
conditions under which they are required or the information is included in the
financial statements and schedules presented:

I, II, III, IV, and V.

<PAGE 32>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Shareholders and Board of Directors
of Western Resources, Inc.:

We have audited the accompanying consolidated balance sheets and
statements of capitalization of Western Resources, Inc., and subsidiaries as
of December 31, 1995 and 1994, and the related consolidated statements of
income, cash flows, taxes and common stock equity for each of the three years
in the period ended December 31, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Western
Resources, Inc., and subsidiaries as of December 31, 1995 and 1994, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1995, in conformity with
generally accepted accounting principles.

As explained in Note 6 to the consolidated financial statements,
effective January 1, 1993, the Company changed its method of accounting for
postretirement benefits and effective January 1, 1994, the Company changed its
method of accounting for postemployment benefits.

ARTHUR ANDERSEN LLP
Kansas City, Missouri,
January 26, 1996

<PAGE 33>
<TABLE>
WESTERN RESOURCES, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in Thouands)
<CAPTION>
December 31,
1995 1994(1)
<S> <C> <C>
ASSETS
UTILITY PLANT (Notes 1 and 8):
Electric plant in service . . . . . . . . . . . . . . . . $5,341,074 $5,226,175
Natural gas plant in service. . . . . . . . . . . . . . . 787,453 737,191
6,128,527 5,963,366
Less - Accumulated depreciation . . . . . . . . . . . . . 1,926,520 1,790,266
4,202,007 4,173,100
Construction work in progress . . . . . . . . . . . . . . 100,401 85,290
Nuclear fuel (net). . . . . . . . . . . . . . . . . . . . 53,942 39,890
Net utility plant. . . . . . . . . . . . . . . . . . . 4,356,350 4,298,280

OTHER PROPERTY AND INVESTMENTS:
Net non-utility investments . . . . . . . . . . . . . . . 90,044 74,017
Decommissioning trust (Note 5). . . . . . . . . . . . . . 25,070 16,944
Other . . . . . . . . . . . . . . . . . . . . . . . . . . 9,225 13,556
124,339 104,517
CURRENT ASSETS:
Cash and cash equivalents (Note 1). . . . . . . . . . . . 2,414 2,715
Accounts receivable and unbilled revenues (net) (Note 1). 257,292 219,760
Fossil fuel, at average cost. . . . . . . . . . . . . . . 54,742 38,762
Gas stored underground, at average cost . . . . . . . . . 28,106 45,222
Materials and supplies, at average cost . . . . . . . . . 57,996 56,145
Prepayments and other current assets. . . . . . . . . . . 20,973 27,932
421,523 390,536
DEFERRED CHARGES AND OTHER ASSETS:
Deferred future income taxes (Note 9) . . . . . . . . . . 282,476 283,297
Deferred coal contract settlement costs (Note 4). . . . . 27,274 33,606
Phase-in revenues (Note 4). . . . . . . . . . . . . . . . 43,861 61,406
Corporate-owned life insurance (net) (Notes 1 and 6). . . 44,143 16,967
Other deferred plant costs. . . . . . . . . . . . . . . . 31,539 31,784
Unamortized debt expense. . . . . . . . . . . . . . . . . 56,681 58,237
Other . . . . . . . . . . . . . . . . . . . . . . . . . . 102,491 92,399
588,465 577,696

TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . $5,490,677 $5,371,029

CAPITALIZATION AND LIABILITIES

CAPITALIZATION (See statements):
Common stock equity . . . . . . . . . . . . . . . . . . . $1,553,110 $1,474,455
Cumulative preferred and preference stock . . . . . . . . 174,858 174,858
Western Resources obligated mandatorily redeemable
preferred securities of subsidiary trust holding
solely subordinated debentures. . . . . . . . . . . . . 100,000 -
Long-term debt (net). . . . . . . . . . . . . . . . . . . 1,391,263 1,357,028
3,219,231 3,006,341
CURRENT LIABILITIES:
Short-term debt (Note 12) . . . . . . . . . . . . . . . . 203,450 308,200
Long-term debt due within one year (Note 10). . . . . . . 16,000 80
Accounts payable. . . . . . . . . . . . . . . . . . . . . 149,194 130,616
Accrued taxes . . . . . . . . . . . . . . . . . . . . . . 68,569 86,966
Accrued interest and dividends. . . . . . . . . . . . . . 62,157 61,069
Other . . . . . . . . . . . . . . . . . . . . . . . . . . 40,266 69,025
539,636 655,956
DEFERRED CREDITS AND OTHER LIABILITIES:
Deferred income taxes (Note 9). . . . . . . . . . . . . . 1,167,470 1,152,425
Deferred investment tax credits (Note 9). . . . . . . . . 132,286 137,651
Deferred gain from sale-leaseback (Note 13) . . . . . . . 242,700 252,341
Other . . . . . . . . . . . . . . . . . . . . . . . . . . 189,354 166,315
1,731,810 1,708,732
COMMITMENTS AND CONTINGENCIES (Notes 3 and 5)
TOTAL CAPITALIZATION AND LIABILITIES. . . . . . . . . . $5,490,677 $5,371,029

(1) Information reflects the sales of the Missouri Properties (Note 2).

The Notes to Consolidated Financial Statements are an integral part of this statement.
</TABLE>
<PAGE 34>
<TABLE>
WESTERN RESOURCES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thouands, Except Per Share Amounts)
<CAPTION>

Year Ended December 31,
1995 1994(1) 1993
<S> <C> <C> <C>
OPERATING REVENUES (Notes 1 and 4):
Electric. . . . . . . . . . . . . . . . . . . . . . . $1,145,895 $1,121,781 $1,104,537
Natural gas . . . . . . . . . . . . . . . . . . . . . 426,176 496,162 804,822
Total operating revenues. . . . . . . . . . . . . . 1,572,071 1,617,943 1,909,359

OPERATING EXPENSES:
Fuel used for generation:
Fossil fuel . . . . . . . . . . . . . . . . . . . . 211,994 220,766 237,053
Nuclear fuel. . . . . . . . . . . . . . . . . . . . 19,425 13,562 13,275
Power purchased . . . . . . . . . . . . . . . . . . . 15,739 15,438 16,396
Natural gas purchases . . . . . . . . . . . . . . . . 263,790 312,576 500,189
Other operations. . . . . . . . . . . . . . . . . . . 317,279 303,391 349,160
Maintenance . . . . . . . . . . . . . . . . . . . . . 108,641 113,186 117,843
Depreciation and amortization . . . . . . . . . . . . 156,915 151,630 164,364
Amortization of phase-in revenues . . . . . . . . . . 17,545 17,544 17,545
Taxes (See Statements):
Federal income. . . . . . . . . . . . . . . . . . . 70,132 76,477 62,420
State income. . . . . . . . . . . . . . . . . . . . 18,388 19,145 15,558
General . . . . . . . . . . . . . . . . . . . . . . 96,839 104,682 123,493
Total operating expenses. . . . . . . . . . . . . 1,296,687 1,348,397 1,617,296

OPERATING INCOME. . . . . . . . . . . . . . . . . . . . 275,384 269,546 292,063

OTHER INCOME AND DEDUCTIONS:
Corporate-owned life insurance (net). . . . . . . . . (2,668) (5,354) 7,841
Gain on sales of Missouri Properties (Note 2) . . . . - 30,701 -
Miscellaneous (net) . . . . . . . . . . . . . . . . . 23,447 12,838 18,418
Income taxes (net) (See Statements) . . . . . . . . . 5,128 (4,329) (777)
Total other income and deductions . . . . . . . . 25,907 33,856 25,482

INCOME BEFORE INTEREST CHARGES. . . . . . . . . . . . . 301,291 303,402 317,545

INTEREST CHARGES:
Long-term debt. . . . . . . . . . . . . . . . . . . . 95,962 98,483 123,551
Other . . . . . . . . . . . . . . . . . . . . . . . . 27,859 20,139 19,255
Allowance for borrowed funds used during
construction (credit) . . . . . . . . . . . . . . . (4,206) (2,667) (2,631)
Total interest charges. . . . . . . . . . . . . . 119,615 115,955 140,175

NET INCOME. . . . . . . . . . . . . . . . . . . . . . . 181,676 187,447 177,370

PREFERRED AND PREFERENCE DIVIDENDS. . . . . . . . . . . 13,419 13,418 13,506

EARNINGS APPLICABLE TO COMMON STOCK . . . . . . . . . . $ 168,257 $ 174,029 $ 163,864

AVERAGE COMMON SHARES OUTSTANDING . . . . . . . . . . . 62,157,125 61,617,873 59,294,091

EARNINGS PER AVERAGE COMMON SHARE OUTSTANDING . . . . . $ 2.71 $ 2.82 $ 2.76

DIVIDENDS DECLARED PER COMMON SHARE . . . . . . . . . . $ 2.02 $ 1.98 $ 1.94

(1) Information reflects the sales of the Missouri Properties (Note 2).

The Notes to Consolidated Financial Statements are an integral part of this statement.
</TABLE>
<PAGE 35>
<TABLE>
WESTERN RESOURCES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thouands)
<CAPTION>

Year Ended December 31,
1995 1994(1) 1993
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income. . . . . . . . . . . . . . . . . . . . . . . . $ 181,676 $ 187,447 $ 177,370
Depreciation and amortization . . . . . . . . . . . . . . 150,186 151,630 164,364
Other amortization (including nuclear fuel) . . . . . . . 15,193 10,905 11,254
Gain on sale of utility plant (net of tax) . . . . . . . (951) (19,296) -
Deferred taxes and investment tax credits (net) . . . . . 14,972 (16,555) 27,686
Amortization of phase-in revenues . . . . . . . . . . . . 17,545 17,544 17,545
Corporate-owned life insurance. . . . . . . . . . . . . . (28,548) (17,246) (21,650)
Amortization of gain from sale-leaseback. . . . . . . . . (9,640) (9,640) (9,640)
Amortization of acquisition adjustment. . . . . . . . . . 6,729 - -
Changes in other working capital items (net of effects
from the sales of the Missouri Properties):
Accounts receivable and unbilled revenues (net)(Note 1) (37,532) (75,630) (15,536)
Fossil fuel . . . . . . . . . . . . . . . . . . . . . . (15,980) (7,828) 18,073
Gas stored underground. . . . . . . . . . . . . . . . . 17,116 (5,403) (37,144)
Accounts payable. . . . . . . . . . . . . . . . . . . . 18,578 (41,682) (43,169)
Accrued taxes . . . . . . . . . . . . . . . . . . . . . (19,024) 20,756 7,485
Other . . . . . . . . . . . . . . . . . . . . . . . . . 8,179 41,309 25,400
Changes in other assets and liabilities . . . . . . . . . (11,555) 31,480 (45,927)
Net cash flows from operating activities. . . . . . . . 306,944 267,791 276,111

CASH FLOWS USED IN INVESTING ACTIVITIES:
Additions to utility plant. . . . . . . . . . . . . . . . 236,827 237,696 237,631
Utility investment. . . . . . . . . . . . . . . . . . . . - - 2,500
Sales of utility plant. . . . . . . . . . . . . . . . . . (1,723) (402,076) -
Non-utility investments (net) . . . . . . . . . . . . . . 15,408 9,041 14,271
Corporate-owned life insurance policies . . . . . . . . . 55,175 54,914 55,833
Death proceeds of corporate-owned life insurance policies (11,187) (1,251) (10,590)
Net Cash flows (used in) from investing activities. . . 294,500 (101,676) 299,645

CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term debt (net) . . . . . . . . . . . . . . . . . . (104,750) (132,695) 218,670
Bank term loan retired. . . . . . . . . . . . . . . . . . - - (230,000)
Bonds issued. . . . . . . . . . . . . . . . . . . . . . . - 235,923 223,500
Bonds retired . . . . . . . . . . . . . . . . . . . . . . (105) (223,906) (366,466)
Revolving credit agreements (net) . . . . . . . . . . . . 50,000 (115,000) (35,000)
Other long-term debt issued . . . . . . . . . . . . . . . - - 70,999
Other long-term debt retired. . . . . . . . . . . . . . . - (67,893) (63,956)
Other mandatorily redeemable securities . . . . . . . . . 100,000 - -
Borrowings against life insurance policies. . . . . . . . 49,279 70,633 211,538
Repayment of borrowings against life insurance policies . (5,384) (225) (1,350)
Common stock issued (net) . . . . . . . . . . . . . . . . 36,161 - 125,991
Preference stock redeemed . . . . . . . . . . . . . . . . - - (2,734)

Dividends on preferred, preference, and common stock. . . (137,946) (134,806) (127,316)
Net cash flows used in (from) financing activities. . . (12,745) (367,969) 23,876

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS. . . . (301) 1,498 342

CASH AND CASH EQUIVALENTS:
Beginning of the period . . . . . . . . . . . . . . . . . 2,715 1,217 875
End of the period . . . . . . . . . . . . . . . . . . . . $ 2,414 $ 2,715 $ 1,217

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
CASH PAID FOR:
Interest on financing activities (net of amount
Capitalized). . . . . . . . . . . . . . . . . . . . . . $ 136,548 $ 134,785 $ 171,734
Income taxes. . . . . . . . . . . . . . . . . . . . . . . 84,811 90,229 49,108

(1) Information reflects the sales of the Missouri Properties (Note 2).

The Notes to Consolidated Financial Statements are an integral part of this statement.
</TABLE>
<PAGE 36>
<TABLE>
WESTERN RESOURCES, INC.
CONSOLIDATED STATEMENTS OF TAXES
(Dollars in Thouands)
<CAPTION>

Year Ended December 31,
1995 1994(1) 1993

<S> <C> <C> <C>
FEDERAL INCOME TAXES:
Payable currently . . . . . . . . . . . . . . . . . . . . $ 51,218 $ 98,748 $ 41,200
Deferred taxes arising from:
Alternative minimum tax credit. . . . . . . . . . . . . 23,925 - -
Depreciation and other property related items . . . . . (1,813) 29,506 25,552
Energy and purchased gas adjustment clauses . . . . . . 5,239 9,764 (8,192)
Natural gas line survey and replacement program . . . . 1,192 (313) 355
Missouri property sales . . . . . . . . . . . . . . . . - (36,343) -
Prepaid power sale. . . . . . . . . . . . . . . . . . . (23) (13,759) -
Other . . . . . . . . . . . . . . . . . . . . . . . . . (7,046) (800) 6,166
Amortization of investment tax credits. . . . . . . . . . (6,789) (6,739) (1,982)
Total Federal income taxes. . . . . . . . . . . . . . 65,903 80,064 63,099
Less:
Federal income taxes applicable to non-operating items:
Missouri property sales . . . . . . . . . . . . . . . . - 9,485 -
Other . . . . . . . . . . . . . . . . . . . . . . . . . (4,229) (5,898) 679
Total Federal income taxes applicable to
non-operating items . . . . . . . . . . . . . . . . (4,229) 3,587 679
Total Federal income taxes charged to operations. . 70,132 76,477 62,420

STATE INCOME TAXES:
Payable currently . . . . . . . . . . . . . . . . . . . . 17,203 17,758 9,869
Deferred (net). . . . . . . . . . . . . . . . . . . . . . 286 2,129 5,787
Total State income taxes. . . . . . . . . . . . . . . 17,489 19,887 15,656
Less:
State income taxes applicable to non-operating items. . . (899) 742 98
Total State income taxes charged to operations. . . 18,388 19,145 15,558

GENERAL TAXES:
Property and other taxes. . . . . . . . . . . . . . . . . 83,738 86,687 84,583
Franchise taxes . . . . . . . . . . . . . . . . . . . . . 26 5,116 22,878
Payroll taxes . . . . . . . . . . . . . . . . . . . . . . 13,075 12,879 16,032
Total general taxes charged to operations . . . . . 96,839 104,682 123,493

TOTAL TAXES CHARGED TO OPERATIONS . . . . . . . . . . . . . $185,359 $200,304 $201,471

The effective income tax rates set forth below are computed by dividing total Federal and State income
taxes by the sum of such taxes and net income. The difference between the effective rates and the Federal
statutory income tax rates are as follows:

Year Ended December 31, 1995 1994(1) 1993

EFFECTIVE INCOME TAX RATE . . . . . . . . . . . . . . . . . 31.8% 35.3% 31.0%

EFFECT OF:
State income taxes. . . . . . . . . . . . . . . . . . . . (4.3) (4.6) (4.0)
Amortization of investment tax credits. . . . . . . . . . 2.5 2.4 2.7
Corporate-owned life insurance. . . . . . . . . . . . . . 3.2 2.1 3.0
Flow through and amortization, net . . . . . . . . . . . . (.2) (.7) 3.1
Other differences . . . . . . . . . . . . . . . . . . . . 2.0 .5 (.8)

STATUTORY FEDERAL INCOME TAX RATE . . . . . . . . . . . . . 35.0% 35.0% 35.0%

(1) Information reflects the sales of the Missouri Properties (Note 2).

The Notes to Consolidated Financial Statements are an integral part of this statement.
</TABLE>
<PAGE 37>
<TABLE>
WESTERN RESOURCES, INC.
CONSOLIDATED STATEMENTS OF CAPITALIZATION
(Dollars in Thouands)
<CAPTION>

December 31,
1995 1994
<S> <C> <C>
COMMON STOCK EQUITY (See Statements):
Common stock, par value $5 per share,
authorized 85,000,000 shares, outstanding
62,855,961 and 61,617,873 shares, respectively . . $ 314,280 $ 308,089
Paid-in capital. . . . . . . . . . . . . . . . . . . 697,962 667,992
Retained earnings. . . . . . . . . . . . . . . . . . 540,868 498,374
1,553,110 48% 1,474,455 49%

CUMULATIVE PREFERRED AND PREFERENCE STOCK (Note 7):
Preferred stock not subject to mandatory redemption,
Par value $100 per share, authorized
600,000 shares, outstanding -
4 1/2% Series, 138,576 shares . . . . . . . . 13,858 13,858
4 1/4% Series, 60,000 shares. . . . . . . . . 6,000 6,000
5% Series, 50,000 shares. . . . . . . . . . . 5,000 5,000
24,858 24,858
Preference stock subject to mandatory redemption,
Without par value, $100 stated value,
authorized 4,000,000 shares,
outstanding -
7.58% Series, 500,000 shares. . . . . . . . . 50,000 50,000
8.50% Series, 1,000,000 shares. . . . . . . . 100,000 100,000
150,000 150,000
174,858 6% 174,858 6%

WESTERN RESOURCES OBLIGATED MANDATORILY REDEEMABLE
PREFERRED SECURITIES OF SUBSIDIARY
TRUST HOLDING SOLELY COMPANY
SUBORDINATED DEBENTURES (Note 7): 100,000 3% - 0%

LONG-TERM DEBT (Note 10):
First mortgage bonds . . . . . . . . . . . . . . . . 841,000 841,000
Pollution control bonds. . . . . . . . . . . . . . . 521,817 521,922
Revolving credit agreement. . . . . . . . . . . . . 50,000 -
Less:
Unamortized premium and discount (net) . . . . . . 5,554 5,814
Long-term debt due within one year . . . . . . . . 16,000 80
1,391,263 43% 1,357,028 45%
TOTAL CAPITALIZATION . . . . . . . . . . . . . . . . . $3,219,231 100% $3,006,341 100%

The Notes to Consolidated Financial Statements are an integral part of this statement.
</TABLE>
<PAGE 38>
<TABLE>
WESTERN RESOURCES, INC.
CONSOLIDATED STATEMENTS OF COMMON STOCK EQUITY
(Dollars in Thouands)
<CAPTION>

Common Paid-in Retained
Stock Capital Earnings

<S> <C> <C> <C>
BALANCE DECEMBER 31, 1992, 58,045,550 shares. . . . . $290,228 $559,636 $398,503

Net income. . . . . . . . . . . . . . . . . . . . . . 177,370

Cash dividends:
Preferred and preference stock. . . . . . . . . . . (13,506)
Common stock, $1.94 per share . . . . . . . . . . . (116,019)

Expenses on common and preference stock . . . . . . . (3,453)

Issuance of 3,572,323 shares of common stock. . . . . 17,861 111,555

BALANCE DECEMBER 31, 1993, 61,617,873 shares. . . . . 308,089 667,738 446,348

Net income. . . . . . . . . . . . . . . . . . . . . . 187,447

Cash dividends:
Preferred and preference stock. . . . . . . . . . . (13,418)
Common stock, $1.98 per share . . . . . . . . . . . (122,003)

Expenses on common stock. . . . . . . . . . . . . . . (228)
Distribution of common stock under the Customer
Stock Purchase Plan . . . . . . . . . . . . . . . . 482

BALANCE DECEMBER 31, 1994, 61,617,873 shares. . . . . 308,089 667,992 498,374

Net income. . . . . . . . . . . . . . . . . . . . . . 181,676

Cash dividends:
Preferred and preference stock. . . . . . . . . . . (13,419)
Common stock, $2.02 per share . . . . . . . . . . . (125,763)

Expenses on common stock. . . . . . . . . . . . . . . (772)

Issuance of 1,238,088 shares of common stock. . . . . 6,191 30,742

BALANCE DECEMBER 31, 1995, 62,855,961 shares. . . . . $314,280 $697,962 $540,868

The Notes to Consolidated Financial Statements are an integral part of this statement.
</TABLE>
<PAGE 39>
WESTERN RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General: The Consolidated Financial Statements of Western Resources, Inc.
(the Company) and its wholly-owned subsidiaries, include KPL, a rate-regulated
electric and gas division of the Company, Kansas Gas and Electric Company
(KGE), a rate-regulated electric utility and wholly-owned subsidiary of the
Company, the Westar companies, non-utility subsidiaries, and Mid Continent
Market Center, Inc. (Market Center), a regulated gas transmission service
provider. KGE owns 47% of Wolf Creek Nuclear Operating Corporation (WCNOC),
the operating Company for Wolf Creek Generating Station (Wolf Creek). The
Company records its proportionate share of all transactions of WCNOC as it
does other jointly-owned facilities. All significant intercompany
transactions have been eliminated. The operations of non-utility subsidiaries
were not material to the Company's overall results of operations.

The Company is an investor-owned holding Company. The Company is engaged
principally in the production, purchase, transmission, distribution and sale
of electricity and the delivery and sale of natural gas. The Company serves
approximately 601,000 electric customers in eastern and central Kansas and
approximately 648,000 natural gas customers in Kansas and northeastern
Oklahoma. The Company's non-utility subsidiaries which market natural gas
primarily to large commercial and industrial customers, provide other energy
related products and services and provide electronic security services.

The Company prepares its financial statements in conformity with generally
accepted accounting principles as applied to regulated public utilities. The
accounting and rates of the Company are subject to requirements of the Kansas
Corporation Commission (KCC), the Oklahoma Corporation Commission (OCC), and
the Federal Energy Regulatory Commission (FERC). The financial statements
require management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, to disclose contingent assets and
liabilities at the balance sheet date, and to report amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
The Company follows the accounting for regulated enterprises prescribed by
Statement of Financial Accounting Standards No. 71 "Accounting for the Effects
of Certain Types of Regulations" (SFAS 71). This pronouncement requires
deferral of certain costs and obligations based upon approvals received from
regulators to permit recovery or require refund of these costs and revenues in
future periods. Consequently, the recorded net book value of certain assets
and liabilities may be different than that which would otherwise be recorded
by unregulated enterprises. On a continuing basis, the Company reviews the
continued applicability of SFAS 71 based on the current regulatory and
competitive environment. Although recent developments suggest the electric
generation industry may become more competitive, the degree to which
regulatory oversight of the Company will be lifted and competition will be
permitted is uncertain. Currently, there are no proceedings or actions at the
KCC to open the Company's electric markets to greater competition. As a
result, the Company continues to believe that accounting under SFAS 71 is
appropriate. If the Company were to determine that the use of SFAS 71 were no
longer appropriate, it would be required to write-off the deferred costs and
obligations that represent regulatory assets and liabilities referred to
<PAGE 40>
above. It may also be necessary for the Company to reduce the carrying value
of a portion of its plant and equipment to the extent that it is expected to
become impaired. At this time, it is not possible to estimate the amount of
the Company's plant and equipment, if any, that would be considered
unrecoverable in such circumstances, as the effect of any future competition
on the Company's rates is not clear at this time.

Utility Plant: Utility plant is stated at cost. For constructed plant,
cost includes contracted services, direct labor and materials, indirect
charges for engineering, supervision, general and administrative costs, and an
allowance for funds used during construction (AFUDC). The AFUDC rate was
6.31% in 1995, 4.08% in 1994, and 4.10% in 1993. The cost of additions to
utility plant and replacement units of property are capitalized. Maintenance
costs and replacement of minor items of property are charged to expense as
incurred. When units of depreciable property are retired, they are removed
from the plant accounts and the original cost plus removal charges less
salvage are charged to accumulated depreciation.

In accordance with regulatory decisions made by the KCC, amortization of
the acquisition premium of approximately $801 million resulting from the KGE
purchase began in August of 1995. The premium is being amortized over 40
years and has been classified as electric plant in service. Accumulated
amortization through December 31, 1995 totaled $6.7 million.

In March 1995, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of"
(SFAS 121). This Statement imposes stricter criteria for regulatory assets by
requiring that such assets be probable of future recovery at each balance
sheet date. The Company will adopt this standard on January 1, 1996 and does
not expect that adoption will have a material impact on the financial position
or results of operations based on the Company's current regulatory structure.
This conclusion may change in the future if increases in competition influence
regulation and wholesale and retail pricing in the electric industry.

Depreciation: Depreciation is provided on the straight-line method based
on estimated useful lives of property. Composite provisions for book
depreciation approximated 2.84% during 1995, 2.87% during 1994, and 3.02%
during 1993 of the average original cost of depreciable property. The methods
and rates of depreciation used by the Company have not varied materially from
the methods and rates which would have been used if the Company were not
regulated and not subject to the provisions prescribed by SFAS 71. In the
past, the methods and rates have been determined by depreciation studies and
approved by the various regulatory bodies. The Company periodically evaluates
its depreciation rates considering the past and expected future experience in
the operation of its facilities. The Company has proposed to more rapidly
recover the Company's investment in nuclear generating assets of Wolf Creek to
reduce the capital costs to a level more closely paralleling that of
non-nuclear generating facilities (For information regarding such proposal,
see Note 4).
<PAGE 41>
Consolidated Statements of Cash Flows: For purposes of the Consolidated
Statements of Cash Flows, the Company considers highly liquid collateralized
debt instruments purchased with a maturity of three months or less to be cash
equivalents.

Income Taxes: The Company accounts for income taxes in accordance with the
provisions of Statement of Financial Accounting Standards No. 109 "Accounting
for Income Taxes" (SFAS 109). Under SFAS 109, deferred tax assets and
liabilities are recognized based on temporary differences in amounts recorded
for financial reporting purposes and their respective tax bases (See Note 9).

Investment tax credits previously deferred are being amortized to income
over the life of the property which gave rise to the credits.

Revenues: Operating revenues for both electric and natural gas services
include estimated amounts for services rendered but unbilled at the end of
each year. Unbilled revenues of $66 million and $61 million are recorded as a
component of accounts receivable and unbilled revenues (net) on the
Consolidated Balance Sheets as of December 31, 1995 and 1994, respectively.

The Company's recorded reserves for doubtful accounts receivable totaled
$4.9 million and $3.4 million at December 31, 1995 and 1994, respectively.

Investments: The Company records its investment and ownership percentage
of earnings or losses utilizing the equity method of accounting when the
Company's ownership interest allows it to exert significant influence over the
operations of an investee.

In December 1995, a non-regulated subsidiary's net assets were exchanged
for a 20% equity interest in a corporation supplying gas compression units to
natural gas producers. This investment is valued at approximately $56
million, and is included in net non-utility investments on the Consolidated
Balance Sheets as of December 31, 1995.

Debt Issuance and Reacquisition Expense: Debt premium, discount, and
issuance expenses are amortized over the life of each issue. Under regulatory
procedures, debt reacquisition expenses are amortized over the remaining life
of the reacquired debt or, if refinanced, the life of the new debt.

Risk Management: The Company is exposed to price risk from fluctuating
natural gas prices resulting from gas marketing activities of a non-regulated
subsidiary. This subsidiary utilizes various financial instruments to
mitigate much of its exposure to fluctuating market prices of commodities.
These financial instruments are designated as hedges and as such, gains or
losses associated with these financial instruments are deferred until the
commodity being hedged is delivered.

At December 31, 1995, this subsidiary had entered into natural gas
financial instruments with a contractual volume of 11.05 billion cubic feet
expiring through 2000. The market value of these instruments as of December
31, 1995, was $2.7 million more than the contract value.

Fuel Costs: The cost of nuclear fuel in process of refinement,
conversion, enrichment, and fabrication is recorded as an asset at original
cost and is amortized to expense based upon the quantity of heat produced for
the generation of electricity. The accumulated amortization of nuclear fuel
in the reactor at December 31, 1995 and 1994, was $28.5 million and $13.6
million, respectively.
<PAGE 42>
Cash Surrender Value of Life Insurance Contracts: The following amounts
related to corporate-owned life insurance contracts (COLI) are recorded in
Corporate-owned Life Insurance (net) on the Consolidated Balance Sheets:

1995 1994
(Dollars in Millions)
Cash surrender value of contracts. . . $ 479.9 $ 408.9
Borrowings against contracts . . . . . (435.8) (391.9)
COLI (net). . . . . . . . . . $ 44.1 $ 17.0

Income is recorded for increases in cash surrender value and net death
proceeds. Interest expense is recognized for COLI borrowings except for
certain contracts entered into in 1993 and 1992. The net income generated
from COLI contracts purchased prior to 1992 including the tax benefit of the
interest deduction and premium expenses are recorded as Corporate-owned Life
Insurance (net) on the Consolidated Statements of Income. The income from
increases in cash surrender value and net death proceeds was $22.7 million in
1995, $15.6 million in 1994, and $19.7 million in 1993. The interest expense
deduction taken was $25.4 million for 1995, $21.0 million for 1994, and $11.9
million for 1993.

The COLI contracts entered into in 1993 and 1992 were established to
mitigate the cost of postretirement and postemployment benefits. As approved
by the KCC, the Company is using the net income stream generated by these COLI
policies to offset the costs of postretirement and postemployment benefits. A
significant portion of this income stream relates to the tax deduction
currently taken for interest incurred on contract borrowings under these COLI
policies. The amount of the interest deduction used to offset these benefits
costs was $7.0 million for 1995, $5.8 million for 1994, and $4.5 million for
1993.

Federal legislation is pending, which, if enacted, may substantially
reduce or eliminate the tax deduction for interest on COLI borrowings, and
thus reduce a significant portion of the net income stream generated by the
COLI contracts (See Note 6).

Reclassifications: Certain amounts in prior years have been reclassified
to conform with classifications used in the current year presentation.

2. SALES OF MISSOURI NATURAL GAS DISTRIBUTION PROPERTIES

On January 31, 1994, the Company sold substantially all of its Missouri
natural gas distribution properties and operations to Southern Union Company
(Southern Union). The Company sold the remaining Missouri properties to
United Cities Gas Company (United Cities) on February 28, 1994. The
properties sold to Southern Union and United Cities are referred to herein as
the "Missouri Properties."
<PAGE 43>
The portion of the Missouri Properties purchased by Southern Union was
sold for $404 million. For information regarding litigation in connection
with the sale of the Missouri Properties to Southern Union, see Note 3.
United Cities purchased the Company's natural gas distribution system in and
around the City of Palmyra, Missouri for $665,000.

During the first quarter of 1994, the Company recognized a gain of
approximately $19.3 million, net of tax, on the sales of the Missouri
Properties. As of the respective dates of the sales of the Missouri
Properties, the Company ceased recording the results of operations, and
removed the assets and liabilities from the Consolidated Balance Sheet related
to the Missouri Properties. The gain is reflected in Other Income and
Deductions, on the Consolidated Statements of Income.

The following table reflects the approximate operating revenues and
operating income included in the Company's consolidated results for the years
ended December 31, 1994 and 1993, and net utility plant at December 31, 1993,
related to the Missouri Properties:

3. LEGAL PROCEEDINGS

On June 1, 1994, Southern Union filed an action against the Company, The
Bishop Group, Ltd., and other entities affiliated with The Bishop Group,
alleging, among other things, breach of the Missouri Properties sale agreement
relating to certain gas supply contracts between the Company and various
Bishop entities. Southern Union assumed these contracts upon the sale of the
Missouri Properties and requested unspecified monetary damages as well as
declaratory relief. On August 1, 1994, the Company filed its answer and
counterclaim denying all claims asserted against it by Southern Union
including claims related to the purchase price of the Missouri Properties.
The disputed purchase price adjustments were submitted to an arbitrator in
February 1995. Based on the decision of the arbitrator rendered in April
1995, Southern Union paid the Company $3.6 million including interest. For
additional information regarding the sales of the Missouri Properties, see
Note 2.

In May, 1995, Southern Union filed its amended complaint against the
Company, alleging a variety of new theories in support of its revised damage
claims. Southern Union now claims that it has overpaid the Company from
<PAGE 44>
between $38 to $53 million dollars for the Missouri Properties. The Company
has filed its amended answer denying each and every claim made by Southern
Union in its amended complaint. The Company has filed motions for summary
judgment against the amended complaint. The resolution of this matter is not
expected to have a material adverse impact on the Company.

Subject to the approval of the KCC, the Company has entered into five
new gas supply contracts with certain Bishop entities which are currently
regulated by the KCC. A contested hearing was held for the approval of those
contracts. While the case was under consideration by the KCC, the FERC issued
an order under which it extended jurisdiction over the Bishop entities. On
November 3, 1995, the KCC stayed its consideration of the contracts between
the Company and the Bishop entities until the FERC takes final appealable
action on its assertion of jurisdiction over the Bishop entities.

The Company and its subsidiaries are involved in various other legal,
environmental, and regulatory proceedings. Management believes that adequate
provision has been made within the Consolidated Financial Statements for these
other matters and accordingly believes their ultimate dispositions will not
have a material adverse effect upon the Company's overall financial position
or results of operations.

4. RATE MATTERS AND REGULATION

The Company, under rate orders from the KCC, OCC, and FERC, recovers
increases in fuel and natural gas costs through fuel adjustment clauses for
wholesale and certain retail electric customers and various purchased gas
adjustment clauses (PGA) for natural gas customers. The KCC and the OCC
require the annual difference between actual gas cost incurred and cost
recovered through the application of the PGA be deferred and amortized through
rates in subsequent periods.

KCC Rate Proceedings: On August 17, 1995, the Company filed with the KCC
a request to more rapidly recover its investment in its assets of Wolf Creek
over the next seven years. If the request is granted, depreciation expense
for Wolf Creek will increase by approximately $50 million for each of the next
seven years. As a result of this proposal, the Company will also seek to
reduce electric rates for KGE customers by approximately $9 million annually
for the same seven year period.

The request also reduces the annual depreciation expense by approximately
$11 million for electric transmission, distribution and certain generating
plant assets to reflect the effect of increasing useful lives of these
properties. Hearings before the KCC on the depreciation changes and voluntary
rate reductions are expected to occur in May 1996.

In addition, the Company filed a $36 million annual rate increase request
for its Kansas natural gas properties. The increase is being sought to
recover costs associated with its service line replacement program as well as
other increased operating costs (See discussion below regarding KCC order
issued on January 24, 1992). In February 1996, the KCC staff submitted
testimony related to this rate increase supporting the Company's increase of
current gas rates of $36 million annually. The ultimate decision related to
the Company's request resides with the KCC. Hearings before the KCC on the
gas rate increase proposal began February 19, 1996, with an order expected by
April 1996.
<PAGE 45>
On June 30, 1995, the KCC granted a certificate authorizing the
business operations of the Market Center. The Market Center, which began
operations on July 1, 1995, provides natural gas transportation, storage, and
gathering services, as well as balancing, and title transfer capability. The
Company transferred certain natural gas transmission assets having a net book
value of approximately $50 million to the Market Center.

On January 24, 1992, the KCC issued an order allowing the Company to
continue the deferral of service line replacement program costs incurred since
January 1, 1992, including depreciation, property taxes, and carrying costs
for recovery in the next general rate case. At December 31, 1995,
approximately $14.2 million of these deferrals have been included in Deferred
Charges and Other Assets, Other, on the Consolidated Balance Sheet.

Tight Sands: In December 1991, the KCC and the OCC approved agreements
authorizing the Company to refund to customers approximately $40 million of
the proceeds of the Tight Sands antitrust litigation settlement to be
collected on behalf of Western Resources' natural gas customers. To secure
the refund of settlement proceeds, the Commissions authorized the
establishment of an independently administered trust to collect and maintain
cash receipts received under Tight Sands settlement agreements and provide for
the refunds made. The trust has a term of ten years.

Rate Stabilization Plan: In 1988, the KCC ordered the accrual of phase-in
revenues to be discontinued by KGE effective December 31, 1988. KGE began
amortizing the phase-in revenue asset on a straight-line basis over 9 1/2
years beginning January 1, 1989. At December 31, 1995, approximately $44
million of deferred phase-in revenues remain to be recovered.

Coal Contract Settlements: In March 1990, the KCC issued an order
allowing KGE to defer its share of a 1989 coal contract settlement with the
Pittsburg and Midway Coal Mining Company amounting to $22.5 million. This
amount was recorded as a deferred charge and is included in Deferred Charges
and Other Assets on the Consolidated Balance Sheet. The settlement resulted
in the termination of a long-term coal contract. The KCC permitted KGE to
recover this settlement as follows: 76% of the settlement plus a return over
the remaining term of the terminated contract (through 2002) and 24% to be
amortized to expense with a deferred return equivalent to the carrying cost of
the asset.

In February 1991, KGE paid $8.5 million to settle a coal contract lawsuit
with AMAX Coal Company and recorded the payment as a deferred charge in
Deferred Charges and Other Assets on the Consolidated Balance Sheet. The KCC
approved the recovery of the settlement plus a return, equivalent to the
carrying cost of the asset, over the remaining term of the terminated contract
(through 1996).

5. COMMITMENTS AND CONTINGENCIES

As part of its ongoing operations and construction program, the Company
has commitments under purchase orders and contracts which have an unexpended
balance of approximately $92 million at December 31, 1995. Approximately $20
million is attributable to modifications to upgrade the three turbines at
Jeffrey Energy Center to be completed by December 31, 1998.
<PAGE 46>
In January 1994, the Company entered into an agreement with Oklahoma
Municipal Power Authority (OMPA). Under the agreement, the Company received a
prepayment of approximately $41 million for which the Company will provide
capacity and transmission services to OMPA through the year 2013.

Investment: On December 21, 1995 the Company entered into Stock Purchase
and Equity Agreements with Laidlaw Transportation Inc. to acquire up to 30.8
million common shares of ADT Limited (ADT). ADT's principal business is
providing electronic security services. On January 26, 1996, the Company
purchased 15.4 million of such ADT common shares for $215.6 million ($14 per
share). The Company purchased the remaining 15.4 million common shares held
by Laidlaw Transportation Inc. on March 18, 1996 for approximately $228
million or $14.80 per share.

The shares purchased represent approximately 24% of ADT's common equity.
The Company intends to account for its investment in ADT using the equity
method of accounting.

Manufactured Gas Sites: The Company has been associated with 15 former
manufactured gas sites located in Kansas which may contain coal tar and other
potentially harmful materials. The Company and the Kansas Department of
Health and Environment (KDHE) entered into a consent agreement governing all
future work at the 15 sites. The terms of the consent agreement will allow
the Company to investigate these sites and set remediation priorities based
upon the results of the investigations and risk analysis. The prioritized
sites will be investigated over a 10 year period. The agreement will allow
the Company to set mutual objectives with the KDHE in order to expedite
effective response activities and to control costs and environmental impact.
The costs incurred for site investigation and risk assessment in 1995 and 1994
were minimal. The Company is aware of other Midwestern utilities which have
incurred remediation costs ranging between $500,000 and $10 million per site.
The KCC has permitted another Kansas utility to recover its remediation costs
through rates. To the extent that such remediation costs are not recovered
through rates, the costs could be material to the Company's financial position
or results of operations depending on the degree of remediation required and
number of years over which the remediation must be completed.

Superfund Sites: The Company is one of numerous potentially responsible
parties at a groundwater contamination site in Wichita, Kansas (Wichita site)
which is listed by the EPA as a Superfund site. The Company has previously
been associated with other Superfund sites of which the Company's liability
has been classified as de minimis and any potential obligations have been
settled at minimal cost. In 1994, the Company settled Superfund obligations
at three sites for a total of $57,500. The Company's obligation at the
Wichita site appears to be limited based on this experience. In the opinion
of the Company's management, the resolution of this matter is not expected to
have a material impact on the Company's financial position or results of
operations.

Clean Air Act: The Clean Air Act Amendments of 1990 (the Act) require a
two-phase reduction in certain emissions. To meet the monitoring and
reporting requirements under the acid rain program, the Company installed
continuous monitoring and reporting equipment at a total cost of approximately
$10 million from 1993 through 1995. The Company does not expect additional
equipment acquisitions or other material expenditures to be needed to meet
Phase II sulfur dioxide requirements.
<PAGE 47>
Other Environmental Matters: As part of the sale of the Company's
Missouri Properties to Southern Union, Southern Union assumed responsibility
for any environmental matters related to the Missouri Properties. The Company
may be liable for up to a maximum of $7.5 million for 15 years after the date
of the sale under a sharing arrangement with Southern Union for environmental
matters pending or discovered within the two year period ended January 31,
1996.

Decommissioning: The Company accrues decommissioning costs over the
expected life of the Wolf Creek generating facility. The accrual is based on
estimated unrecovered decommissioning costs which consider inflation over the
remaining estimated life of the generating facility and are net of expected
earnings on amounts recovered from customers and deposited in an external
trust fund.

On June 9, 1994, the KCC issued an order approving the estimated
decommissioning costs as determined by a 1993 Wolf Creek Decommissioning Cost
Study to be recovered in rates. The cost study estimated the Company's share
of decommissioning costs to be $595 million or approximately $174 million in
1993 dollars. The decommissioning costs are currently expected to be incurred
during the period 2025 through 2033. These costs were calculated using an
assumed inflation rate of 3.45% and an average after tax expected return on
trust fund assets of 5.9%. Decommissioning costs are being charged to
operating expenses in accordance with the KCC order. Amounts expensed
approximated $3.6 million in 1995 and will increase annually to $5.5 million
in 2024.

The Company's investment in the decommissioning fund, including
reinvested earnings approximated $25.0 million and $16.9 million at December
31, 1995 and December 31, 1994, respectively. Trust fund earnings accumulate
in the fund balance and increase the recorded decommissioning liability.
These amounts are reflected in Decommissioning Trust, and the related
liability is included in Deferred Credits and Other Liabilities, Other, on the
Consolidated Balance Sheets.

The staff of the SEC has questioned certain current accounting practices
used by nuclear electric generating station owners regarding the recognition,
measurement, and classification of decommissioning costs for nuclear electric
generating stations. In response to these questions, the FASB is expected to
issue new accounting standards for removal costs, including decommissioning in
1996. If current electric utility industry accounting practices for such
decommissioning costs are changed: (1) annual decommissioning expenses could
increase, (2) the estimated present value of decommissioning costs could be
recorded as a liability rather than as accumulated depreciation, and (3) trust
fund income from the external decommissioning trusts could be reported as
investment income rather than as a reduction to decommissioning expense.
When revised accounting guidance is issued, the Company will also have to
evaluate its effect on accounting for removal costs of other long-lived
assets. At this time, the Company is not able to predict what effect such
changes would have on results of operations, financial position, or related
regulatory practices until the final issuance of revised accounting guidance.

The Company carries premature decommissioning insurance which has several
restrictions. One of these is that it can only be used if Wolf Creek incurs
an accident exceeding $500 million in expenses to safely stabilize the
<PAGE 48>
reactor, to decontaminate the reactor and reactor station site in accordance
with a plan approved by the Nuclear Regulatory Commission (NRC), and to pay
for on-site property damages. This decommissioning insurance will only be
available if the insurance funds are not needed to implement the NRC-approved
plan for stabilization and decontamination.

Nuclear Insurance: The Price-Anderson Act limits the combined public
liability of the owners of nuclear power plants to $8.9 billion for a single
nuclear incident. If this liability limitation is insufficient, the U.S.
Congress will consider taking whatever action is necessary to compensate the
public for valid claims. The Wolf Creek owners (Owners) have purchased the
maximum available private insurance of $200 million and the balance is
provided by an assessment plan mandated by the NRC. Under this plan, the
Owners are jointly and severally subject to a retrospective assessment of up
to $79.3 million ($37.3 million, Company's share) in the event there is a
major nuclear incident involving any of the nation's licensed reactors. This
assessment is subject to an inflation adjustment based on the Consumer Price
Index and applicable premium taxes. There is a limitation of $10 million
($4.7 million, Company's share) in retrospective assessments per incident, per
year.

The Owners carry decontamination liability, premature decommissioning
liability, and property damage insurance for Wolf Creek totaling approximately
$2.8 billion ($1.3 billion, Company's share). This insurance is provided by a
combination of "nuclear insurance pools" ($500 million) and Nuclear Electric
Insurance Limited (NEIL) ($2.3 billion). In the event of an accident,
insurance proceeds must first be used for reactor stabilization and site
decontamination. The Company's share of any remaining proceeds can be used
for property damage or premature decommissioning costs up to $1.3 billion
(Company's share). Premature decommissioning insurance cost recovery is
excess of funds previously collected for decommissioning (as discussed under
"Decommissioning").

The Owners also carry additional insurance with NEIL to cover costs of
replacement power and other extra expenses incurred during a prolonged outage
resulting from accidental property damage at Wolf Creek. If losses incurred
at any of the nuclear plants insured under the NEIL policies exceed premiums,
reserves, and other NEIL resources, the Company may be subject to
retrospective assessments under the current policies of approximately $11
million per year.

Fuel Commitments: To supply a portion of the fuel requirements for its
generating plants, the Company has entered into various commitments to obtain
nuclear fuel and coal. Some of these contracts contain provisions for price
escalation and minimum purchase commitments. At December 31, 1995, WCNOC's
nuclear fuel commitments (Company's share) were approximately $15.3 million
<PAGE 49>
for uranium concentrates expiring at various times through 2001, $120.8
million for enrichment expiring at various times through 2014, and $72.7
million for fabrication through 2025. At December 31, 1995, the Company's
coal contract commitments in 1995 dollars under the remaining terms of the
contracts were approximately $2.5 billion. The largest coal contract expires
in 2020, with the remaining coal contracts expiring at various times through
2013.

Energy Act: As part of the 1992 Energy Policy Act, a special assessment
is being collected from utilities for a uranium enrichment, decontamination,
and decommissioning fund. The Company's portion of the assessment for Wolf
Creek is approximately $7 million, payable over 15 years. Management expects
such costs to be recovered through the ratemaking process.

6. EMPLOYEE BENEFIT PLANS

Pension: The Company maintains qualified noncontributory defined benefit
pension plans covering substantially all employees. Pension benefits are
based on years of service and the employee's compensation during the five
highest paid consecutive years out of ten before retirement. The Company's
policy is to fund pension costs accrued, subject to limitations set by the
Employee Retirement Income Security Act of 1974 and the Internal Revenue Code.

Salary Continuation: The Company maintains a non-qualified Executive
Salary Continuation Program for the benefit of certain management employees,
including executive officers.

The following tables provide information on the components of pension and
salary continuation costs under Statement of Financial Accounting Standards
No. 87 "Employers' Accounting for Pension Plans" (SFAS 87), funded status and
actuarial assumptions for the Company:

Year Ended December 31, 1995 1994 1993
(Dollars in Thousands)
SFAS 87 Expense:
Service cost. . . . . . . . . . $ 11,059 $ 10,197 $ 9,778
Interest cost on projected
benefit obligation. . . . . . 32,416 29,734 35,688
(Gain) loss on plan assets. . . (102,731) 7,351 (64,113)
Deferred investment gain (loss) 70,810 (38,457) 29,190
Net amortization. . . . . . . . 1,132 245 (669)
Net expense . . . . . . . . $ 12,686 $ 9,070 $ 9,874

<PAGE 50>
December 31, 1995 1994 1993
(Dollars in Thousands)
Reconciliation of Funded Status:
Actuarial present value of
benefit obligations:
Vested . . . . . . . . . . . $331,027 $278,545 $353,023
Non-vested . . . . . . . . . 21,775 19,132 26,983
Total. . . . . . . . . . . $352,802 $297,677 $380,006
Plan assets (principally debt
and equity securities) at
fair value . . . . . . . . . . . $444,608 $375,521 $490,339
Projected benefit obligation . . . 456,707 378,146 468,996
Funded status. . . . . . . . . . . (12,099) (2,625) 21,343
Unrecognized transition asset. . . (527) (2,205) (2,756)
Unrecognized prior service costs . 57,087 47,796 64,217
Unrecognized net (gain). . . . . . (75,312) (56,079) (108,783)
Accrued liability. . . . . . . . $(30,851) $(13,113) $(25,979)

Year Ended December 31, 1995 1994 1993
Actuarial Assumptions:
Discount rate. . . . . . . . . . 7.5% 8.0-8.5% 7.0-7.75%
Annual salary increase rate. . . 4.75% 5.0% 5.0%
Long-term rate of return . . . . 8.5-9.0% 8.0-8.5% 8.0-8.5%

Postretirement: The Company adopted the provisions of Statement of
Financial Accounting Standards No. 106 "Employers' Accounting for
Postretirement Benefits Other Than Pensions" (SFAS 106) in the first quarter
of 1993. This statement requires the accrual of postretirement benefits other
than pensions, primarily medical benefit costs, during the years an employee
provides service.

Based on actuarial projections and adoption of the transition method of
implementation which allows a 20-year amortization of the accumulated benefit
obligation, postretirement benefits expenses approximated $15.0 million and
$12.4 million for 1995 and 1994, respectively. The Company's total
postretirement benefit obligation approximated $123.2 million and $114.6
million at December 31, 1995 and 1994, respectively. In addition, the Company
received an order from the KCC permitting the initial deferral of SFAS 106
expense in excess of amounts previously recognized. To mitigate the impact
incremental SFAS 106 expense will have on rate increases, the Company will
include in the future computation of cost of service the actual postretirement
benefits expenses and an income stream generated from COLI contracts purchased
in 1993 and 1992. To the extent postretirement benefits expenses exceed
income from the COLI program, this excess is being deferred (in accordance
with the provisions of the FASB Emerging Issues Task Force Issue No. 92-12)
and will be offset by income generated through the deferral period by the COLI
program. Because these expenses were deferred, there was no effect on the
results of continuing operations in 1995. At December 31, 1995, approximately
$25.3 million of postretirement expenses had been deferred pursuant to the KCC
order. Pending federal legislation may substantially reduce or eliminate tax
benefits associated with COLI contracts. If this legislation is enacted or
should the income stream generated by the COLI program not be sufficient to
offset postretirement benefit costs on an accrual basis, the KCC order allows
the Company to seek recovery of a deficiency through the ratemaking process.
Regulatory precedents established by the KCC generally permit the accrual
costs of postretirement benefits to be recovered in rates.
<PAGE 51>
The following table summarizes the status of the Company's postretirement
benefit plans for financial statement purposes and the related amounts
included in the Consolidated Balance Sheets:

December 31, 1995 1994
(Dollars in Thousands)
Reconciliation of Funded Status:
Actuarial present value of postretirement
benefit obligations:
Retirees. . . . . . . . . . . . . . . . . . . $ 81,402 $ 68,570
Active employees fully eligible . . . . . . . 7,645 13,549
Active employees not fully eligible . . . . . 34,144 32,484
Total . . . . . . . . . . . . . . . . . . . 123,191 114,603
Fair value of plan assets . . . . . . . . . . . . 46 -
Funded Status . . . . . . . . . . . . . . . . . . (123,145) (114,603)
Unrecognized prior service cost . . . . . . . . . (8,900) (9,391)
Unrecognized transition obligation. . . . . . . . 111,443 117,967
Unrecognized net (gain) . . . . . . . . . . . . . (7,271) (14,489)
Accrued postretirement benefit costs. . . . . . . $(27,873) $(20,516)

Year Ended December 31, 1995 1994
Actuarial Assumptions:
Discount rate . . . . . . . . . . . . . . . . . 7.5 % 8.0-8.5 %
Annual salary increase rate . . . . . . . . . . 4.75 % 5.0 %
Expected rate of return . . . . . . . . . . . . 9.0 % 8.5 %

For measurement purposes, an annual health care cost growth rate of 11%
was assumed for 1995, decreasing one percent per year to five percent in 2001
and thereafter. The health care cost trend rate has a significant effect on
the projected benefit obligation. Increasing the trend rate by one percent
each year would increase the present value of the accumulated projected
benefit obligation by $4.3 million and the aggregate of the service and
interest cost components by $0.4 million.

Postemployment: The Company adopted Statement of Financial Accounting
Standards No. 112 "Employers' Accounting for Postemployment Benefits" (SFAS
112) in the first quarter of 1994, which established accounting and reporting
standards for postemployment benefits. The statement requires the Company to
recognize the liability to provide postemployment benefits when the liability
has been incurred. The Company received an order from the KCC permitting the
initial deferral of SFAS 112 expense. To mitigate the impact SFAS 112 expense
will have on rate increases, the Company will include in the future
computation of cost of service the actual SFAS 112 transition costs and
expenses and an income stream generated from COLI contracts purchased in 1993
and 1992. At December 31, 1995 approximately $8.3 million of postemployment
expenses had been deferred pursuant to the KCC order. Pending federal
legislation may substantially reduce or eliminate tax benefits associated with
COLI contracts. If this legislation is enacted or should the income stream
generated by the COLI program not be sufficient to offset postemployment
benefit costs on an accrual basis, the KCC order allows the Company to seek
recovery of such deficit through the ratemaking process. The 1995 and 1994
expense under SFAS 112 was approximately $3.6 million and $2.7 million,
respectively. At December 31, 1995 and 1994, the Company's SFAS 112 liability
recorded on the Consolidated Balance Sheets was approximately $8.7 million and
$8.4 million, respectively.
<PAGE 52>
Savings: The Company maintains savings plans in which substantially all
employees participate. The Company matches employees' contributions up to
specified maximum limits. The funds of the plans are deposited with a trustee
and invested at each employee's option in one or more investment funds,
including a Company stock fund. The Company's contributions were $5.1
million, $5.1 million, and $5.8 million for 1995, 1994, and 1993,
respectively.

7. COMMON STOCK, PREFERRED STOCK, PREFERENCE STOCK,
AND OTHER MANDATORILY REDEEMABLE SECURITIES

The Company's Restated Articles of Incorporation, as amended, provides for
85,000,000 authorized shares of common stock. At December 31, 1995,
62,855,961 shares were outstanding.

The Company has a Dividend Reinvestment and Stock Purchase Plan (DRIP).
Shares issued under the DRIP may be either original issue shares or shares
purchased on the open market. At December 31, 1995, 3,017,627 shares were
available under the DRIP registration statement.

Not subject to mandatory redemption: The cumulative preferred stock is
redeemable in whole or in part on 30 to 60 days notice at the option of the
Company.

Subject to mandatory redemption: The mandatory sinking fund provisions of
the 8.50% Series preference stock require the Company to redeem 50,000 shares
annually beginning on July 1, 1997, at $100 per share. The Company may, at
its option, redeem up to an additional 50,000 shares on each July 1, at $100
per share. The 8.50% Series also is redeemable in whole or in part, at the
option of the Company, subject to certain restrictions on refunding, at a
redemption price of $106.23, $105.67, and $105.10 per share beginning July 1,
1995, 1996 and 1997, respectively.

The mandatory sinking fund provisions of the 7.58% Series preference stock
require the Company to redeem 25,000 shares annually beginning on April 1,
2002, and each April 1 through 2006 and the remaining shares on April 1, 2007,
all at $100 per share. The Company may, at its option, redeem up to an
additional 25,000 shares on each April 1 at $100 per share. The 7.58% Series
also is redeemable in whole or in part, at the option of the Company, subject
to certain restrictions on refunding, at a redemption price of $105.31,
$104.55, and $103.79 per share beginning April 1, 1995, 1996, and 1997,
respectively.

Other Mandatorily Redeemable Securities: On December 14, 1995, Western
Resources Capital I, a wholly-owned trust, issued four million preferred
securities of 7 7/8% Cumulative Quarterly Income Preferred Securities, Series
A, for $100 million. The trust interests represented by the preferred
securities are redeemable at the option of Western Resources Capital I, on or
after December 11, 2000, at $25 per preferred security plus accrued interest
and unpaid dividends. Holders of the securities are entitled to receive
distributions at an annual rate of 7 7/8% of the liquidation preference value
of $25. Distributions are payable quarterly, and in substance are tax
deductible by the Company. The sole asset of the trust is $103 million
principal amount of 7 7/8% Deferrable Interest Subordinated Debentures, Series
A due December 11, 2025 (the Subordinated Debentures).
<PAGE 53>
In addition to the Company's obligations under the Subordinated
Debentures, the Company has agreed, pursuant to a guarantee issued to the
trust, the provisions of the trust agreement establishing the trust and a
related expense agreement to guarantee on a subordinated basis payment of
distributions on the preferred securities (but not if the trust does not have
sufficient funds to pay such distributions) and to pay all of the expenses of
the trust (collectively, the "Back-up Undertakings").

Considered together, the Back-up Undertakings constitute a full and
unconditional guarantee by the Company of the trust obligations under the
preferred securities. The securities are shown as Western Resources Obligated
Mandatorily Redeemable Preferred Securities of Subsidiary Trust holding solely
Subordinated Debentures on the Consolidated Balance Sheets and Consolidated
Statements of Capitalization.

8. JOINT OWNERSHIP OF UTILITY PLANTS

Company's Ownership at December 31, 1995
In-Service Invest- Accumulated Net Per-
Dates ment Depreciation (MW) cent
(Dollars in Thousands)
La Cygne 1 (a) Jun 1973 $ 155,566 $ 99,133 341 50
Jeffrey 1 (b) Jul 1978 285,357 116,771 587 84
Jeffrey 2 (b) May 1980 289,443 109,858 617 84
Jeffrey 3 (b) May 1983 389,157 143,862 591 84
Wolf Creek (c) Sep 1985 1,371,878 335,941 548 47

(a) Jointly owned with Kansas City Power & Light Company (KCPL)
(b) Jointly owned with UtiliCorp United Inc.
(c) Jointly owned with KCPL and Kansas Electric Power Cooperative, Inc.

Amounts and capacity represent the Company's share. The Company's share
of operating expenses of the plants in service above, as well as such expenses
for a 50% undivided interest in La Cygne 2 (representing 335 MW capacity) sold
and leased back to the Company in 1987, are included in operating expenses on
the Consolidated Statements of Income. The Company's share of other
transactions associated with the plants is included in the appropriate
classification in the Company's Consolidated Financial Statements.

<PAGE 54>
9. INCOME TAXES

Under SFAS 109, temporary differences gave rise to deferred tax assets and
deferred tax liabilities at December 31, 1995 and 1994, respectively, as
follows:

1995 1994
(Dollars in Thousands)
Deferred Tax Assets:
Deferred gain on sale-leaseback. . . . . $ 105,007 $ 110,556
Alternative Minimum tax carry forwards . 18,740 41,163
Other. . . . . . . . . . . . . . . . . . 30,789 29,162
Total Deferred Tax Assets. . . . . . . $ 154,536 $ 180,881
Deferred Tax Liabilities:
Accelerated Depreciation & Other . . . . $ 653,134 $ 661,433
Acquisition Premium. . . . . . . . . . . 315,513 318,190
Deferred Future Income Taxes . . . . . . 282,476 283,297
Other. . . . . . . . . . . . . . . . . . 70,883 70,386
Total Deferred Tax Liabilities. . . . $1,322,006 $1,333,306

Accumulated Deferred
Income Taxes, Net $1,167,470 $1,152,425

In accordance with various rate orders received from the KCC and the OCC,
the Company has not yet collected through rates the amounts necessary to pay a
significant portion of the net deferred income tax liabilities. As management
believes it is probable that the net future increases in income taxes payable
will be recovered from customers, it has recorded a deferred asset for these
amounts. These assets are also a temporary difference for which deferred
income tax liabilities have been provided.

At December 31, 1995, the Company has alternative minimum tax credits
generated prior to April 1, 1992, which carry forward without expiration, of
$18.7 million which may be used to offset future regular tax to the extent the
regular tax exceeds the alternative minimum tax. These credits have been
applied in determining the Company's net deferred income tax liability and
corresponding deferred future income taxes at December 31, 1995.

10. LONG-TERM DEBT

The amount of Western Resources' first mortgage bonds authorized by the
Western Resources Mortgage and Deed of Trust, dated July 1, 1939, as
supplemented, is unlimited. The amount of KGE's first mortgage bonds
authorized by the KGE Mortgage and Deed of Trust, dated April 1, 1940, as
supplemented, is limited to a maximum of $2 billion. Amounts of additional
bonds which may be issued are subject to property, earnings, and certain
restrictive provisions of each Mortgage.

Debt discount and expenses are being amortized over the remaining lives of
each issue. The Western Resources and KGE improvement and maintenance fund
requirements for certain first mortgage bond series can be met by bonding
additional property. With the retirement of certain Western Resources and KGE
pollution control series bonds, there are no longer any bond sinking fund
requirements. During 1996, $16 million of bonds will mature. $125 million of
bonds will mature in 1999 and $75 million of bonds will mature in 2000.

<PAGE 55>
In January 1993, the Company renegotiated its $600 million bank term loan
and revolving credit facility used to finance the Merger into a $350 million
revolving credit facility, secured by KGE common stock. On October 5, 1994,
the Company extended the term of this facility to expire on October 5, 1999.
The unused portion of the revolving credit facility may be used to provide
support for outstanding short-term debt. At December 31, 1995, there was $50
million outstanding under the facility.

Long-term debt outstanding at December 31, 1995 and 1994, was as follows:

1995 1994
(Dollars in Thousands)
Western Resources
First mortgage bond series:
7 1/4% due 1999. . . . . . . . . . . . . 125,000 125,000
8 7/8% due 2000. . . . . . . . . . . . . 75,000 75,000
7 1/4% due 2002. . . . . . . . . . . . . 100,000 100,000
8 1/2% due 2022. . . . . . . . . . . . . 125,000 125,000
7.65% due 2023. . . . . . . . . . . . . 100,000 100,000
525,000 525,000
Pollution control bond series:
Variable due 2032 (1). . . . . . . . . . 45,000 45,000
Variable due 2032 (2). . . . . . . . . . 30,500 30,500
6% due 2033. . . . . . . . . . . . . 58,420 58,500
133,920 134,000
KGE
First mortgage bond series:
5 5/8% due 1996. . . . . . . . . . . . . 16,000 16,000
7.60 % due 2003. . . . . . . . . . . . . 135,000 135,000
6 1/2% due 2005. . . . . . . . . . . . . 65,000 65,000
6.20 % due 2006. . . . . . . . . . . . . 100,000 100,000
316,000 316,000
Pollution control bond series:
5.10 % due 2023. . . . . . . . . . . . . 13,957 13,982
Variable due 2027 (3). . . . . . . . . . 21,940 21,940
7.0 % due 2031. . . . . . . . . . . . . 327,500 327,500
Variable due 2032 (4). . . . . . . . . . 14,500 14,500
Variable due 2032 (5). . . . . . . . . . 10,000 10,000
387,897 387,922

Revolving Credit Agreement 50,000 -

Less:
Unamortized debt discount. . . . . . . . 5,554 5,814
Long-term debt due within one year . . . 16,000 80
$1,391,263 $1,357,028

Rates at December 31, 1995: (1) 4.05%, (2) 4.049%, (3) 4.00%,
(4) 3.925% and (5) 4.00%

<PAGE 56>
11. SEGMENTS OF BUSINESS

The Company is principally a public utility engaged in the generation,
transmission, distribution, and sale of electricity in Kansas and the
transportation, distribution, and sale of natural gas in Kansas and Oklahoma.

Year Ended December 31, 1995 1994(1) 1993
(Dollars in Thousands)
Operating revenues:
Electric. . . . . . . . . . . $1,145,895 $1,121,781 $1,104,537
Natural gas . . . . . . . . . 426,176 496,162 804,822
1,572,071 1,617,943 1,909,359
Operating expenses excluding
income taxes:
Electric. . . . . . . . . . . 788,900 768,317 791,563
Natural gas . . . . . . . . . 419,267 484,458 747,755
1,208,167 1,252,775 1,539,318
Income taxes:
Electric. . . . . . . . . . . 94,042 100,078 73,425
Natural gas . . . . . . . . . (5,522) (4,456) 4,553
88,520 95,622 77,978
Operating income:
Electric. . . . . . . . . . . 262,953 253,386 239,549
Natural gas . . . . . . . . . 12,431 16,160 52,514
$ 275,384 $ 269,546 $ 292,063

Identifiable assets at
December 31:
Electric. . . . . . . . . . . $4,470,359 $4,346,312 $4,231,277
Natural gas . . . . . . . . . 712,858 654,483 1,040,513
Other corporate assets(2) . . 307,460 370,234 140,258
$5,490,677 $5,371,029 $5,412,048
Other Information--
Depreciation and amortization:
Electric. . . . . . . . . . . $ 133,421 $ 123,696 $ 126,034
Natural gas . . . . . . . . . 23,494 27,934 38,330
156,915 $ 151,630 $ 164,364
Maintenance:
Electric. . . . . . . . . . . $ 87,942 $ 88,162 $ 87,696
Natural gas . . . . . . . . . 20,699 25,024 30,147
$ 108,641 $ 113,186 $ 117,843
Capital expenditures:
Electric. . . . . . . . . . . $ 153,931 $ 152,384 $ 137,874
Nuclear fuel. . . . . . . . . 28,465 20,590 5,702
Natural gas . . . . . . . . . 54,431 64,722 94,055
$ 236,827 $ 237,696 $ 237,631

(1)Information reflects the sales of the Missouri Properties (Note 2).

(2)Principally cash, temporary cash investments, non-utility assets, and
deferred charges.

<PAGE 57>
The portion of the table above related to the Missouri Properties is as
follows:

1994 1993
(Dollars in Thousands, Unaudited)
Natural gas revenues. . . . . . . . . $ 77,008 $349,749
Operating expenses excluding
income taxes. . . . . . . . 69,114 326,329
Income taxes. . . . . . . . . . . . . 2,897 2,672
Operating income. . . . . . . . . . . 4,997 20,748
Identifiable assets . . . . . . . . . - 398,464
Depreciation and amortization . . . . 1,274 12,668
Maintenance . . . . . . . . . . . . . 1,099 10,504
Capital expenditures. . . . . . . . . 3,682 38,821

12. SHORT-TERM DEBT

The Company's short-term financing requirements are satisfied through the
sale of commercial paper, short-term bank loans and borrowings under unsecured
lines of credit maintained with banks. Information concerning these
arrangements for the years ended December 31, 1995, 1994, and 1993, is set
forth below:

Year Ended December 31, 1995 1994 1993
(Dollars in Thousands)
Available lines of credit. . . . . $121,075 $145,000 $145,000
Short-term debt out-
standing at year end . . . . . . 203,450 308,200 440,895
Weighted average interest rate
on debt outstanding at year
end (including fees) . . . . . . 6.02% 6.25% 3.67%
Maximum amount of short-
term debt outstanding during
the period. . . .. . . . . . . . $355,615 $485,395 $443,895
Monthly average short-term debt. . 301,871 214,180 347,278
Weighted daily average interest
rates during the year
(including fees) . . . . . . . . 6.15% 4.63% 3.44%

In connection with the above arrangements, the Company has agreed to pay
certain fees to the banks. Available lines of credit and the unused portion
of the revolving credit facility are utilized to support the Company's
outstanding short-term debt.

13. LEASES

At December 31, 1995, the Company had leases covering various property and
equipment. Certain lease agreements in 1994 and 1993 met the criteria, as set
forth in Statement of Financial Accounting Standards No. 13, "Accounting for
Leases", for classification as capital leases. Capital lease payments were
$3.0 million and $3.3 million in 1994 and 1993, respectively. At December 31,
1995, the Company had no capital leases.

<PAGE 58>
Rental payments for operating leases and estimated rental commitments are
as follows:

Operating
Year Ended December 31, Leases
(Dollars in Thousands)
1993 $ 55,011
1994 55,076
1995 63,353
Future Commitments:
1996 55,992
1997 49,892
1998 45,069
1999 41,882
2000 41,292
Thereafter 721,744
Total $955,871

In 1987, KGE sold and leased back its 50% undivided interest in the La
Cygne 2 generating unit. The La Cygne 2 lease has an initial term of 29
years, with various options to renew the lease or repurchase the 50% undivided
interest. KGE remains responsible for its share of operation and maintenance
costs and other related operating costs of La Cygne 2. The lease is an
operating lease for financial reporting purposes.

As permitted under the La Cygne 2 lease agreement, the Company in 1992
requested the Trustee Lessor to refinance $341.1 million of secured facility
bonds of the Trustee and owner of La Cygne 2. The transaction was requested
to reduce recurring future net lease expense. In connection with the
refinancing on September 29, 1992, a one-time payment of approximately $27
million was made by the Company which has been deferred and is being amortized
over the remaining life of the lease and included in operating expense as part
of the future lease expense. At December 31, 1995, approximately $23.7
million of this deferral remained on the Consolidated Balance Sheet.

Future minimum annual lease payments, included in the table above,
required under the La Cygne 2 lease agreement are approximately $34.6 million
for each year through 2000 and $646 million over the remainder of the lease.

The gain of approximately $322 million realized at the date of the sale of
La Cygne 2 has been deferred for financial reporting purposes, and is being
amortized ($9.6 million per year) over the initial lease term in proportion to
the related lease expense. KGE's lease expense, net of amortization of the
deferred gain and a one-time payment, was approximately $22.5 million for
1995, 1994, and 1993.

<PAGE 59>
14. FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value
of each class of financial instruments for which it is practicable to estimate
that value as set forth in Statement of Financial Accounting Standards No. 107
"Disclosures about Fair Value of Financial Instruments":

Cash and Cash Equivalents-
The carrying amount approximates the fair value because of the
short-term maturity of these investments.
Decommissioning Trust-
The carrying amount is recorded at the fair value of the
decommissioning trust and is based on quoted market prices at
December 31, 1995 and 1994.
Variable-rate Debt-
The carrying amount approximates the fair value because of the
short-term variable rates of these debt instruments.
Fixed-rate Debt-
The fair value of the fixed-rate debt is based on the sum of
the estimated value of each issue taking into consideration the
interest rate, maturity, and redemption provisions of each issue.
Redeemable Preference Stock-
The fair value of the redeemable preference stock is based on the
sum of the estimated value of each issue taking into consideration
the dividend rate, maturity, and redemption provisions of each issue.
Other Mandatorily Redeemable Securities-
The fair value of the other mandatorily redeemable securities is based
on the sum of the estimated value of each issue taking into
consideration the dividend rate, maturity, and redemption provisions
of each issue.

The carrying values and estimated fair values of the Company's financial
instruments are as follows:

Carrying Value Fair Value
December 31, 1995 1994 1995 1994
(Dollars in Thousands)
Cash and cash
equivalents. . . . . . .$ 2,414 $ 2,715 $ 2,414 $ 2,715
Decommissioning trust. . . 25,070 16,944 25,070 16,633
Variable-rate debt . . . . 811,190 822,045 811,190 822,045
Fixed-rate debt. . . . . . 1,240,877 1,240,982 1,294,365 1,171,866
Redeemable preference
stock. . . . . . . . . . 150,000 150,000 160,405 155,375
Other Mandatorily
Redeemable Securities. . 100,000 - 102,000 -

The fair value estimates presented herein are based on information
available as of December 31, 1995 and 1994. These fair value estimates have
not been comprehensively revalued for the purpose of these financial
statements since that date, and current estimates of fair value may differ
significantly from the amounts presented herein.
<PAGE 60>
Certain subsidiaries of the Company use financial instruments to hedge
price fluctuations in their portfolios of commodity transactions. The
financial instruments used include futures and options traded on the New York
Mercantile Exchange and swaps and options traded in the over-the-counter
market. These subsidiaries are subject to credit risk on its over-the-counter
transactions and monitors the creditworthiness of its counterparties, which
consist primarily of large financial institutions.

15. QUARTERLY RESULTS (UNAUDITED)

The amounts in the table are unaudited but, in the opinion of management,
contain all adjustments (consisting only of normal recurring adjustments)
necessary for a fair presentation of the results of such periods. The
business of the Company is seasonal in nature and, in the opinion of
management, comparisons between the quarters of a year do not give a true
indication of overall trends and changes in operations.

First Second Third Fourth
(Dollars in Thousands, except Per Share Amounts)
1995
Operating revenues. . . . . . . $417,546 $333,380 $423,860 $397,285
Operating income. . . . . . . . 68,517 48,029 99,429 59,409
Net income. . . . . . . . . . . 41,575 21,716 71,905 46,480
Earnings applicable to
common stock. . . . . . . . . 38,220 18,362 68,550 43,125
Earnings per share. . . . . . . $ 0.62 $ 0.30 $ 1.10 $ 0.69
Dividends per share . . . . . . $ 0.505 $ 0.505 $ 0.505 $ 0.505
Average common shares
outstanding . . . . . . . . . 61,747 61,886 62,244 62,712
Common stock price:
High. . . . . . . . . . . . . $ 33 3/8 $ 32 1/2 $ 32 7/8 $ 34
Low . . . . . . . . . . . . . $ 28 5/8 $ 30 1/4 $ 29 3/4 $ 31

1994(1)
Operating revenues. . . . . . . $538,372 $341,132 $379,213 $359,226
Operating income. . . . . . . . 73,782 53,899 83,884 57,981
Net income. . . . . . . . . . . 66,133 30,247 57,679 33,388
Earnings applicable to
common stock. . . . . . . . . 62,779 26,892 54,324 30,034
Earnings per share. . . . . . . $ 1.02 $ 0.44 $ 0.88 $ 0.48
Dividends per share . . . . . . $ 0.495 $ 0.495 $ 0.495 $ 0.495
Average common shares
outstanding . . . . . . . . . 61,618 61,618 61,618 61,618
Common stock price:
High. . . . . . . . . . . . . $ 34 7/8 $ 29 3/4 $ 29 5/8 $ 29 1/4
Low . . . . . . . . . . . . . $ 28 1/4 $ 26 1/8 $ 26 3/4 $ 27 3/8

(1) Information reflects the sales of the Missouri Properties (Note 2).

<PAGE 61>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information relating to the Company's Directors required by Item 10 is
set forth in the Company's definitive proxy statement for its 1996 Annual
Meeting of Shareholders to be filed with the Commission. Such information is
incorporated herein by reference to the material appearing under the caption
Election of Directors in the proxy statement to be filed by the Company with
the Commission. See EXECUTIVE OFFICERS OF THE Company on page 18 for the
information relating to the Company's Executive Officers as required by Item
10.

ITEM 11. EXECUTIVE COMPENSATION

The information required by Item 11 is set forth in the Company's
definitive proxy statement for its 1996 Annual Meeting of Shareholders to be
filed with the Commission. Such information is incorporated herein by
reference to the material appearing under the captions Information Concerning
the Board of Directors, Executive Compensation, Compensation Plans, and Human
Resources Committee Report in the proxy statement to be filed by the Company
with the Commission.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by Item 12 is set forth in the Company's
definitive proxy statement for its 1996 Annual Meeting of Shareholders to be
filed with the Commission. Such information is incorporated herein by
reference to the material appearing under the caption Beneficial Ownership of
Voting Securities in the proxy statement to be filed by the Company with the
Commission.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

None.

<PAGE 62>
PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

The following financial statements are included herein.

FINANCIAL STATEMENTS

Report of Independent Public Accountants
Consolidated Balance Sheets, December 31, 1995 and 1994
Consolidated Statements of Income, for the years ended December 31, 1995,
1994 and 1993
Consolidated Statements of Cash Flows, for the years ended December 31,
1995, 1994 and 1993
Consolidated Statements of Taxes, for the years ended December 31, 1995,
1994 and 1993
Consolidated Statements of Capitalization, December 31, 1995 and
1994
Consolidated Statements of Common Stock Equity, for the years ended
December 31, 1995, 1994 and 1993
Notes to Consolidated Financial Statements

SCHEDULES

Schedules omitted as not applicable or not required under the Rules of
regulation S-X: I, II, III, IV, and V

REPORTS ON FORM 8-K
Form 8-K dated December 22, 1995.

<PAGE 63>
EXHIBIT INDEX

All exhibits marked "I" are incorporated herein by reference.

Description

3(a) -Restated Articles of Incorporation of the Company, as amended I
May 25, 1988. (filed as Exhibit 4 to Registration Statement
No. 33-23022)
3(b) -Certificate of Correction to Restated Articles of Incorporation. I
(filed as Exhibit 3(b) to the December 1991 Form 10-K)
3(c) -Amendment to the Restated Articles of Incorporation, as amended
May 5, 1992 (filed electronically)
3(d) -Amendments to the Restated Articles of Incorporation of the I
Company (filed as Exhibit 3 to the June 1994 Form 10-Q)
3(e) -By-laws of the Company. (filed electronically)
3(f) -Certificate of Designation of Preference Stock, 8.50% Series, I
without par value. (filed as Exhibit 3(d) to the December
1993 Form 10-K)
3(g) -Certificate of Designation of Preference Stock, 7.58% Series, I
without par value. (filed as Exhibit 3(e) to the December
1993 Form 10-K)
4(a) -Mortgage and Deed of Trust dated July 1, 1939 between the Company I
and Harris Trust and Savings Bank, Trustee. (filed as Exhibit
4(a) to Registration Statement No. 33-21739)
4(b) -First through Fifteenth Supplemental Indentures dated July 1, I
1939, April 1, 1949, July 20, 1949, October 1, 1949, December 1,
1949, October 4, 1951, December 1, 1951, May 1, 1952, October 1,
1954, September 1, 1961, April 1, 1969, September 1, 1970,
February 1, 1975, May 1, 1976 and April 1, 1977, respectively.
(filed as Exhibit 4(b) to Registration Statement No. 33-21739)
4(c) -Sixteenth Supplemental Indenture dated June 1, 1977. (filed as I
Exhibit 2-D to Registration Statement No. 2-60207)
4(d) -Seventeenth Supplemental Indenture dated February 1, 1978. I
(filed as Exhibit 2-E to Registration Statement No. 2-61310)
4(e) -Eighteenth Supplemental Indenture dated January 1, 1979. (filed I
as Exhibit (b) (1)-9 to Registration Statement No. 2-64231)
4(f) -Nineteenth Supplemental Indenture dated May 1, 1980. (filed as I
Exhibit 4(f) to Registration Statement No. 33-21739)
4(g) -Twentieth Supplemental Indenture dated November 1, 1981. (filed I
as Exhibit 4(g) to Registration Statement No. 33-21739)
4(h) -Twenty-First Supplemental Indenture dated April 1, 1982. (filed I
as Exhibit 4(h) to Registration Statement No. 33-21739)
4(i) -Twenty-Second Supplemental Indenture dated February 1, 1983. I
(filed as Exhibit 4(i) to Registration Statement No. 33-21739)
4(j) -Twenty-Third Supplemental Indenture dated July 2, 1986. (filed I
as Exhibit 4(j) to Registration Statement No. 33-12054)
4(k) -Twenty-Fourth Supplemental Indenture dated March 1, 1987. (filed I
as Exhibit 4(k) to Registration Statement No. 33-21739)
4(l) -Twenty-Fifth Supplemental Indenture dated October 15, 1988. I
(filed as Exhibit 4 to the September 1988 Form 10-Q)
4(m) -Twenty-Sixth Supplemental Indenture dated February 15, 1990. I
(filed as Exhibit 4(m) to the December 1989 Form 10-K)
<PAGE 64>

Description

4(n) -Twenty-Seventh Supplemental Indenture dated March 12, 1992. I
(filed as exhibit 4(n) to the December 1991 Form 10-K)
4(o) -Twenty-Eighth Supplemental Indenture dated July 1, 1992. I
(filed as exhibit 4(o) to the December 1992 Form 10-K)
4(p) -Twenty-Ninth Supplemental Indenture dated August 20, 1992. I
(filed as exhibit 4(p) to the December 1992 Form 10-K)
4(q) -Thirtieth Supplemental Indenture dated February 1, 1993. I
(filed as exhibit 4(q) to the December 1992 Form 10-K)
4(r) -Thirty-First Supplemental Indenture dated April 15, 1993. I
(filed as exhibit 4(r) to Form S-3, Registration Statement
No. 33-50069)
4(s) -Thirty-Second Supplemental Indenture dated April 15, 1994,
(filed electronically)

Instruments defining the rights of holders of other long-term debt not
required to be filed as exhibits will be furnished to the Commission
upon request.

10(a) -A Rail Transportation Agreement among Burlington Northern I
Railroad Company, the Union Pacific Railroad Company and the
Company (filed as Exhibit 10 to the June 1994 Form 10-Q)
10(b) -Agreement between the Company and AMAX Coal West Inc. I
effective March 31, 1993. (filed as Exhibit 10(a) to the
December 1993 Form 10-K)
10(c) -Agreement between the Company and Williams Natural Gas Company I
dated October 1, 1993. (filed as Exhibit 10(b) to the
December 1993 Form 10-K)
10(d) -Letter of Agreement between The Kansas Power and Light Company I
and John E. Hayes, Jr., dated November 20, 1989. (filed as
Exhibit 10(w) to the December 1989 Form 10-K)
10(e) -Amended Agreement and Plan of Merger by and among The Kansas I
Power and Light Company, KCA Corporation, and Kansas Gas and
Electric Company, dated as of October 28, 1990, as amended by
Amendment No. 1 thereto, dated as of January 18, 1991. (filed
as Annex A to Registration Statement No. 33-38967)
10(f) -Deferred Compensation Plan (filed as Exhibit 10(i) to the I
December 1993 Form 10-K)
10(g) -Long-term Incentive Plan (filed as Exhibit 10(j) to the I
December 1993 Form 10-K)
10(h) -Short-term Incentive Plan (filed as Exhibit 10(k) to the I
December 1993 Form 10-K)
10(i) -Outside Directors' Deferred Compensation Plan (filed as Exhibit I
10(l) to the December 1993 Form 10-K)
10(j) -Executive Salary Continuation Plan of Western Resources, Inc.,
as revised, effective September 22, 1995. (filed electronically)
10(k) -Executive Salary Continuation Plan for John E. Hayes, Jr.,
Dated March 15, 1995. (filed electronically)
10(l) -Stock Purchase Agreement between the Company and Laidlaw
Transportation Inc., dated December 21, 1995.
(filed electronically)
10(l)1-Equity Agreement between the Company and Laidlaw Transportation
Inc., dated December 21, 1995. (filed electronically)

<PAGE 65>
Description

10(m) -Letter Agreement between the Company and David C. Wittig,
dated April 27, 1995. (filed electronically)
12 -Computation of Ratio of Consolidated Earnings to Fixed Charges.
(filed electronically)
21 -Subsidiaries of the Registrant. (filed electronically)
23 -Consent of Independent Public Accountants, Arthur Andersen LLP
(filed electronically)
27 -Financial Data Schedules (filed electronically)
99 -Kansas Gas and Electric Company's Annual Report on Form 10-K
for the year ended December 31, 1995 (filed electronically)

<PAGE 66>
SIGNATURE

Pursuant to the requirements of Sections 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

WESTERN RESOURCES, INC.

March 27, 1996 By JOHN E. HAYES, JR.
John E. Hayes, Jr., Chairman of the Board
and Chief Executive Officer

<TABLE>
Exhibit 12

WESTERN RESOURCES, INC.
Computations of Ratio of Earnings to Fixed Charges and
Computations of Ratio of Earnings to Combined Fixed Charges
and Preferred and Preference Dividend Requirements
(Dollars in Thousands)
<CAPTION>

Year Ended December 31,
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Net Income. . . . . . . . . . . . . . $181,676 $187,447 $177,370 $127,884 $ 89,645
Taxes on Income . . . . . . . . . . . 83,392 99,951 78,755 46,099 42,527
Net Income Plus Taxes. . . . . . 265,068 287,398 256,125 173,983 132,172

Fixed Charges:
Interest on Long-Term Debt. . . . . 95,962 98,483 123,551 117,464 51,267
Interest on Other Indebtedness. . . 27,487 20,139 19,255 20,009 10,490
Interest on Other Mandatorily
Redeemable Securities . . . . . . 372 - - - -
Interest on Corporate-owned
Life Insurance Borrowings . . . . 32,325 26,932 16,252 5,294 -
Interest Applicable to
Rentals . . . . . . . . . . . . . 31,650 29,003 28,827 27,429 5,089
Total Fixed Charges . . . . . . 187,796 174,557 187,885 170,196 66,846

Preferred and Preference Dividend
Requirements:
Preferred and Preference Dividends. 13,419 13,418 13,506 12,751 6,377
Income Tax Required . . . . . . . . 6,160 7,155 5,997 4,596 3,025
Total Preferred and Preference
Dividend Requirements . . . . . . 19,579 20,573 19,503 17,347 9,402
Total Fixed Charges and Preferred and
Preference Dividend Requirements. . 207,375 195,130 207,388 187,543 76,248

Earnings (1). . . . . . . . . . . . . $452,864 $461,955 $444,010 $344,179 $199,018

Ratio of Earnings to Fixed Charges. . 2.41 2.65 2.36 2.02 2.98

Ratio of Earnings to Combined Fixed
Charges and Preferred and Preference
Dividend Requirements . . . . . . . 2.18 2.37 2.14 1.84 2.61

(1) Earnings are deemed to consist of net income to which has been added income taxes (including
net deferred investment tax credit) and fixed charges. Fixed charges consist of all interest
on indebtedness, amortization of debt discount and expense, and the portion of rental expense
which represents an interest factor. Preferred and preference dividend requirements consist
of an amount equal to the pre-tax earnings which would be required to meet dividend
requirements on preferred and preference stock.
</TABLE>

Exhibit 23

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation
of our report included in this Form 10-K, into the Company's previously filed
Registration Statements File No. 33-50075 of Kansas Gas and Electric Company on
Form S-3, No. 33-57435 of Western Resources, Inc. on Form S-8 and Nos. 33-49467,
33-49553, 33-50069, 33-62375, and 33-63505 of Western Resources, Inc. on Form
S-3.

ARTHUR ANDERSEN LLP
Kansas City, Missouri,
March 26, 1996

<ARTICLE> UT
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AT DECEMBER 31, 1995 AND THE STATEMENT OF INCOME AND THE STATEMENT OF CASH
FLOWS FOR THE YEAR ENDED DECEMBER 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 4,356,350
<OTHER-PROPERTY-AND-INVEST> 124,339
<TOTAL-CURRENT-ASSETS> 421,523
<TOTAL-DEFERRED-CHARGES> 588,465
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 5,490,677
<COMMON> 314,280
<CAPITAL-SURPLUS-PAID-IN> 697,962
<RETAINED-EARNINGS> 540,868
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,553,110
150,000
24,858
<LONG-TERM-DEBT-NET> 1,391,263
<SHORT-TERM-NOTES> 177,600
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 25,850
<LONG-TERM-DEBT-CURRENT-PORT> 16,000
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 2,151,996
<TOT-CAPITALIZATION-AND-LIAB> 5,490,677
<GROSS-OPERATING-REVENUE> 1,572,071
<INCOME-TAX-EXPENSE> 83,392
<OTHER-OPERATING-EXPENSES> 1,208,167
<TOTAL-OPERATING-EXPENSES> 1,296,687
<OPERATING-INCOME-LOSS> 275,384
<OTHER-INCOME-NET> 25,907
<INCOME-BEFORE-INTEREST-EXPEN> 301,291
<TOTAL-INTEREST-EXPENSE> 119,615
<NET-INCOME> 181,676
13,419
<EARNINGS-AVAILABLE-FOR-COMM> 168,257
<COMMON-STOCK-DIVIDENDS> 125,763
<TOTAL-INTEREST-ON-BONDS> 95,962
<CASH-FLOW-OPERATIONS> 306,944
<EPS-PRIMARY> 2.71
<EPS-DILUTED> 0

</TABLE>

Exhibit 3(e)
WESTERN RESOURCES, INC.
BY-LAWS

(as amended May 5, 1992)

ARTICLE I

STOCKHOLDERS

Section 1. The annual meeting of the stockholders of the Company
beginning with the year 1980, shall be held on the first Tuesday of May in
each year (or if said day be a legal holiday, then on the next succeeding day
not a holiday), at 11:00 A.M., at the principal office of the Company in the
City of Topeka, Kansas, or such other place in the State of Kansas as the
Board of Directors may designate for the purpose of electing Directors and
transacting such other business as may properly be brought before the meeting.

Section 2. Special meetings of the stockholders may be held upon
call of the Board of Directors or the Chairman of the Board or the President,
at such time and at such place within or without the State of Kansas as may be
stated in the call and notice.

Section 3. Notice stating the place, day and hour of every
meeting of the stockholders, and in the case of a special meeting further
stating the purpose for which such meeting is called, shall be mailed at least
ten days before the meeting to each stockholder of record who shall be
entitled to vote thereat, at the last known post office address of each such
stockholder as it appears upon the books of the Company. Such further notice
shall be given by mail, publication or otherwise, as may be required by law.
Any meeting may be held without notice if all of the stockholders entitled to
vote are present or represented at the meeting, or all of the stockholders
entitled to notice of the meeting sign a waiver thereof in writing.

Section 4. The holders of record of a majority of the shares of
the capital stock of the Company issued and outstanding, entitled to vote
thereat, present in person or represented by proxy, shall constitute a quorum
at all meetings of the stockholders, and the vote of a majority of such quorum
shall be necessary for the transaction of any business, unless otherwise
provided by law, by the Articles of Incorporation or by the By-laws. If at
any meeting there shall be no quorum, the holders of record, entitled to vote,
of a majority of such shares of stock so present or represented may adjourn
the meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall have been obtained, when any business may be
transacted which might have been transacted at the meeting as first convened
had there been a quorum.
Section 5. Meetings of the stockholders shall be presided over by
the Chairman of the Board or, if he is not present, by the President or, in
his absence, by a Vice President. In the event that none of such officers be
present, then the meeting shall be presided over by a chairman to be chosen at
the meeting. The Secretary of the Company or, if he is not present, an
Assistant Secretary of the Company or, if neither the Secretary nor an
Assistant Secretary is present, a secretary to be chosen at the meeting shall
act as secretary of the meeting.

Section 6. At all meetings of the stockholders every holder of
record of the shares of the capital stock of the Company, entitled to vote
thereat, may vote thereat either in person or by proxy.

Section 7. At all elections of directors the voting shall be by
written ballot and stockholders may cumulate their votes.

Section 8. The Board of Directors shall have power to close the
stock transfer books of the Company for a period not exceeding fifty days
preceding the date of

(a) Any meeting of the stockholders;
(b) Any payment of any dividends;
(c) Any allotment of rights;
(d) Any effective date of change or conversion or exchange
of capital stock; or, in lieu of closing the stock transfer books, the Board
of Directors may fix in advance a date not exceeding fifty days preceding the
effective date of any of the above enumerated transactions, and in such case
only such stockholders as shall be stockholders of record on the date so fixed
shall be entitled to receive notice of and to vote at such meeting, or to
receive payment of such dividend, or to receive allotment of rights, or to
exercise rights of change, conversion or exchange of capital stock, as the
case may be, or to participate in any of the above transactions,
notwithstanding any transfer of any stock on the books of the Company after
such record date fixed as aforesaid.

ARTICLE II

DIRECTORS

Section 1. Subject to the provisions of the Articles of
Incorporation, the Directors shall be elected at the regular annual meeting of
stockholders, but if such election of Directors is not held on the day of the
annual meeting, the Directors shall cause the election to be held as soon
thereafter as conveniently may be. Also, subject to the provisions of the
Articles of Incorporation, the Directors shall be divided into three classes,
which shall be as nearly equal in number as possible, and no class shall
include fewer than two Directors. Directors shall hold office for a term of
three years and until their successors are elected and qualified, except that
in 1990, the first class of Directors shall be elected for a term of one year
and the second class of Directors shall be elected for a term of two years.
Each class of Directors shall be designated by the year in which its term
ends. The Board shall fill vacancies in any class in the manner prescribed in
this Article II, provided that any such newly elected Director shall serve for
the remainder of the term applicable to the vacancy being filled.
Notwithstanding the foregoing, whenever the holders of the preferred stock or
preference stock issued by the Company shall have the right, voting separately
by class, to elect Directors at an annual or special meeting of the
stockholders, the election, term of office, and filling of vacancies of such
Directors shall be governed by the terms of the Articles of Incorporation
applicable thereto, and such Directors so elected shall not be divided into
classes pursuant to this paragraph. Directors elected by a vote of the
holders of preferred stock or preference stock as provided in the Articles of
Incorporation shall hold office only so long as is required by the Articles of
Incorporation. Except as otherwise provided in the By-laws and Articles of
Incorporation, no Director shall be removed except for cause. This paragraph
shall not be amended or repealed, and no provision inconsistent herewith shall
be adopted, without the affirmative vote of the holders of at least 80% of the
outstanding shares of stock of the Company entitled to vote in any election.

Each director who is not a salaried full time officer or employee of the
Company shall be conclusively deemed to have resigned from the Board of
Directors of the Company if he retires, resigns, or is removed from the
primary business position which he held at the time of his election to the
Board.

No director who is not a salaried full time officer or employee of the
Company shall be designated by the Board of Directors of the Company as a
nominee for re-election to the Board of Directors at an annual meeting of
stockholders if he shall have attained the age of seventy (70) at year-end
prior to such annual meeting.

No director who is a salaried full time officer or employee of the
Company shall be designated by the Board of Directors of the Company as a
nominee for re-election to the Board of Directors at an annual meeting of
stockholders, if he shall have attained the age of sixty-five (65) at year-end
prior to such annual meeting, or if he is no longer a full time officer or
employee of the Company, or if he has been removed, during the 12 month period
prior to Board action on nominees, from the position he previously held with
the Company, except that any chief executive officer serving on the Board may
be re-nominated for a maximum of five (5) years after his retirement as chief
executive officer, on a year to year basis.

Each Director before entering upon his duties shall file with the
corporation written acceptance of his office. A majority of the members of
the Board shall constitute a quorum for the filling of vacancies of the Board
of Directors and the transaction of business, but if at any meeting of the
Board there shall be less than a quorum present, a majority of the Directors
present may adjourn the meeting from time to time without notice, other than
announcement of the meeting, until a quorum shall have been obtained, when any
business may be transacted which might have been transacted at the meeting as
first convened had there been a quorum. The acts of a majority of the
Directors present at any meeting at which there is a quorum shall, except as
otherwise provided by law, by the Articles of Incorporation or the By-Laws, be
the acts of the Board.

Section 2. Vacancies in the Board of Directors, caused by death,
resignation or otherwise, may be filled at any meeting of the Board of
Directors and the directors so elected shall hold office until the next annual
meeting of the stockholders and until their successors are elected and
qualified.

Section 3. Meetings of the Board of Directors shall be held at such
place within or without the State of Kansas as may from time to time be fixed
by resolution of the Board or as may be specified in the call of any meeting.
Regular meetings of the Board shall be held at such time as may from time to
time be fixed by resolution of the Board, and notice of such meetings need not
be given. Special meetings of the Board may be held at any time upon call of
the Chairman of the Board or the President or a Vice President, by oral,
telegraphic or written notice, duly served on or sent or mailed to each
director not less than two days before any such meeting. Members of the Board
may participate in any meeting of such Board by means of conference telephone
or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in such
meeting shall constitute presence in person at the meeting. A meeting of the
Board may be held without notice immediately after the annual meeting of the
stockholders at the same place at which such meeting is held. Any meeting may
be held without notice if all of the directors are present at the meeting, or
if all of the directors sign a waiver thereof in writing. Any action required
or permitted to be taken at any meeting of the board of directors may be taken
without a meeting if all members of the board consent thereto in writing, and
the writing or writings are filed with the minutes of proceedings of the
board.

Section 4. Meetings of the Board of Directors shall be presided
over by the Chairman of the Board, or, if he is not present, by the President
or, if he is absent, by a Vice President. In the event none of such officers
are present, then the meeting shall be presided over by a chairman to be
chosen at the meeting. The Secretary of the Company or, if he is not present,
an Assistant Secretary of the Company or, if neither the Secretary nor an
Assistant Secretary is present, a secretary to be chosen at the meeting shall
act as secretary of the meeting.

Section 5. Each director of the Company who is not a salaried
officer or salaried employee of the Company shall be entitled to receive such
remuneration for serving as a director and as a member of any committee of the
Board as may be fixed from time to time by the Board of Directors.

ARTICLE III

OFFICERS

Section 1. The Board of Directors, as soon as may be after its
election held in each year, shall choose one of its number President of the
Company and shall appoint one or more Vice Presidents, a Secretary and a
Treasurer of the Company and from time to time may appoint such Assistant
Secretaries, Assistant Treasurers, and other officers and agents of the
Company as it may deem proper. The offices of Secretary and Treasurer may be
held by the same person, and a Vice President of the Company may also be
either the Secretary or the Treasurer.

Section 2. The term of office of all officers shall be one year
or until the respective successors are chosen or appointed, but any officer or
agent may be removed, with or without cause, at any time by the affirmative
vote of a majority of the members of the Board then in office. No agreement
for the employment of any officer or agent for a period longer than one year
shall be authorized.

Section 3. Subject to such limitations as the Board of Directors
may from time to time prescribe, the officers of the Company shall each have
such powers and duties as generally pertain to their respective offices, as
well as such powers and duties as from time to time may be conferred by the
Board of Directors. The Treasurer, the Assistant Treasurers and any other
officers or employees of the Company may be required to give bond for the
faithful discharge of their duties, in such sum and of such character as the
Board may from time to time prescribe.

Section 4. The salaries of all officers and agents of the Company
shall be fixed by the Board of Directors, or pursuant to such authority as the
Board may from time to time prescribe.

ARTICLE IV

CERTIFICATES OF STOCK

Section 1. The interest of each shareholder in the Company shall
be evidenced by a certificate or certificates for shares of stock of the
Company in such form as the Board of Directors may from time to time
prescribe. Certificates for shares of stock of the Company shall be signed by
the Chairman of the Board or the President or any Vice President and the
Treasurer or any Assistant Treasurer of this corporation and sealed with its
corporate seal, or when the same bear the facsimile signature of the Chairman
of the Board or the President or any Vice President and of the Treasurer or
any Assistant Treasurer of the corporation and its facsimile seal and shall be
countersigned and registered in such manner, if any, as the Board may by
resolution, prescribe.

Section 2. The shares of stock of the Company shall be
transferable only on the books of the Company by the holders thereof in person
or by duly authorized attorney, upon surrender for cancellation of
certificates for a like number of shares of the same class of stock, with duly
executed assignment and power of transfer endorsed thereon or attached thereto
and such proof of the authenticity of the signatures as the Company or its
agents may reasonably require.

Section 3. No certificate for shares of stock of the Company
shall be issued in place of any certificate alleged to have been lost, stolen
or destroyed, except upon production of such evidence of the loss, theft, or
destruction, and upon indemnification of the Company and its agents to such
extent and in such manner as the Board of Directors may from time to time
prescribe.

ARTICLE V

CHECKS, NOTES, ETC.

All checks and drafts on the Company's bank accounts and all bills of
exchange and promissory notes, and all acceptances, obligations and other
instruments for the payment of money, shall be signed by such officer or
officers or agent or agents as shall be thereunto authorized from time to time
by the Board of Directors; provided that checks drawn on the Company's
dividend, general and special accounts may bear the facsimile signature,
affixed thereto by a mechanical device, of such officer or agent as the Board
of Directors shall authorize.

ARTICLE VI

FISCAL YEAR

The Fiscal year of the Company shall begin on the first day of
January in each year and shall end on the thirty-first day of December
following.

ARTICLE VII

CORPORATE SEAL

The corporate seal shall have inscribed thereon the name of
the Company and the words "Corporate Seal Kansas".

Exhibit 10(j)

WESTERN RESOURCES, INC.

EXECUTIVE SALARY CONTINUATION PLAN

(Revised September 22, 1995)

WESTERN RESOURCES, INC.
EXECUTIVE SALARY CONTINUATION PLAN

Table of Contents
Page
ARTICLE I
Definitions and Construction
1.1 Definitions . . . . . . . . . . . . . . . . . . 1
1.2 Construction . . . . . . . . . . . . . . . . . 2

ARTICLE II
Eligibility and Participation
2.1 Eligibility . . . . . . . . . . . . . . . . . . 2
2.2 Participation . . . . . . . . . . . . . . . . . 2

ARTICLE III
Death Benefit
3.1 Amount and Payment of Death Benefit . . . . . . 2
3.2 Partial Distribution Prior to Death . . . . . . .3

ARTICLE IV
Retirement Benefit
4.1 Retirement. . . . . . . . . . . . . . . . . . . 3
4.2 Disability. . . . . . . . . . . . . . . . . . . 4
4.3 Vesting of Retirement Benefit . . . . . . . . . 4
4.4 Forfeitability of Retirement Benefit. . . . . . 4

ARTICLE V
Beneficiary. . . . . . . . . . . . . . . . . . . . . . . 4

ARTICLE VI
Leave of Absence. . . . . . . . . . . . . . . . . . . . . 5

ARTICLE VII
Source of Benefits
7.1 Benefits Payable. . . . . . . . . . . . . . . . 5
7.2 Investments to Facilitate Payment of Benefits . 5
7.3 Ownership of Insurance Contracts. . . . . . . . 5
7.4 Trust for Payment of Retirement Benefits. . . . 6

ARTICLE VIII
Termination of Employment . . . . . . . . . . . . . . . . 6

ARTICLE IX
Termination of Participation. . . . . . . . . . . . . . . 7<PAGE>
ARTICLE X
Terminations, Amendment, Modification or Supplement of Plan
10.1 Termination. . . . . . . . . . . . . . . . . . 7
10.2 Rights and Obligations Upon Termination. . . . 7
ARTICLE XI
Other Benefits and Agreements . . . . . . . . . . . . . . 8

ARTICLE XII
Restrictions on Alienation of Benefits. . . . . . . . . . 8

ARTICLE XIII
Administration of this Program
13.1 Appointment of Committee . . . . . . . . . . . 8
13.2 Committee Officials. . . . . . . . . . . . . . 9
13.3 Committee Action . . . . . . . . . . . . . . . 9
13.4 Committee Rules and Powers - General . . . . . 9
13.5 Reliance of Certificates, etc. . . . . . . . . 9
13.6 Liability of Committee . . . . . . . . . . . . 9
13.7 Determination of Benefits. . . . . . . . . . . 10
13.8 Information to Committee . . . . . . . . . . . 10
13.9 Manner and Time of Payment of Benefit. . . . . 10

ARTICLE XIV
Adoption of Plan by Subsidiary, Affiliated or Associated Companies 10

ARTICLE XV
Miscellaneous
15.1 Execution of Receipts and Releases . . . . . . 10
15.2 No Guarantee of Interests. . . . . . . . . . . 10
15.3 Company Records. . . . . . . . . . . . . . . . 11
15.4 Evidence . . . . . . . . . . . . . . . . . . . 11
15.5 Notice . . . . . . . . . . . . . . . . . . . . 11
15.6 Change of Address. . . . . . . . . . . . . . . 11
15.7 Effect of Provisions 11
15.8 Headings 11
15.9 Governing Law 11

APPENDIX I
Executive Salary Continuation Plan Agreement for Western Resources, Inc. I-1-3

APPENDIX II
Executive Salary Continuation Plan Agreement for Astra Resources, Inc.,
a Wholly Owned Subsidiary of Western Resources, Inc II-1-3

APPENDIX III
Change of Beneficiary Form for Executive Salary Continuation Plan III-1

WESTERN RESOURCES, INC.
EXECUTIVE SALARY CONTINUATION PLAN

PURPOSE

The purpose of the Western Resources, Inc. Executive Salary Continuation Plan
is to provide the specified benefits to a select group of management and
highly compensated employees who contribute materially to the continued
growth, development and future business success of Western Resources, Inc.,
and its subsidiaries. It is the intention of Western Resources, Inc. that this
program and the individual plans established hereunder be administered as
unfunded welfare benefit plans established and maintained for a select group
of management or highly compensated employees.

ARTICLE I
DEFINITIONS AND CONSTRUCTION

1.1 Definitions. For purposes of this Program, the following phrases
or terms shall have the indicated meanings unless otherwise clearly apparent
from the context:

A. "Beneficiary" shall mean the person or persons or the estate of a
Participant entitled to receive any benefits under a Plan Agreement entered
into in accordance with the terms of this Program.

B. "Board of Directors" shall mean the Board of Directors of Western
Resources, Inc., unless otherwise indicated or the context otherwise requires.

C. "Committee" shall mean the Human Resources Committee of the Board of
Directors or such other Committee appointed to manage and administer the
Program and individual Plan Agreements in accordance with the provisions of
Article XIII hereof.

D. "Company" shall mean Western Resources, Inc., and its subsidiaries
and predecessor entities.

E. "Compensation" shall mean the base and short term incentive cash
compensation paid to or deferred by a Participant during a calendar year.

F. "Totally and Permanently Disabled" means when, on the basis of
medical evidence, it is determined that a Participant:

a) is totally disabled so as to be prevented from any comparable
employment with the Company, including a disability resulting from an
occupational cause; and

b) will be disabled permanently.

G. "Employee" shall mean any person who is in the regular full-time
employment of the Company or is on authorized leave of absence therefrom, as
determined by the personnel rules and practices of the Company. The term does
not include persons who are retained by the Company solely as consultants or
under contract.

H. "Participant" shall mean an Employee who is selected and elects to
participate in the Program through the execution of a Plan Agreement in
accordance with the provisions of Article II.

I. "Plan Agreement" shall mean the form of written agreement which is
entered into by and between the Company and an Employee selected to become a
Participant as a condition to participation in the Program. The form of
agreement currently used is attached hereto as Appendix I.

J. "Program" shall mean the Western Resources, Inc. Executive Salary
Continuation Plan as embodied herein and as amended from time to time.

K. "Rabbi Trust" shall mean the trust created to hold assets which
will be used to pay the benefits provided hereunder, as provided in Section
7.4.

L. "Retirement" and "Retire" shall mean severance of employment
with the Company, other than as the result of death or Total and Permanent
Disability.

1.2 Construction. The singular when used herein may include the plural
unless the context clearly indicates to the contrary. The words "hereof",
"herein", "hereunder", and other similar compounds of the word "here" shall
mean and refer to the entire Program and not to any particular provision or
section. Whenever the words "Article" or "Section" are used in this Program,
or a cross reference to an "Article" or "Section" is made, the Article or
Section referred to shall be an Article or Section of this Program unless
otherwise specified.

ARTICLE II
ELIGIBILITY AND PARTICIPATION

2.1 Eligibility. In order to be eligible for participation in the
Program, an Employee must be selected by the Committee which, in its sole and
absolute discretion, shall determine eligibility for participation in
accordance with the purposes of the Program.

2.2 Participation. An Employee, having been selected to participate in
this Program by the Committee, shall, as a condition to participate, complete
and return to the Committee a duly executed Plan Agreement electing to
participate in the Program and agreeing to the terms and conditions thereof.

ARTICLE III
DEATH BENEFIT

3.1 Amount and Payment of Death Benefit. In the event a Participant
dies prior to Retirement from the Company, the Company will pay or cause to be
paid a Death Benefit (as herein defined) to such Participant's Beneficiary in
the amount or amounts set forth in such Particiant's Plan Agreement and as
therein specified, commencing on the first day of the month following the date
of such Participant's death, or as otherwise specified in such Participant's
Plan Agreement.

3.2 Partial Distribution Prior to Death. If a Participant shall die
after becoming entitled to a Retirement Benefit, but before the total amount
payable to such Participant as a Retirement Benefit has been paid, the
Retirement Benefit payments then remaining unpaid to such Participant shall be
paid to such Participant's Beneficiary, in accordance with the payment
schedule pursuant to which payments are made under Sections 4.1, 4.2, or 4.3.

ARTICLE IV
RETIREMENT BENEFIT

4.1 Retirement. If a Participant has remained an Employee until age
sixty-five (65) and shall then retire, the Company will pay or cause to be
paid to such Participant as a Retirement Benefit (as herein defined), the
amount per month specified herein and in such Participant's Plan Agreement,
commencing on the first day of the month following such Participant's
retirement, or as otherwise specified in such Participant's Plan Agreement.
If a Participant Retires prior to age sixty-five (65), the Company will pay or
cause to be paid to such Participant as a Retirement Benefit, the amount (if
any) per month specified herein and in such Participant's Plan Agreement,
commencing on the first day of the month following such Participant's
Retirement, or as otherwise specified by such Participant and as permitted by
such Participant's Plan Agreement. Provided however, retirement benefit
payments shall not commence until the later of (i) the Participant attaining
the age of fifty (50), and (ii) the commencement of retirement benefit
payments to the Participant under the Western Resources, Inc. Retirement Plan.

Retirement Benefit
Retirement Age Percentage

50 & under 50.00%
51 51.20%
52 52.40%
53 53.60%
54 54.80%
55 56.00%
56 56.57%
57 57.14%
58 57.71%
59 58.28%
60 58.85%
61 59.42%
62 60.00%
63 60.56%
64 61.13%
65 & over 61.70%

4.2 Disability. If a Participant shall become Totally and Permanently
Disabled prior to Retirement and such total disability continues for more than
six (6) months, such Participant shall be entitled to the same retirement
benefit such Participant would have received had such Participant attained the
age of sixty-five (65) at the time of such total disability.

4.3 Vesting of Retirement Benefit. Notwithstanding any provision
contained herein which may imply or specify to the contrary, a Participant's
Retirement Benefit shall unconditionally vest in such Participant according
to the following vesting schedule:

Years of Service
with the Company
Vested Percentage of
Retirement Benefit

0 to 5
0%

6
10%

7
20%

8
30%

9
40%

10
50%

11
60%

12
70%

13
80%

14
90%

15 or more
100%

If a participant attains age 65, such Participant shall be 100% vested
regardless of the above schedule. Retirement Benefits hereunder offsetting the
limitations of Internal Revenue Code Sections 401(a)(17) and 415(b) shall be
immediately vested for all purposes.

4.4 Forfeitability of Retirement Benefit. Notwithstanding any
provision contained herein which may imply or specify to the contrary, a
Participant's right to receive a Retirement Benefit under this Program and
such Participant's Plan Agreement shall be forfeitable to the extent that such
Retirement Benefit has not vested as described in Section 4.3.

ARTICLE V
BENEFICIARY

A Participant shall designate a beneficiary to receive benefits under
the Program and Plan Agreement by completing the appropriate space in the Plan
Agreement. If more than one Beneficiary is named, the shares and/or precedence
of each Beneficiary shall be indicated. As a condition to any married
Participant designating a Beneficiary other than such Participant's spouse,
the Committee may require the spouse's consent. A Participant shall have the
right to change the Beneficiary by submitting to the Committee a Change of
Beneficiary in the form attached as Appendix III hereof; provided, however,
that no change of Beneficiary shall be effective until acknowledged in writing
by the Committee. If the Company has any doubt as to the proper Beneficiary to
receive payments hereunder, the Company shall have the right to withhold such
payments until the matter is finally adjudicated. Any payment made or caused
to be made by the Company in good faith and in accordance with the provisions
of this Program and a Participant's Plan Agreement shall fully discharge the
Company from all further obligations with respect to such payment.

ARTICLE VI
LEAVE OF ABSENCE

If a Participant is authorized by the Company for any reason, including
military, medical, or other, to take a leave of absence from employment, such
Participant's Plan Agreement shall remain in effect.

ARTICLE VII
SOURCE OF BENEFITS

7.1 Benefits Payable. Amounts payable hereunder shall be paid
exclusively from the general assets of the Company or the Rabbi Trust to be
established pursuant to Section 7.4, and no person entitled to payment
hereunder shall have any claim, right, security interest, or other interest in
any fund, trust, account, insurance contract, or asset of the Company which
may be looked to for such payment. The Company's liability for the payment of
benefits hereunder shall be evidenced only by this Program and each Plan
Agreement entered into between the Company and a Participant.

7.2 Investments to Facilitate Payment of Benefits. Although the
Company is not obligated to invest in any specific asset or fund, or purchase
any insurance contract, in order to provide the means for the payment of any
liabilities under this Program, the Company may elect to do so, and, in such
event, no Participant shall have any interest whatever in such asset, fund, or
insurance contract. In the event the Company elects to purchase or causes to
be purchased insurance contracts on the life of a Participant as a means for
making, offsetting, or contributing to any payment, in full or in part, which
may become due and payable by the Company under this Program or a
Participant's Plan Agreement, such Participant agrees to cooperate in the
securing of life insurance on such Participant's life by furnishing such
information as the Company and the insurance carrier may require, including
the results and reports of previous Company and other insurance carrier
physical examinations as may be requested, and taking any other action which
may be requested by the Company and the insurance carrier to obtain such
insurance coverage. If a Participant does not cooperate in the securing of
such life insurance, the Company shall have no further obligation to such
Participant under this Program, and such Participant's Plan Agreement shall
terminate.

7.3 Ownership of Insurance Contracts. The Company shall be the sole
owner of any insurance contracts acquired on the life of a Participant with
all incidents of ownership therein, including, but not limited to, the right
to cash and loan values, dividends, if any, death benefits, and the right to
termination thereof, and a Participant shall have no interest whatsoever in
such contracts, if any, and shall exercise none of the incidents of ownership
thereof. Provided however, the Company may assign any such insurance
contracts to the trustee of the Rabbi Trust.

7.4 Trust for Payment of Retirement Benefits. The Company shall create
a Rabbi Trust for the purpose of facilitating any retirement benefits payable
hereunder. Such trust will be funded upon the occurrence of any of the
following events:

a) At the Retirement of, and commencement of payment to, a Plan
Participant;

b) Upon a decision by the Board of Directors ;

c) If the shareholders of the Company approve the merger or
consolidation of the Company with or into any other
corporation (other than a corporation wholly-owned by the
Company immediately prior to such event) or the acquisition
of substantially all of the business or assets of the
Company by any other person or entity (other than a
corporation wholly-owned by the Company immediately prior to
such event);

d) If a change occurs in the Board of Directors of the Company
whereby Directors comprising a majority of the Board of
Directors immediately prior to such change do not continue
to comprise such a majority immediately after such change,
provided that incremental and/or related changes (including
but not limited to resignations from the Board of Directors)
which occur within an 18 month period of time shall be
considered to be but a single change for purposes of this
subparagraph; or

e) If, as a result of any tender offer or otherwise, any person
or entity or affiliated group becomes the beneficial or
record owner (directly or indirectly) of more than 10% of
the outstanding voting securities of the Company.

Such funding will be in the form of Single Premium Annuities, or an
amount sufficient for the trustee to purchase Single Premium Annuities, from
qualified and financially sound insurance companies to provide the applicable
vested retirement benefits payable under this Program and Plan Agreements.
Such funding and the purchase of insurance, if any, will not relieve the
Company of its obligations to pay or cause to be paid the benefits hereunder.

In lieu of such funding of the trust with respect to a Participant, the
Participant may elect prior to such funding by the Company to receive the
present value thereof in a lump sum payment, less 6% of the amount thereof as
a substantial penalty, which penalty will be forfeited by the Participant.
Upon such lump sum payment the Company shall have no further obligation to the
Participant.
<PAGE>
ARTICLE VIII
TERMINATION OF EMPLOYMENT

Neither this Program nor a Participant's Plan Agreement, either singly
or collectively, in any way obligate the Company, or any subsidiary of the
Company, to continue the employment of a Participant with the Company, or any
subsidiary of the Company, nor does either limit the right of the Company or
any subsidiary of the Company at any time and for any reason to terminate the
Participant's employment. Termination of a Participant's employment with the
Company, or any subsidiary of the Company, for any reason, whether by action
of the Company, subsidiary, or Participant, shall immediately terminate the
Participant's participation in this Program and such Participant's Plan
Agreement, and all further obligations of either party thereunder, except as
may be provided in Article X and the Participant's Plan Agreement. In no
event shall this Program or a Plan Agreement, either singly or collectively,
by their terms or implications constitute an employment contract of any nature
whatsoever between the Company, or any subsidiary, and a Participant.

ARTICLE IX
TERMINATION OF PARTICIPATION

A Participant reserves the right to terminate participation in this
Program and such Participant's Plan Agreement at any time by giving the
Company written notice of such termination not less than 30 days (i) prior to
the anniversary date of any contract or contracts of insurance on the life of
such Participant which may be in force and utilized by the Company in
connection with this Program, or (ii) prior to the date a Participant selects
for termination if no insurance contract is in effect.

ARTICLE X
TERMINATIONS, AMENDMENT, MODIFICATION,
OR SUPPLEMENT OF PLAN

10.1 Termination. The Company reserves the right to terminate, amend,
modify, or supplement this Program, wholly or partially, from time to time,
and at any time. The Company likewise reserves the right to amend, modify, or
supplement any Plan Agreement, wholly or partially, from time to time. Such
right to terminate, amend, modify, or supplement this Program or any Plan
Agreement shall be exercised for the Company by the Committee; provided,
however, that the Committee shall take no action to terminate this Program or
a Plan Agreement or to reduce benefits, with respect to any person who is a
Participant (or a Beneficiary) at the time of the termination or reduction.
This prohibition against the reduction of Participants' benefits shall apply
as well to benefits Participants may earn (under this Program and their Plan
Agreement) by their future service and future increases in compensation. Any
termination of this Program shall be limited to Employees who at the time of
such termination are not Participants. Provided however, in the event of a
change of control of the Company, the surviving corporation, if other than the
Company, may terminate this Program and the Plan Agreements upon substitution
by such corporation of a plan or program providing benefits no less favorable
to the Participants.

10.2 Rights and Obligations Upon Termination. Upon the termination of
this Program by the Committee, or the termination of any Plan Agreement by a
Participant, in accordance with the provisions for such termination, neither
this Program nor the Plan Agreement shall be of any further force or effect,
and no party shall have any further obligation under either this Program or
any Plan Agreement so terminated, except as provided in Sections 4.3, 10.1 or
as elsewhere provided in this Program.

ARTICLE XI
OTHER BENEFITS AND AGREEMENTS

The benefits provided for a Participant and such Participant's
Beneficiary hereunder and under such Participant's Plan Agreement are in
addition to any other benefits available to such Participant under any other
program, plan or agreement of the Company for its Employees and the
Participants, and, except as may be otherwise expressly provided for, this
Program and Plan Agreements entered into hereunder shall supplement and shall
not supersede, modify, or amend any other program, plan or agreement of the
Company or a Participant. Moreover, benefits under this Program and Plan
Agreements entered into hereunder shall not be considered compensation for the
purpose of computing contributions or benefits under any plan maintained by
the Company, or any of its subsidiaries, which is qualified under Section
401(a) of the Internal Revenue Code of 1986, as amended.

ARTICLE XII
RESTRICTIONS ON ALIENATION OF BENEFITS

No right or benefit under this Program or a Plan Agreement shall be
subject to anticipation, alienation, sale, assignment, pledge, encumbrance, or
charge, and any attempt to anticipate, alienate, sell, assign, pledge,
encumber, or charge the same shall be void. No right or benefit hereunder or
under any Plan Agreement shall in any manner be liable for or subject to the
debts, contracts, liabilities, or torts of the person entitled to such
benefit. If any Participant or Beneficiary under this Program or a Plan
Agreement should become bankrupt or attempt to anticipate, alienate, sell,
assign, pledge, encumber, or charge any right to a benefit hereunder or under
any Plan Agreement, then such right or benefit shall, in the discretion of the
Committee, cease, and in such event, the Committee may hold or apply the same
or any part thereof for the benefit of such Participant or Beneficiary, his or
her spouse, children, or other dependents, or any of them, in such portion as
the Committee, in its sole and absolute discretion, may deem proper.

ARTICLE XIII
ADMINISTRATION OF THIS PROGRAM

13.1 Appointment of Committee. The general administration of this
Program, and any Plan Agreements executed hereunder, as well as construction
and interpretation thereof, shall be vested in the Committee, the number and
members of which shall be designated and appointed from time to time by, and
shall serve at the pleasure of, the Board of Directors. Any such member of
the Committee may resign by notice in writing filed with the secretary of the
Committee. Vacancies shall be filled promptly by the Board of Directors.

13.2 Committee Officials. The Board of Directors may designate one of
the members of the Committee as Chairman and may appoint a secretary who need
not be a member of the Committee. The secretary shall keep minutes of the
Committee's proceedings and all data, records, and documents relating to the
Committee's administration of this Program and any Plan Agreements executed
hereunder. The Committee may appoint from its number such subcommittees with
such powers as the Committee shall determine and may authorize one or more of
its members or any agent to execute or deliver any instrument or make any
payment on behalf of the Committee.

13.3 Committee Action. All resolutions or other actions taken by the
Committee shall be by the vote of a majority of those present at a meeting at
which a majority of the members are present, or in writing by all the members
at the time in office if they act without a meeting.

13.4 Committee Rules and Powers - General. Subject to the provisions
of this Program, the Committee may from time to time establish rules, forms,
and procedures for the administration of this Program, including Plan
Agreements. Except as herein otherwise expressly provided, the Committee
shall have the exclusive right to interpret this Program and any Plan
Agreements, and to decide any and all matters arising thereunder or in
connection with the administration of this Program and any Plan Agreements,
and it shall endeavor to act, whether by general rules or by particular
decisions, so as not to discriminate in favor of or against any person. The
Committee shall have the exclusive right to determine Total and Permanent
Disability with respect to a Participant (consistent with this Plan's
definition of the term ), such determinations to be made on the basis of such
medical and/or other evidence that the Committee, in its sole and absolute
discretion, may require. Such decisions, actions, and records of the Committee
shall be conclusive and binding upon the Company, the Participants, and all
persons having or claiming to have rights or interests in or under this
Program.

13.5 Reliance on Certificates, etc. The members of the Committee and
the Officers and Directors of the Company shall be entitled to rely on all
certificates and reports made by any duly appointed accountants, and on all
opinions given by any duly appointed legal counsel. Such legal counsel may be
counsel for the Company.

13.6 Liability of Committee. No member of the Committee shall be
liable for any act or omission of any other member of the Committee, or for
any act or omission on his part, excepting only his own willful misconduct.
The Company shall indemnify and save harmless each member of the Committee
against any and all expenses and liabilities arising out of membership on the
Committee, excepting only expenses and liabilities arising out of a Committee
member's own willful misconduct. Expenses against which a member of the
Committee shall be indemnified hereunder shall include, without limitation,
the amount of any settlement or judgment, costs, counsel fees, and related
charges reasonably incurred in connection with a claim asserted, or a
proceeding brought, or settlement thereof. The foregoing right of
indemnification shall be in addition to any other rights to which any such
member may be entitled .

13.7 Determination of Benefits. In addition to the powers hereinabove
specified, the Committee shall have the power to compute and certify, under
this Program and any Plan Agreement, the amount and kind of benefits from time
to time payable to Participants and their Beneficiaries, and to authorize all
disbursements for such purposes.

13.8 Information to Committee. To enable the Committee to perform its
functions, the Company shall supply full and timely information to the
Committee on all matters relating to the compensation of all Participants,
their retirement, death, or other cause for termination of employment, and
such other pertinent facts as the Committee may require.

13.9 Manner and Time of Payment of Benefits. The Committee shall have
the power, in its sole and absolute discretion, to change the manner and time
of payment of benefits to be made to a Participant or his Beneficiary from
that set forth in the Participant's Plan Agreement if requested to do so by
such Participant or Beneficiary.

ARTICLE XIV
ADOPTION OF PLAN BY SUBSIDIARY,
AFFILIATED OR ASSOCIATED COMPANIES

Any corporation which is a subsidiary of the Company may, with the
approval of the Committee, adopt this Plan and thereby come within the
definition of Company in Article I hereof.

ARTICLE XV
MISCELLANEOUS

15.1 Execution of Receipts and Releases. Any payment to a Participant,
a Participant's legal representative, or Beneficiary in accordance with the
provisions of this Program or any Plan Agreement executed hereunder shall, to
the extent thereof, be in full satisfaction of all claims hereunder against
the Company. The Company may require such Participant, legal representative,
or Beneficiary, as a condition precedent to such payment, to execute a receipt
and release therefor in such form as it may determine.

15.2 No Guarantee of Interests. Neither the Committee nor any of its
members guarantees the payment of any amounts which may be or becomes due to
any person or entity under this Program or any Plan Agreement executed
hereunder. The liability of the Company to make any payment under this Program
or any Plan Agreement executed hereunder is limited to the then available
assets of the Company and the trust established under Section 7.4 hereof.

15.3 Company Records. Records of the Company as to a Participant's
employment, termination of employment and the reason therefor, reemployment,
authorized leaves of absence, and compensation shall be conclusive on all
persons and entities, unless determined to be incorrect.

15.4 Evidence. Evidence required of anyone under this Program and any
Plan Agreement executed hereunder may be by certificate, affidavit, document,
or other information which the person or entity acting on it considers
pertinent and reliable, and signed, made, or presented by the proper party or
parties.

15.5 Notice. Any notice which shall be or may be given under this
Program or a Plan Agreement executed hereunder shall be in writing and shall
be mailed by United States mail, postage prepaid. If notice is to be given to
the Company, such notice shall be addressed to the Company at:

818 S. Kansas Avenue
Topeka, Kansas 66612

and marked to the attention of the Secretary, Executive Salary Continuation
Plan Administrative Committee; or, if notice to a Participant, addressed to
the address shown on such Participant's most recent employment file with the
Company.

15.6 Change of Address. Any party may, from time to time, change the
address to which notices shall be mailed by giving written notice of such new
address.

15.7 Effect of Provisions. The provisions of this Program and of any
Plan Agreement executed hereunder shall be binding upon the Company and its
successors and assigns, and upon a Participant, his Beneficiary, assigns,
heirs, executors, and administrators.

15.8 Headings. The titles and headings of Articles and Sections are
included for convenience of reference only and are not to be considered in the
construction of the provisions hereof or any Plan Agreement executed
hereunder.

15.9 Governing Law. All questions arising with respect to this Program
and any Plan Agreement executed hereunder shall be determined by reference to
the laws of the State of Kansas in effect at the time of their adopting and
execution, respectively.

15.10 Effective Date. The changes made by this revised and
restated Program shall be effective for Participants with respect to whom no
Retirement, Disability, or Death Benefit payments have commenced as of
September 22, 1995 and their Beneficiaries.

WESTERN RESOURCES, INC.

By____________________________
Attested by: (Executive Vice President)

______________________________
(Secretary)

APPENDIX I
EXECUTIVE SALARY CONTINUATION PLAN AGREEMENT FOR
WESTERN RESOURCES, INC.

<PAGE>
EXECUTIVE SALARY CONTINUATION PLAN AGREEMENT
FOR WESTERN RESOURCES, INC.

I acknowledge that, as an Employee of Western Resources, Inc., I have been
offered an opportunity to participate in the Western Resources, Inc. Executive
Salary Continuation Program (Program) described in the attached document
(which is incorporated herein by reference), and that I have elected one of
the alternatives set forth as indicated by the space which I have checked:

________ To participate in the Program

________ Not to participate in the Program

My Retirement Benefit, disability benefits, death benefits, and commencement
of such payments, and designated Beneficiary(ies) are agreed to be as follows:

1.A Retirement Benefit (Article IV of Program). Subject to the vesting
schedule in Section 4.3 of the Program, an amount which, when combined with
existing pension benefits under the Western Resources, Inc. Retirement Plan,
will provide the percentage of the final 36 months average Compensation, for
life (15 years minimum) as illustrated below:

Retirement Benefit
Retirement Age Percentage

50 & under 50.00%
51 51.20%
52 52.40%
53 53.60%
54 54.80%
55 56.00%
56 56.57%
57 57.14%
58 57.71%
59 58.28%
60 58.85%
61 59.42%
62 60.00%
63 60.56%
64 61.13%
65 & over 61.70%

1.B Commencement of Retirement Benefit Payments. The amount of the
Retirement Benefit Payments will be based on the following table depending
upon the Participant's age when Benefit Payments are to commence:

Age At Payout Percentage Factor
Commencement of Of Retirement Benefit
Benefit Payments Percentage

50 50%
51 55%
52 60%
53 65%
54 70%
55 75%
56 80%
57 85%
58 90%
59 95%
60 & older 100%

2. IRC Sections 401(a)(17) and 415(b) Limitations. Notwithstanding
Paragraphs 1A and 1B above, the Program and this Plan Agreement shall provide
a Retirement Benefit attributable to the Participant's annual base
compensation that is in excess of IRC Sections 401(a)(17) and 415(b)
limitations. This benefit will be computed by applying the same benefit
formula, vesting provisions, and early retirement provisions as are in the
Western Resources, Inc. Pension Plan. Any benefit provided under this
provision will offset the benefit provided under Paragraphs 1A and 1B above.

3. Disability Benefit (Article IV of Program). If Total and Permanent
Disability should occur prior to Retirement, an amount which, when combined
with then existing pension benefits under the Western Resources, Inc.
Retirement Plan, will provide 61.7% of the final 36 months average
Compensation for life (15 years minimum).

4. Death Benefit. (Article III of Program). If death occurs before
Retirement, an amount which, when combined with then existing pension benefits
under the Western Resources, Inc. Retirement Plan, will provide 50% (or the
vested Retirement Benefit, whichever is greater) of the previous 36 months
average Compensation, payable to the Beneficiary for 180 months following
death.

5. Participant hereby designates as Primary Beneficiary under the Program
and this Plan Agreement:

and, Participant hereby designates as Secondary Beneficiary under the Program
and this Plan Agreement:

The term "Beneficiary" as used herein shall mean the Primary Beneficiary if
such Primary Beneficiary shall survive Participant by at least 30 days, and
shall mean the Secondary Beneficiary if Primary Beneficiary does not survive
Participant by at least 30 days, and shall mean the Estate of the Participant,
if neither Primary nor Secondary Beneficiary survives Participant by at least
30 days. Participant shall have the right to change Participant's designation
of Primary and/or Secondary Beneficiary from time to time, in such manner as
shall be required by the Company, it being agreed that no change in
beneficiary shall be effective until acknowledged in writing by the Committee.
(If Beneficiary is to be irrevocable, strike and initial previous sentence.)

I further acknowledge that neither the Company nor any of its subsidiaries,
affiliated companies, officers, employees, or agents has any responsibility
whatsoever for the changes which I may make in other personal plans or
programs as a result of my decision regarding the Program and they are fully
released to such extent. The Company agrees that although the Program may be
terminated or modified at any time, in the sole discretion of the Company, a
Participant shall have those rights provided for in Article X of said Program
to the extent such may be applicable to such Participant's at the time of such
termination.

IN WITNESS WHEREOF, Western Resources, Inc. and Plan Participant have
executed this Plan Agreement as of _____________, 1995.

WESTERN RESOURCES, INC.

_____________________________

PARTICIPANT:

(Signature)

(Type or Print Name)

<PAGE>

APPENDIX II
EXECUTIVE SALARY CONTINUATION PLAN
AGREEMENT FOR ASTRA RESOURCES, INC.

EXECUTIVE SALARY CONTINUATION PLAN AGREEMENT
FOR ASTRA RESOURCES, INC., A WHOLLY OWNED SUBSIDIARY OF
WESTERN RESOURCES, INC.

I acknowledge that, as an Employee of Astra Resources, Inc., a wholly owned
subsidiary of Western Resources, Inc., I have been offered an opportunity to
participate in the Western Resources, Inc. Executive Salary Continuation
Program (Program) described in the attached document, and that I have elected
one of the alternatives set forth as indicated by the space which I have
checked:

To participate in the Program

Not to participate in the Program

My Retirement Benefit, disability benefits, death benefits, and commencement
of such payments, and designated Beneficiary(ies) are agreed to be as follows:

Retirement Benefit
Retirement Age Percentage

50 & under 50.00%
51 51.20%
52 52.40%
53 53.60%
54 54.80%
55 56.00%
56 56.57%
57 57.14%
58 57.71%
59 58.28%
60 58.85%
61 59.42%
62 60.00%
63 60.56%
64 61.13%
65 & over 61.70%

Age At Payout Percentage Factor
Commencement of Of Retirement Benefit
Benefit Payments Percentage

50 50%
51 55%
52 60%
53 65%
54 70%
55 75%
56 80%
57 85%
58 90%
59 95%
60 & older 100%

5. Participant hereby designates as Primary Beneficiary under the Program
and this Plan Agreement:

and, Participant hereby designates as Secondary Beneficiary under the Program
and this Plan Agreement:

IN WITNESS WHEREOF, Western Resources, Inc. and Plan Participant have
executed this Plan Agreement as of __________________, 1995.

WESTERN RESOURCES, INC.

__________________________________

PARTICIPANT:

_________________________________
(Signature)

_________________________________
(Type or Print Name)
<PAGE>
APPENDIX III
CHANGE OF BENEFICIARY FORM FOR
EXECUTIVE SALARY CONTINUATION PLAN

WESTERN RESOURCES, INC.
CHANGE OF BENEFICIARY FORM FOR
EXECUTIVE SALARY CONTINUATION PLAN

I,___________________________________, as a Participant in the above Plan,
hereby request to change the Beneficiary Designation dated ________________ as
follows:

Primary Beneficiary:

Secondary Beneficiary:

The term "Beneficiary" as used herein shall mean the Primary Beneficiary if
such Primary Beneficiary shall survive Participant by at least 30 days, and
shall mean the Secondary Beneficiary if Primary Beneficiary does not survive
Participant by at least 30 days, and shall mean Estate of the Participant, if
neither Primary nor Secondary Beneficiary survives Participant by at least 30
days. Participant shall have the right to change Participant's designation of
Primary and/or Secondary Beneficiary from time to time in such manner as shall
be required by the Company, it being agreed that no change in beneficiary
shall be effective until acknowledged in writing by the Committee. (If
Beneficiary is to be irrevocable, strike and initial previous sentence.)

DATE: PARTICIPANT:

_________________________ ____________________________________
(Signature)

____________________________________
Type or Print Name)

PARTICIPANT'S SPOUSE:

____________________________________
(Signature)

____________________________________
(Type or Print Name)

Exhibit 10(k)

EXECUTIVE SALARY CONTINUATION PLAN AGREEMENT
FOR WESTERN RESOURCES, INC.

________ To participate in the Program

________ Not to participate in the Program

My Retirement Benefit, disability benefits, death benefits, and commencement
of such payments, and designated Beneficiary(ies) are agreed to be as follows:

1.A Retirement Benefit (Article IV of Program). Subject to the vesting
schedule in Section 4.3 of the Program, provided the reference to age 65 in
the next to last sentence thereof shall be age 61, and notwithstanding the
schedule contained therein, an amount which, when combined with existing
pension benefits under the Western Resources, Inc. Retirement Plan, will
provide the percentage of the final 36 months average Compensation, for
life (15 years minimum) as illustrated below:

Retirement Benefit
Retirement Age Percentage

50 & under 50.00%
51 51.20%
52 52.40%
53 53.60%
54 54.80%
55 56.00%
56 56.57%
57 57.14%
58 57.71%
59 58.28%
60 58.85%
61 60.00%
62 60.00%
63 60.56%
64 61.13%
65 & over 61.70%

<PAGE>
1.B Commencement of Retirement Benefit Payments. The amount of the
Retirement Benefit Payments will be based on the following table depending
upon the Participant's age when Benefit Payments are to commence:

Age At
Payout Percentage Factor
Commencement of
Of Retirement Benefit
Benefit Payments Percentage

50 50%
51 55%
52 60%
53 65%
54 70%
55 75%
56 80%
57 85%
58 90%
59 95%
60 & older 100%

2. IRC Section 401(a)(17) Limitations. Notwithstanding Paragraphs 1A and
1B above, the Program and this Plan Agreement shall provide a Retirement
Benefit attributable to the Participant's annual base compensation that is in
excess of IRC Section 401(a)(17) limitations. This benefit will be computed by
applying the same benefit formula, vesting provisions, and early retirement
provisions as are in the Western Resources, Inc. Pension Plan. Any benefit
provided under this provision will offset the benefit provided under
Paragraphs 1A and 1B above.

5. Participant hereby designates as Primary Beneficiary under the Program
and this Plan Agreement:

<PAGE>
and, Participant hereby designates as Secondary Beneficiary under the Program
and this Plan Agreement:

IN WITNESS WHEREOF, Western Resources, Inc. and Plan Participant have
executed this Plan Agreement as of March 15, 1995.

WESTERN RESOURCES, INC.

Executive Vice President

PARTICIPANT:

(Signature)

John E. Hayes, Jr.

Exhibit 10(l)

STOCK PURCHASE AGREEMENT

STOCK PURCHASE AGREEMENT, dated December 21, 1995, by and
among Laidlaw Transportation, Inc., a Delaware corporation (the
"Seller") and an indirect wholly-owned subsidiary of Laidlaw Inc.,
a corporation continued under the laws of Canada ("Guarantor"),
Guarantor, and Western Resources, Inc., a Kansas corporation (the
"Purchaser"). Certain capitalized terms used herein are defined in
Section 9.7 hereof.

W I T N E S S E T H :

WHEREAS, the Seller owns, in the aggregate, 30,800,000
common shares, par value of $.10 per share (the "Common Shares"),
of ADT Limited, a corporation organized under the laws of Bermuda
(the "Company"); and

WHEREAS, the Seller desires to sell to the Purchaser, and
the Purchaser desires to purchase from the Seller, 15,400,000
Common Shares (the "Shares") upon the terms and subject to the
conditions set forth herein;

NOW, THEREFORE, in consideration of the premises and the
mutual covenants hereinafter set forth, the parties hereto,
intending to be legally bound, hereby agree as follows:

I. SALE OF SHARES; PURCHASE PRICE

1.1 Sale of Shares. Upon the terms and subject to the
conditions set forth in this Agreement, at the Closing (as defined
in Section 6.1), the Seller shall sell and deliver to the Purchaser
the Shares, and the Purchaser shall purchase from the Seller the
Shares.

1.2 Purchase Price; Payment.

(a) The purchase price for the Shares shall be
$215,600,000 in cash (the "Purchase Price").

(b) On the Closing Date (as defined in Section
6.1), the Purchaser shall pay to the Seller the Purchase Price by
wire transfer of immediately available funds to such bank account
as the Seller shall specify in writing to Purchaser not later than
three Business Days prior to the Closing Date, against evidence
that the Purchaser has been entered in the register of members of
the Company and issuance to the Purchaser by the transfer agent of
the Company of a certificate or certificates representing the
Shares and bearing a customary legend reflecting that the Shares
have not been registered under the Securities Act, such certificate
and legend in form and substance satisfactory to the Purchaser and
in such name or names designated by the Purchaser.

II. REPRESENTATIONS AND WARRANTIES OF THE SELLER AND THE GUARANTOR

The Seller and the Guarantor hereby represent and warrant
to the Purchaser as follows:

2.1 Organization and Good Standing. Each of the Seller
and the Guarantor are duly organized, validly existing and in good
standing under the laws of their respective jurisdictions of
incorporation.

2.2 Authority Relative to Agreement. Each of the Seller
and the Guarantor have all requisite power and authority to
execute, deliver and perform their respective obligations under
this Agreement and the Equity Agreement. The execution and
delivery by the Seller and the Guarantor of this Agreement and the
Equity Agreement, and the consummation by the Seller and the
Guarantor of the transactions contemplated hereby and thereby
(i) have been authorized by all necessary action on the part of the
Seller and the Guarantor, (ii) do not violate any provision of law
or regulation applicable to the Seller or the Guarantor and
(iii) do not conflict with or result in a breach of any provision
of, or constitute a default under, the certificate of incorporation
or bylaws of the Seller or the Guarantor, or any agreement, order,
judgment or decree binding upon the Seller or the Guarantor.

2.3 Consents and Approvals. No filing or registration
with, notification to, or authorization, consent or approval of,
any governmental authority is required by Seller or Guarantor in
connection with the execution and delivery of this Agreement and
the Equity Agreement, or the consummation of the transactions
contemplated hereby and thereby.

2.4 Effect of Agreement. This Agreement and the Equity
Agreement have been duly executed and delivered by the Seller and
the Guarantor and (assuming the due authorization, execution and
delivery by the Purchaser) constitute legal, valid and binding
obligations of the Seller and the Guarantor enforceable against the
Seller and the Guarantor in accordance with their respective terms.

2.5 The Shares.

(a) The Seller owns all right, title and interest
in and to the Shares, free and clear of any liens, claims, security
interests or encumbrances whatsoever (including, without
limitation, any voting trust or similar arrangement affecting the
right to vote the Shares).

(b) The Seller will transfer and deliver to the
Purchaser at the Closing valid title to the Shares, free and clear
of any liens, claims, security interests or encumbrances whatsoever
(including, without limitation, any voting trust or similar
arrangement affecting the right to vote the Shares).

2.6 Brokers, Finders, etc. Neither the Seller nor the
Guarantor is subject to the valid claim of any broker, finder,
consultant or other intermediary in connection with the
transactions contemplated hereby who would have a claim for a fee
or commission from the Purchaser in connection with such
transactions.

2.7 Absence of Certain Changes. Except as disclosed in
any report or statement filed as of the date hereof with respect to
the Company pursuant to the Exchange Act, neither the Seller nor
the Guarantor has any knowledge that the Company has suffered any
event or occurrence which would have any actual or potential
material adverse effect on the business, properties, operations,
assets, condition (financial or otherwise), results of operations
or prospects of the Company (a "Company Material Adverse Effect").

2.8 Public Utility Holding Company Act. None of the
Seller, the Guarantor or, to the best of the Seller's knowledge,
the Company is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company," within the meaning
of the Public Utility Holding Company Act of 1935, as amended.

III. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

The Purchaser hereby represents and warrants to the
Seller as follows:

3.1 Organization and Good Standing. The Purchaser is
duly organized, validly existing and in good standing under the
laws of the State of Kansas.

3.2 Authority Relative to Agreement. The Purchaser has
all requisite power and authority to execute, deliver and perform
its obligations under this Agreement and the Equity Agreement. The
execution and delivery by the Purchaser of this Agreement and the
Equity Agreement, and the consummation by the Purchaser of the
transactions contemplated hereby and thereby (including, subject to
the consent of the KCC, the issuance of the Note) (i) have been
authorized by all necessary action on the part of the Purchaser,
(ii) do not violate any provision of law or regulation applicable
to the Purchaser and (iii) do not conflict with or result in a
breach of any provision of, or constitute a default under, the
certificate of incorporation or bylaws of the Purchaser, or any
agreement, order, judgment or decree binding upon the Purchaser.

3.3 Consents and Approvals. No filing or registration
with, notification to, or authorization, consent or approval of,
any governmental entity is required by Purchaser in connection with
the execution and delivery of this Agreement and the Equity
Agreement, or the consummation of the transactions contemplated
hereby or thereby, except (i) in connection with the applicable
requirements of the HSR Act, (ii) in connection with filings under
the Exchange Act and (iii) in connection with obtaining the
approval of the KCC with respect to the issuance of the Note.

3.4 Effect of Agreement. This Agreement and the Equity
Agreement have been duly executed and delivered by the Purchaser
and (assuming the due authorization, execution and delivery by the
Seller and the Guarantor) constitute legal, valid and binding
obligations of the Purchaser enforceable against the Purchaser in
accordance with their respective terms.

3.5 Brokers, Finders, etc. The Purchaser is not subject
to the valid claim of any broker, finder, consultant or other
intermediary in connection with the transactions contemplated
hereby who would have a claim for a fee or commission from the
Seller or the Guarantor in connection with such transactions.

3.6 Securities Act. The Purchaser is acquiring the
Shares with no intention of distributing or reselling the Shares or
any part of the Shares in any transaction which would be in
violation of the Securities Act.

IV. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASER

The obligations of the Purchaser to effect the purchase
of the Shares from the Seller pursuant to this Agreement shall be
subject to the satisfaction, or waiver by the Purchaser on the
Closing Date, of the following conditions:

4.1 Accuracy of Representations and Warranties;
Covenants. Each of the representations and warranties of the
Seller and the Guarantor contained herein shall be true and correct
in all material respects when made and on and as of the Closing
Date, with the same force and effect as though the same had been
made on and as of the Closing Date, and the Seller and the
Guarantor shall have performed and complied in all material
respects with the covenants and provisions contained herein
required to be performed or complied with at or prior to the
Closing.

4.2 No Proceeding or Litigation. No party hereto shall
be legally enjoined by a writ, order, decree or injunction from a
court of competent jurisdiction or governmental entity from
consummating the transactions contemplated by this Agreement or the
Equity Agreement or restricting the Purchaser's exercise of full
rights to own the Shares, and no proceeding shall have been
commenced or threatened seeking to enjoin the consummation of the
transactions contemplated hereby or by the Equity Agreement or
restrict the Purchaser's full rights to own the Shares.

4.3 Certificate. The Purchaser shall have received a
certificate from each of the Seller and the Guarantor to the effect
set forth in Section 4.1 hereof, dated the Closing Date, duly
signed by a duly authorized officer of the Seller or the Guarantor.

4.4 Consents and Approvals. All necessary consents and
approvals of any United States or any other governmental authority
or any other third party required for the consummation of the
transactions contemplated by this Agreement and the Equity
Agreement (other than the KCC with respect to the issuance of the
Note under the Equity Agreement) shall have been obtained and all
applicable waiting periods in respect of the transactions
contemplated by this Agreement under the HSR Act shall have expired
or been terminated.

4.5 Equity Agreement. The Equity Agreement shall be in
full force and effect.

V. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLER

The obligations of the Seller to effect the sale of the
Shares pursuant to this Agreement shall, at the option of the
Seller, be subject to the satisfaction, on the Closing Date, of the
following conditions:

5.1 Accuracy of Representations and Warranties;
Covenants. Each of the representations and warranties of the
Purchaser contained herein shall be true and correct in all
material respects when made and on and as of the Closing Date, with
the same force and effect as though the same had been made on and
as of the Closing Date, and the Purchaser shall have complied in
all material respects with the covenants and provisions contained
herein required to be performed or complied with at or prior to the
Closing.

5.2 No Proceeding or Litigation. No party hereto shall
be enjoined by a writ, order, decree or injunction from a court of
competent jurisdiction or governmental entity from consummating the
transactions contemplated by this Agreement or the Equity
Agreement, and no proceeding shall have been commenced seeking to
enjoin the consummation of the transactions contemplated hereby or
by the Equity Agreement.

5.3 Officer's Certificate. The Seller shall have
received a certificate from the Purchaser to the effect set forth
in Section 5.1 hereof, dated the Closing Date, signed by a duly
authorized officer of the Purchaser.

5.4 Consents and Approvals. All necessary consents and
approvals of any United States or any other governmental authority
or any other third party required for the consummation of the
transactions contemplated by this Agreement and the Equity
Agreement (other than the KCC with respect to the issuance of the
Note pursuant to the Equity Agreement) shall have been obtained
and all applicable waiting periods in respect of the transactions
contemplated by this Agreement under the HSR Act shall have expired
or been terminated.

5.5 Equity Agreement. The Equity Agreement shall be in
full force and effect.

VI. CLOSING

6.1 Closing Date. The closing with respect to the
transactions provided for in this Agreement (the "Closing") shall
take place at 10:00 a.m., local time, at the offices of Cahill
Gordon & Reindel, 80 Pine Street, New York, New York 10005 on the
fifth Business Day following the satisfaction or waiver of the
conditions referred to in Articles IV and V hereof (or at such
other time or location as the Purchaser and the Seller may agree)
(such date being herein referred to as the "Closing Date").

6.2 Seller Closing Documents. At the Closing, the
Seller shall deliver or cause to be delivered to the Purchaser the
following:

(a) a certificate or certificates representing the
Shares, as provided in Section 1.2(b) hereof;

(b) the officer's certificates of the Seller and
the Guarantor referred to in Section 4.3 hereof; and

(c) an opinion of general counsel to the Seller and
the Guarantor, containing customary qualifications reasonably
acceptable to the Purchaser, to the effect of Sections 2.1, 2.2,
2.3, 2.4, 2.5 and 2.8 hereof.

6.3 Purchaser Closing Documents. At the Closing, the
Purchaser shall deliver or cause to be delivered to the Seller the
following:

(a) the Purchase Price, as provided in Section
1.2(b) hereof;

(b) the officer's certificate of the Purchaser
referred to in Section 5.3 hereof; and

(c) an opinion of counsel to the Purchaser, which
may be general counsel of Purchaser, containing customary
qualifications reasonably acceptable to the Seller, to the effect
of Sections 3.1, 3.2, 3.3 and 3.4 hereof.

6.4 Proceedings. All proceedings that shall be taken
and all documents that shall be executed and delivered by the
parties hereto on the Closing Date shall be deemed to have been
taken and executed simultaneously and no proceedings shall be
deemed taken nor any documents executed or delivered until all have
been taken, executed and delivered. By a party's proceeding with
the Closing, the conditions to such party's obligations set forth
in Article IV or V hereof, as the case may be, shall be deemed
satisfied or waived.

VII. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION

7.1 General Survival. The representations and
warranties contained in this Agreement shall survive the Closing.

7.2 Indemnification. The Seller and the Guarantor (on
the one hand) or the Purchaser (on the other hand) (the
"Indemnifying Party"), shall indemnify respectively the Purchaser
(on the one hand) or the Seller and the Guarantor (on the other
hand), respectively (the "Indemnified Party"), as the case may be,
and their respective directors, officers, agents, and affiliates,
against and in respect of any liabilities, damages, losses, costs
and expenses (including reasonable expenses of investigation and
litigation and reasonable attorneys', accountants' and other
professionals' fees and costs incurred in the investigation or
defense thereof or the enforcement of rights hereunder) incurred by
the Indemnified Party ("Losses") as a result or arising out of any
breach of the Indemnifying Party's representations and warranties
or covenants and agreements set forth in this Agreement or the
Equity Agreement.

7.3 Method of Asserting Claims, etc. All claims for
indemnification by any Indemnified Party hereunder shall be
asserted and resolved as set forth in this Section 7.3.

(a) The Indemnified Party shall give prompt written
notice (a "Claim Notice") to the Indemnifying Party of any
assertion of liability which might give rise to a claim for
indemnification based on the provisions of Section 7.2 hereof,
which notice shall state the nature and basis of the assertion and
the estimated amount thereof to the extent then feasible (which
amount shall not be conclusive of the final amount), provided,
however, that no delay on the part of the Indemnified Party in
giving any such Claim Notice shall relieve the Indemnifying Party
of any indemnification obligation hereunder.

(b) If any claim is made or any action, suit or
proceeding is brought by a third party (a "Third Party Claim")
against an Indemnified Party with respect to which the Indemnifying
Party may have liability under the provisions of Section 7.2
hereof, the Indemnifying Party shall have the right to defend such
Third Party Claim provided that it gives written notice to the
Indemnified Party within 30 days after its receipt of the related
Claim Notice that such Third Party Claim is covered by the
provisions of Section 7.2 hereof.

(c) Notwithstanding the provision of the previous
subsection, until the Indemnifying Party shall have assumed the
defense of any such Third Party Claim, the Indemnified Party shall
retain the right to handle the defense thereof. Furthermore, if
(i) the Indemnified Party shall have reasonably concluded that
there are likely to be defenses available to the Indemnified Party
that are different from or in addition to those available to the
Indemnifying Party; or (ii) the Third Party Claim involves other
than money damages and seeks injunctive or other equitable relief,
the Indemnifying Party shall not be entitled to assume the defense
of such third Party Claim and the defense of the Third Party Claim
shall be handled by the Indemnified Party. If under any
circumstances the defense of the Third Party Claim is handled by
the Indemnified Party, the Indemnifying Party shall pay all legal
and other expenses reasonably incurred by the Indemnified Party in
conducting such defense in accordance with Section 7.2 hereof.

(d) In any Third Party Claim initiated by a third
party and defended by the Indemnifying Party (i) the Indemnified
Party shall have the right to be represented by advisory counsel
and accountants, at its own expense, (ii) the Indemnifying Party
shall keep the Indemnified Party fully informed as to the status of
such Third Party Claim, at all stages thereof, whether or not the
Indemnified Party is represented by its own counsel, (iii) the
Indemnifying Party and the Indemnified Party shall make available
to the other, and its counsel, accountants and other
representatives, all of such party's books and records relating to
such Third Party Claim and (iv) the parties shall render to each
other such assistance as may be reasonably required in order to
ensure the proper and adequate defense of such Third Party Claim.

(e) In any Third Party Claim initiated by a third
party and defended by the Indemnifying Party, the Indemnifying
Party shall not have the right to settle or compromise such Third
Party Claim without the prior written consent of the Indemnified
Party.

VIII. COVENANTS

8.1 Best Efforts. Each party hereto shall use its best
efforts to cause the satisfaction of the conditions precedent set
forth in Articles IV and V hereof and otherwise to cause the
consummation of the transactions contemplated hereby in accordance
with the terms hereof.

8.2 HSR Act Compliance. The Purchaser agrees that it
shall, as soon as reasonably practicable, make or cause to be made
all required filings under the HSR Act in order to commence the
running of the waiting period thereunder, to continue the running
of said waiting period (including any extensions) and prevent or
minimize any tolling thereof.

8.3 Consents and Approvals. Each party hereto agrees to
use its commercially reasonable best efforts to obtain any
governmental or third party consents or approvals necessary to
consummate the transactions contemplated by this Agreement and the
Equity Agreement.

8.4 Publicity. Except as required by law, each party
hereto agrees not to make any press release or public statement
about the transactions contemplated hereby without the prior
approval of the other party hereto with respect to the form and
content of such disclosure.

8.5 No Negotiations. Neither the Seller nor any
affiliate of the Seller (including the Guarantor), nor any of their
officers, directors, employees, agents or representatives, shall,
directly or indirectly, initiate or participate in discussions
with, or otherwise solicit from or communicate with, any Person
regarding any proposals or offers relating directly or indirectly
to the sale of any or all of the Common Shares owned by the Seller
or that could have the effect of frustrating the consummation of
the transactions contemplated hereby or by the Equity Agreement,
unless and until this Agreement and the Equity Agreement are
terminated in accordance with their terms. The Seller or the
Guarantor will promptly inform the Purchaser in writing of any
inquiries, proposals or offers from any Person with respect to any
of the foregoing matters, including the identity of any such Person
and a copy of any written proposal or communication.

IX. GUARANTEE

9.1 Guarantee. The Guarantor hereby irrevocably and
unconditionally guarantees the prompt and punctual performance by
Seller of each of its obligations under this Agreement and the
Equity Agreement.

X. MISCELLANEOUS

10.1 Waivers and Amendments.

(a) This Agreement may not be amended, modified or
supplemented except by a written instrument executed by the parties
hereto. The provisions of this Agreement may be waived only by an
instrument in writing executed by the party granting the waiver.
The waiver by any party hereto of compliance with any provision of
this Agreement shall not operate or be construed as a further or
continuing waiver of such noncompliance or as a waiver of any other
or subsequent noncompliance.

(b) No failure on the part of any party to
exercise, and no delay in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of such right, power or remedy by such party
preclude any other or further exercise thereof or the exercise of
any other right, power or remedy.

10.2 Fees and Expenses. Each party hereto shall be
responsible for its costs and expenses, including all fees and
expenses of attorneys, investment bankers, lenders, financial
advisors and accountants, in connection with the negotiation,
execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby, whether or not such
transactions are consummated.

10.3 Notices. Any and all notices, requests, consents
or any other communication provided for herein shall be made by
hand delivery, first-class mail (registered or certified, return
receipt requested), telecopier or overnight courier and, pending
the designation of another address, addressed as follows:

If to the Seller or the Guarantor at:

3221 North Service Road
P.O. Box 5028
Burlington
Ontario, Canada 17R 3Y8
Fax No. - (905) 332-6550
Attn: Ivan R. Cairns, Esq.

If to the Purchaser at:

818 Kansas Avenue
Topeka, Kansas 66601
Fax No. - (913) 575-8061
Attn: David Wittig

with a copy to:

John K. Rosenberg, Esq.
818 Kansas Avenue
Topeka, Kansas
Fax No. - (913) 575-8136

Except as otherwise provided in this Agreement, each such notice
shall be deemed given at the time delivered.

10.4 Entire Agreement. This Agreement and the Equity
Agreement set forth the entire agreement and understanding between
the parties hereto with respect to the subject matter hereof and
supersede any prior negotiations, agreements, understandings or
arrangements between the parties hereto with respect to the subject
matter hereof.

10.5 Binding Effect; Benefits. This Agreement and the
Equity Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective successors. Nothing in
this Agreement, expressed or implied, is intended to confer on any
person other than the parties hereto, or their respective
successors, any rights, remedies, obligations or liabilities under
or by reason of this Agreement.

10.6 Assignability. This Agreement and any rights
pursuant hereto shall not be assignable by either party hereto
without the prior written consent of the other party; provided,
however, that Purchaser may assign its rights hereunder to any
wholly-owned subsidiary of the Purchaser.

10.7 Defined Terms. As used in this Agreement, the
following terms shall have the meanings set forth below:

(a) "Business Day" means any day on which banks are
not required or authorized to close in New York City.

(b) "Equity Agreement" means the Equity Agreement
dated as of the date hereof attached hereto as Exhibit 1.

(d) "HSR Act" means the Hart-Scott-Rodino Antitrust
Improvement Act of 1976, as amended.

(e) "KCC" means the State Corporation Commission of
the State of Kansas.

(f) "Note" shall have the meaning ascribed thereto
in the Equity Agreement.

(g) "Person" means an individual, partnership,
corporation (including, without limitation, a business trust),
joint stock company, limited liability company, trust,
unincorporated association, joint venture or other entity,
government or governmental authority.

(h) "Securities Act" means the Securities Act of
1933, as amended.

10.8 Applicable law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New
York without regard to principles of conflicts of law.

10.9 Section and Other Headings. The section and other
headings contained in this Agreement are for reference purposes
only and shall not affect the meaning or interpretation of this
Agreement.

10.10 Submission to Jurisdiction. (a) Each of the
parties hereto irrevocably consents that any action or proceeding
brought by the other party hereto in respect of the transaction
contemplated hereby may be brought in the courts of the State of
New York in the Borough of Manhattan or of the United States of
America for the Southern District of New York and, by execution and
delivery of this Agreement, the parties hereto hereby irrevocably
waive any objection, including, without limitation, any objection
to the laying of venue or based on the grounds of forum non
conveniens, which any of them may now or hereafter have to the
bringing of any such action or proceeding in such respective
jurisdiction.

(b) Each of the parties hereto irrevocably consents
to the service of process of any of the aforesaid courts in any
such action or proceeding by the mailing of copies thereof by
registered mail, postage prepaid, to such party at its address
provided herein.

10.11 Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the
same instrument; provided, however, that this Agreement shall not
be effective unless and until at least one counterpart is executed
and delivered by each party hereto.

10.12 Termination. Any party hereto shall be able to
terminate this Agreement and their obligations hereunder if the
Closing shall not have occurred by February 15, 1996, provided that
the party seeking termination is not in breach of any of its
representations, warranties, covenants or agreements contained
herein.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed
this Stock Purchase Agreement on the day and year first above
written.

LAIDLAW TRANSPORTATION, INC.

By:
Name:
Title:

LAIDLAW INC.

By:
Name:
Title:

WESTERN RESOURCES, INC.

By:
Name:
Title:

Exhibit 10(l)1

EQUITY AGREEMENT

EQUITY AGREEMENT, dated December 21, 1995, by and between
Laidlaw Transportation, Inc., a Delaware corporation (the "Seller")
and an indirect wholly-owned subsidiary of Laidlaw Inc., a
corporation continued under the laws of Canada (the "Guarantor"),
Guarantor and Western Resources, Inc., a Kansas corporation (the
"Purchaser"). Certain capitalized terms used herein are defined in
Section 9.7 hereof.

W I T N E S S E T H :

WHEREAS, the Seller owns, in the aggregate, 30,800,000
common shares, par value of $.10 per share (the "Common Stock"), of
ADT Limited, a corporation organized under the laws of Bermuda (the
"Company");

WHEREAS, the Seller, Guarantor and the Purchaser are
parties to a Stock Purchase Agreement dated as of the date hereof
(as modified, amended and supplemented in accordance with its
terms, the "Stock Purchase Agreement"), pursuant to which, subject
to the terms and conditions set forth therein, the Seller has
agreed to sell to the Purchaser and the Purchaser has agreed to
purchase from the Seller 15,400,000 shares of Common Stock (the
"Shares") on the Closing Date (as determined under the Stock
Purchase Agreement);

WHEREAS, the Seller desires to grant to the Purchaser an
option to purchase 15,400,000 shares of Common Stock (the "Option
Shares"), upon the terms and subject to the conditions set forth
herein; and

WHEREAS, the Seller, Guarantor and the Purchaser also
desire to set forth their agreements with respect to certain rights
which exist between them with respect to the Shares and the Option
Shares.

NOW, THEREFORE, in consideration of the premises and the
mutual covenants hereinafter set forth, the parties hereto,
intending to be legally bound, hereby agree as follows:

I. OPTION

1.1 Grant of Option to Purchase Option Shares. The
Seller hereby irrevocably grants to the Purchaser an option to
purchase at any time on or after the Closing Date (as defined in
the Stock Purchase Agreement) and prior to May 15, 1997, the Option
Shares at a price per share of Common Stock of the greater of
(i) $14.00 per share of Common Stock, subject to adjustment as
provided herein (the "Floor Price"), and (ii) the Market Price per
share of Common Stock at the time the Purchaser delivers a notice
of exercise pursuant to Section 1.2, subject to adjustment as
provided herein (the "Exercise Price") (such option is referred to
herein as the "Option").

1.2 Exercise of the Option. The Option may be exercised
by the Purchaser by delivering to the Seller at least 5 Business
Days in advance of the exercise date specified in the notice (the
"Exercise Date") written notice of such exercise, signed by the
Purchaser.

1.3 Exercise Price; Payment.

(a) The Exercise Price shall consist of (i) cash,
or (ii) at Purchaser's option, (A) a 6% promissory note due
January 10, 1999 substantially in the form of Exhibit A hereto (the
"Note") of the Purchaser in an aggregate principal amount, at the
Purchaser's option, of up to $150,000,000 and (B) an amount of cash
equal to the balance of the Exercise Price. Purchaser may not
issue the Note in satisfaction of a portion of the Exercise Price
if, at the date of delivery of notice of the Exercise Date,
Purchaser's First Mortgage Notes are rated less than investment
grade by either Standard & Poor's Corporation or Moody's Investors
Service, Inc.

(b) On the Exercise Date at the Closing (as defined
in Section 6.1), the Purchaser shall, as required by
Section 1.3(a), (i) deliver to the Seller a duly executed Note and
(ii) pay to the Seller any cash consideration by wire transfer of
immediately available funds to such bank account as the Seller
shall specify in writing to Purchaser not later than three Business
Days prior to the Exercise Date, against evidence that the
Purchaser has been entered in the register of members of the
Company and delivery to the Purchaser by the transfer agent of the
Company of a certificate or certificates representing the Option
Shares (subject to adjustment as provided herein), free and clear
of all liens, claims, security interests or encumbrances whatsoever
(including, without limitation, any voting trust or similar
agreement affecting the right to vote the Options Shares), and, if
required, bearing a customary legend reflecting that the Option
Shares have not been registered under the Securities Act, such
legend, if any, and certificate in form and substance satisfactory
to the Purchaser and in such name or names designated by the
Purchaser.

(c) Following the Exercise Date, and for a period
equal to the shorter of (a) twenty days after the Exercise Date and
(b) the time of a public announcement by a third party unaffiliated
with the Purchaser that it intends to acquire the entire share
capital of the Company, Purchaser and its affiliates will not
publicly announce that they intend to acquire the entire share
capital of the Company at a fixed price per share of common stock
unless they pay to Seller in cash the difference between such price
and the Exercise Price; provided, however, that such additional
payment shall only be made if Purchaser and its affiliates
consummate such transaction at a price equal to or greater than the
announced price.

1.4 Adjustments Generally. The Floor Price and the
number of shares of Common Stock (or other securities or property)
deliverable upon exercise of the Option shall be subject to
adjustment from time to time upon the occurrence of certain events,
as provided in Sections 1.5 to 1.10 hereof.

1.5 Common Stock Reorganization. If the Company shall
after the date hereof subdivide its outstanding shares of Common
Stock into a greater number of shares or consolidate its
outstanding shares of Common Stock into a smaller number of shares
(any such event being called a "Common Stock Reorganization"), then
(a) the Floor Price shall be adjusted, effective immediately after
the record date at which the holders of shares of Common Stock are
determined for purposes of such Common Stock Reorganization, to a
price determined by multiplying the Floor Price in effect
immediately prior to such record date by a fraction, the numerator
of which shall be the number of shares of Common Stock outstanding
on such record date before giving effect to such Common Stock
Reorganization and the denominator of which shall be the number of
shares of Common Stock outstanding after giving effect to such
Common Stock Reorganization, and (b) the number of shares of Common
Stock subject to purchase upon exercise of the Option shall be
adjusted, effective at such time, to a number determined by
multiplying the number of shares of Common Stock subject to
purchase immediately before such Common Stock Reorganization by a
fraction, the numerator of which shall be the number of shares
outstanding after giving effect to such Common Stock Reorganization
and the denominator of which shall be the number of shares of
Common Stock outstanding immediately before such Common Stock
Reorganization.

1.6 Common Stock Distribution. If the Company shall
after the date hereof issue or otherwise sell any shares of Common
Stock (otherwise than pursuant to a Common Stock Reorganization),
or any right to subscribe for or purchase Common Stock or a
security convertible into or exchangeable for Common Stock, or
issue any securities convertible into or exercisable for Common
Stock, such that the price per share of Common Stock so issued or
sold, or the price per share of Common Stock issuable upon
exercise, conversion or exchange, is less than the Fair Market
Value of the Common Stock on the date of any such issuance or the
date of announcement of any such issuance, the Purchaser and Seller
shall in good faith determine an adjustment to the Floor Price that
reflects the dilutive effect of any such issuance. In the event
that the Purchaser and Seller cannot agree to an adjustment,
Purchaser and Seller shall reduce their respective proposals to
writing and shall mutually designate a nationally recognized
investment bank to select one of the two proposals, as submitted,
as the final determination of the dispute. The fees and expenses
of the investment bank so selected shall be for the account of the
party whose proposal is not adopted by the investment bank.

1.7 Dividends. If the Company shall after the date
hereof issue or distribute to all or substantially all holders of
shares of Common Stock evidences of indebtedness, any other
securities of the Company or any cash, property or other assets,
and if such issuance or distribution does not constitute a Common
Stock Reorganization or a Common Stock Distribution (any such
nonexcluded event being herein called a "Dividend"), such Dividend
shall be held by the Seller in trust for the Purchaser. At the
time of the exercise of the Option, Purchaser shall have the option
to either (A) elect to receive any such Dividend in which event the
Market Price shall be increased by the Fair Market Value of the
Dividend at the time of its distribution or (B) elect not to
receive any such Dividend, in which event the Floor Price shall be
reduced by the Fair Market Value of the Dividend at the time of its
distribution.

1.8 Capital Reorganization. If after the date hereof
there shall be any consolidation or merger to which the Company is
a party, other than a consolidation or a merger in which the
Company is a continuing corporation and which does not result in
any reclassification of, or change (other than a Common Stock
Reorganization or a change in par value), in, outstanding shares of
Common Stock, or any sale or conveyance of the property of the
Company as an entirety or substantially as an entirety (any such
event being called a "Capital Reorganization"), then, effective
upon the effective date of such Capital Reorganization, the
Purchaser shall have the right to purchase, upon exercise of the
Option, the kind and amount of shares of stock and other securities
and property (including cash) which the Purchaser would have owned
or have been entitled to receive after such Capital Reorganization
if the Option had been exercised immediately prior to such Capital
Reorganization.

1.9 Certain Other Events. If any event occurs after the
date hereof as to which the foregoing Sections 1.5 to 1.8 of this
Article I are not strictly applicable or, if strictly applicable,
would not, in the good faith judgment of the Purchaser, fairly
protect the purchase right of the Option in accordance with the
essential intent and principles of such provisions, then the
Purchaser and the Seller shall make such adjustments in the
application of such provisions, in accordance with such essential
intent and principles, as shall be reasonably necessary to protect
such purchase rights as aforesaid, but in no event shall any such
adjustment have the effect of increasing the Floor Price or
decreasing the number of shares of Common Stock subject to purchase
upon exercise of the Option, or otherwise adversely affect the
holder of the Option.

1.10 Adjustment Rules. (a) Any adjustments pursuant to
Sections 1.5 to 1.9 of this Article I shall be made successively
whenever an event referred to herein shall occur.

(b) If the Company shall set a record date to
determine the holders of shares of Common Stock for purposes of a
Common Stock Reorganization, Common Stock Distribution, Dividend or
Capital Reorganization, and shall legally abandon such action prior
to effecting such Action, then no adjustment shall be made pursuant
to this Article I in respect of such action.

1.11 Reservation of Shares. The Seller will keep
available at all times the number of Option Shares deliverable from
time to time upon exercise of the Option, free and clear of all
liens, claims, security interests or encumbrances whatsoever.

II. VOTING RIGHTS WITH RESPECT TO OPTION SHARES

2.1 Proxy. The Seller hereby grants the Purchaser or a
corporate representative of the Purchaser an irrevocable proxy
deemed coupled with an interest, with full power of substitution,
effective as of the Closing Date (as defined in the Stock Purchase
Agreement) with the full right, power and authority to exercise all
voting and other rights of the Seller with respect to the Option
Shares at any annual, special, adjourned or postponed meeting of
the Company's shareholders, by written consent or otherwise;
provided that such proxy shall terminate with respect to all Option
Shares upon the expiration of the Option or the termination of this
Agreement. The Seller agrees to execute such additional forms of
proxy consistent with the terms of this Section 2.1 as the
Purchaser may request in order to more effectively vest in the
Purchaser the right to vote the Option Shares in accordance with
the Section 2.1. If at any time the holder of this proxy votes the
Option Shares in accordance with the Seller's written request, such
action shall not serve to revoke the proxy or to require the
Purchaser to vote in accordance with the Seller's request in future
votes. The Seller agrees that during the term of the proxy granted
pursuant to this Section 2.1 that the Seller will not directly or
indirectly deposit any Option Shares in a voting trust or subject
them to a voting agreement, grant any other proxy with respect
thereto or enter into any other arrangement of similar effect.

III. TAG ALONG RIGHTS

3.1 Sales by the Purchaser Subject to Tag-Along Rights.
(a) In the event that the Purchaser proposes at any time on or
before May 15, 1997 to effect a sale of more than 2,000,000 Shares
prior to the Exercise Date, then the Purchaser shall promptly give
written notice (the "Tag-Along Notice") to the Seller at least
thirty days prior to the closing of such sale. The Tag-Along
Notice shall describe in reasonable detail the proposed sale
including, without limitation, the name of, and the number of
Shares to be purchased by, the transferee, the purchase price of
each Share to be sold, any other significant terms of such sale and
the date such proposed sale is expected to be consummated.

(b) The Seller shall have the right, exercisable
upon irrevocable written notice to the Purchaser within five
Business Days after receipt of the Tag-Along Notice, to participate
in such sale of Shares on the same terms and conditions as set
forth in the Tag-Along Notice, including, without limitation, the
making of all representations, warranties, indemnifications and
similar agreements, and to sell any portion of the number of the
Option Shares but not more than the Seller's pro rata portion of
the Shares proposed to be sold. The Seller shall also pay its pro
rata portion of the reasonable out-of-pocket fees and expenses of
third parties incurred by the Purchaser in connection with any such
sale. The Seller shall indicate in its notice of election to the
Purchaser the number of Option Shares it desires to sell in such
sale, which number may not be in excess of one-half the number of
Shares proposed to be sold in the Tag-Along Notice. To the extent
the Seller exercises such right of participation in accordance with
the terms and conditions set forth in this Section 3.1, the number
of Shares that the Purchaser may sell in the transaction shall be
correspondingly reduced. Not later than two Business Days prior to
the date scheduled for such sale, the Purchaser shall confirm to
the Seller the number of Option Shares to be sold by the Seller in
such sale.

(c) The Seller shall effect its participation in
the sale by delivering on the date scheduled for such sale to the
Purchaser for delivery to the prospective transferee one or more
certificates, in proper form for transfer, which represent the
number of Option Shares which the Seller is entitled to sell in
accordance with this Section 3.1. In addition, the Seller shall
deliver such other documents and certificates as are required in
connection with such sale. Such stock certificate or certificates
that the Seller delivers to the Purchaser shall be delivered on
such date to such transferee in consummation of the sale of the
Option Shares pursuant to the terms and conditions specified in the
Tag-Along Notice, and the Purchaser shall concurrently therewith
remit to the Seller that portion of the sale proceeds to which the
Seller is entitled by reason of its participation in such sale.
The Purchaser's sale of Shares in any sale proposed in a Tag-Along
Notice shall be effected on the terms and conditions set forth in
such Tag-Along Notice.

(d) The exercise or non-exercise of the rights of
the Seller to participate in one or more sales of Shares made by
the Purchaser shall not adversely affect its rights to participate
in subsequent sales of Shares subject to this Section 3.1

IV. REPRESENTATIONS AND WARRANTIES OF THE SELLER AND THE GUARANTOR

The Seller and the Guarantor hereby represent and warrant
to the Purchaser as follows:

4.1 Organization and Good Standing. Each of the Seller
and the Guarantor are duly organized, validly existing and in good
standing under the laws of their respective jurisdictions of
incorporation.

4.2 Authority Relative to Agreement. Each of the Seller
and the Guarantor have all requisite power and authority to
execute, deliver and perform their respective obligations under
this Agreement and the Stock Purchase Agreement. The execution and
delivery by the Seller and the Guarantor of this Agreement and the
Stock Purchase Agreement, and the consummation by the Seller and
the Guarantor of the transactions contemplated hereby and thereby
(i) have been authorized by all necessary action on the part of the
Seller and the Guarantor, (ii) do not violate any provision of law
or regulation applicable to the Seller or the Guarantor and
(iii) do not conflict with or result in a breach of any provision
of, or constitute a default under, the certificate of incorporation
or bylaws of the Seller or the Guarantor, or any agreement, order,
judgment or decree binding upon the Seller or the Guarantor.

4.3 Consents and Approvals. No filing or registration
with, notification to, or authorization, consent or approval of,
any governmental authority is required by Seller or Guarantor in
connection with the execution and delivery of this Agreement and
the Stock Purchase Agreement, or the consummation of the
transactions contemplated hereby and thereby.

4.4 Effect of Agreement. This Agreement and the Stock
Purchase Agreement have been duly executed and delivered by the
Seller and the Guarantor and (assuming the due authorization,
execution and delivery by the Purchaser) constitute legal, valid
and binding obligations of the Seller and the Guarantor enforceable
against the Seller and the Guarantor in accordance with their
respective terms.

4.5 The Option Shares.

(a) The Seller owns all right, title and interest
in and to the Option Shares, free and clear of any liens, claims,
security interests or encumbrances whatsoever (including, without
limitation, any voting trust or similar arrangement affecting the
right to vote the Option Shares).

(b) The Seller will transfer and deliver to the
Purchaser on the Exercise Date at the Closing valid title to the
Option Shares, free and clear of any liens, claims, security
interests or encumbrances whatsoever (including, without
limitation, any voting trust or similar arrangement affecting the
right to vote the Options Shares).

V. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

The Purchaser hereby represents and warrants to the
Seller as follows:

5.1 Organization and Good Standing. The Purchaser is
duly organized, validly existing and in good standing under the
laws of the State of Kansas.

5.2 Authority Relative to Agreement. The Purchaser has
all requisite power and authority to (i) execute, deliver and
perform its obligations under this Agreement and the Stock Purchase
Agreement and (ii) subject to the consent of the KCC, issue the
Note to be issued by it in the manner and for the purposes
contemplated by this Agreement. The execution and delivery by the
Purchaser of this Agreement and the Stock Purchase Agreement, and
the consummation by the Purchaser of the transactions contemplated
hereby (including, subject to the consent of the KCC, the issuance
by the Purchaser of the Note pursuant hereto) and thereby (i) have
been authorized by all necessary action on the part of the
Purchaser, (ii) do not violate any provision of law or regulation
applicable to the Purchaser and (iii) do not conflict with or
result in a breach of any provision of, or constitute a default
under, the certificate of incorporation or bylaws of the Purchaser,
or any agreement, order, judgment or decree binding upon the
Purchaser.

5.3 Consents and Approvals. No filing or registration
with, notification to, or authorization, consent or approval of,
any governmental entity is required by Purchaser in connection
with the execution and delivery of this Agreement and the Stock
Purchase Agreement, or the consummation of the transactions
contemplated hereby or thereby, except (i) in connection with the
applicable requirements of the HSR Act, (ii) in connection with
filings under the Exchange Act and (iii) in connection with
obtaining the approval of the KCC with respect to the issuance of
the Note.

5.4 Effect of Agreement. This Agreement and the Stock
Purchase Agreement have been duly executed and delivered by the
Purchaser and (assuming the due authorization, execution and
delivery by the Seller and the Guarantor) constitute legal, valid
and binding obligations of the Purchaser enforceable against the
Purchaser in accordance with their respective terms.

VI. CLOSING

VII. SURVIVAL OF REPRESENTATIONS AND WARRANTIES

7.1 General Survival. The representations and
warranties contained in this Agreement shall survive the Closing.

VIII. GUARANTEE

8.1 Guarantee. The Guarantor hereby irrevocably and
unconditionally guarantees the prompt and punctual performance by
Seller of each of its obligations under this Agreement and the
Stock Purchase Agreement.

IX. MISCELLANEOUS

9.1 Waivers and Amendments.

9.2 Fees and Expenses. Each party hereto shall be
responsible for its costs and expenses, including all fees and
expenses of attorneys, investment bankers, lenders, financial
advisors and accountants, in connection with the negotiation,
execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby, whether or not such
transactions are consummated.

9.3 Notices. Any and all notices, requests, consents or
any other communication provided for herein shall be made by hand
delivery, first-class mail (registered or certified, return receipt
requested), telecopier or overnight courier and, pending the
designation of another address, addressed as follows:

If to the Seller or the Guarantor at:

3221 North Service Road
P.O. Box 5028
Burlington
Ontario, Canada 17R 3Y8
Fax No. - (905) 332-6550
Attn: Ivan R. Cairns, Esq.

If to the Purchaser at:

818 Kansas Avenue
Topeka, Kansas 66601
Fax No. - (913) 575-8061
Attn: David Wittig

with a copy to:

John K. Rosenberg, Esq.
818 Kansas Avenue
Topeka, Kansas
Fax No. - (913) 575-8136

Except as otherwise provided in this Agreement, each such notice
shall be deemed given at the time delivered.

9.4 Entire Agreement. This Agreement and the Stock
Purchase Agreement set forth the entire agreement and understanding
between the parties hereto with respect to the subject matter
hereof and supersede any prior negotiations, agreements,
understandings or arrangements between the parties hereto with
respect to the subject matter hereof.

9.5 Binding Effect; Benefits. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and
their respective successors. Nothing in this Agreement, expressed
or implied, is intended to confer on any person other than the
parties hereto, or their respective successors, any rights,
remedies, obligations or liabilities under or by reason of this
Agreement.

9.6 Assignability. This Agreement and any rights
pursuant hereto shall not be assignable by either party hereto
without the prior written consent of the other party; provided,
however, that Purchaser may assign its rights hereunder to any
wholly-owned subsidiary of the Purchaser.

9.7 Defined Terms. As used in this Agreement, the
following terms shall have the meanings set forth below:

(a) "Business Day" shall mean any day on which
banks are not required or authorized to close in New York City.

(b) "Closing Price" with respect to any security on
any day means (a) if such security is listed or admitted for
trading on a national securities exchange, the reported last sales
price regular way or, if no such reported sale occurs on such day,
the average of the closing bid and asked prices regular way on such
day, in each case as reported in the principal consolidated
transaction reporting system with respect to securities listed on
the principal national securities exchange on which such class of
security is listed or admitted to trading, or (b) if such security
is not listed or admitted to trading on any national securities
exchange, the last quoted sales price, or, if not so quoted, the
average of the high bid and low asked prices in the
over-the-counter market on such day as reported by NASDAQ or any
comparable system then in use or, if not so reported, as reported
by any New York Stock Exchange member firm reasonably selected by
the Purchaser for such purpose.

(c) "Fair Market Value" means the fair market value
of the business or property in question, as determined in good
faith by Purchaser and Seller, provided, however, that the Fair
Market Value of any security for which a Closing Price is available
shall be the Trading Market Price of such security. The Fair
Market Value of the Company shall be the Fair Market Value of the
Company and its subsidiaries as a going concern. Notwithstanding
the foregoing, if, at any date of determination of the Fair Market
Value of the Company, the Common Stock of any class shall then be
publicly traded, the Fair Market Value of the Company on such date
shall be the Trading Market Price on such date multiplied by the
number of shares of Common Stock then outstanding on a fully
diluted basis.

(d) "KCC" means the State Corporation Commission of
the State of Kansas.

(e) "Market Price" means the amount equal to the
average per share closing price (regular way) for a round lot of
the shares of Common Stock on the New York Stock Exchange (or, if
not listed on the New York Stock Exchange, such other principal
exchange or system in the United States on which the Common Stock
shall from time to time be traded) on each of the twenty (20)
trading days immediately preceding the delivery of notice of the
Exercise Date; provided, however, that if, within twenty (20)
trading days immediately preceding delivery of notice of the
Exercise Date, a third party unaffiliated with the Purchaser makes
a public announcement that it intends to acquire the entire share
capital of the Company at a fixed price per share of Common Stock,
Market Price shall mean the amount equal to the average per share
closing price (regular way) for a round lot of shares of Common
Stock on the New York Stock Exchange (or, if not listed on the New
York Stock Exchange, such other principal exchange or system in the
United States on which the Common Stock shall from time to time be
traded) on each trading day ended after such announcement, but in
no event more than the fixed price so announced.

(f) "Person" shall mean an individual, partnership,
corporation (including, without limitation, a business trust),
joint stock company, limited liability company trust,
unincorporated association, joint venture or other entity,
government or governmental authority.

(g) "Securities Act" means the Securities Act of
1933, as amended.

(h) "Trading Market Price" with respect to any
security on any day means the average of the daily Closing Prices
of a share or unit of such security for the 20 consecutive Business
Days ending on the most recent Business Day for which a Closing
Price is available; provided, however, that in the event that, in
the case of Common Stock, the Trading Market Price is determined
during a period following the announcement by the Company of (A) a
dividend or distribution of Common Stock, or (B) any subdivision,
combination or reclassification of Common Stock and prior to the
expiration of 20 Business Days after the ex-dividend date for such
dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the
Trading Market Price shall be appropriately adjusted to reflect the
current market price per share equivalent of Common Stock.

9.8 Applicable Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York
without regard to principles of conflicts of law.

9.9 Section and Other Headings. The section and other
headings contained in this Agreement are for reference purposes
only and shall not affect the meaning or interpretation of this
Agreement.

9.10 Submission to Jurisdiction. (a) Each of the
parties hereto irrevocably consents that any action or proceeding
brought by the other party hereto in respect of the transaction
contemplated hereby may be brought in the courts of the State of
New York in the Borough of Manhattan or of the United States of
America for the Southern District of New York and, by execution and
delivery of this Agreement, the parties hereto hereby irrevocably
waive any objection, including, without limitation, any objection
to the laying of venue or based on the grounds of forum non
conveniens, which any of them may now or hereafter have to the
bringing of any such action or proceeding in such respective
jurisdiction.

9.11 Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the
same instrument; provided, however, that this Agreement shall not
be effective unless and until at least one counterpart is executed
and delivered by each party hereto.

9.12 Termination. Any party hereto shall be able to
terminate this Agreement and their obligations hereunder if the
Stock Purchase Agreement has been terminated pursuant to Section
10.12 thereof.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement on the day and year first above written.

LAIDLAW TRANSPORTATION, INC.

By:
Name:
Title:

LAIDLAW INC.

By:
Name:
Title:

WESTERN RESOURCES, INC.

By:
Name:
Title:
<PAGE>
Exhibit A to
Equity Agreement

FORM OF PROMISSORY NOTE

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS,
AND MAY NOT BE OFFERED OR SOLD, UNLESS IT HAS BEEN REGISTERED UNDER
SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR UNLESS AN
EXEMPTION FROM REGISTRATION IS AVAILABLE.

$[ ]

WESTERN RESOURCES, INC.

6% Promissory Note

Western Resources, Inc., a Kansas corporation (together
with its successors, the "Borrower"), for value received hereby
promises to pay to

LAIDLAW TRANSPORTATION, INC.

(the "Holder") the principal sum of

AMOUNT IN WORDS

by wire transfer of immediately available funds to the Holder's
account (the "Bank Account") at such bank in the United States as
may be specified in writing by the Holder to the Borrower at the
time of issuance of the Note, on January 10, 1999, in such coin or
currency of the United States of America as at the time of payment
shall be legal tender for the payment of public and private debts,
and to pay interest, semi-annually in arrears, on January 10 and
July 10 (unless such day is not a Business Day, in which event on
the next succeeding Business Day) (each an "Interest Payment Date")
of each year in which this Note remains outstanding, commencing
with the next January 10 or July 10 after issuance of this Note, on
the principal sum hereof outstanding in like coin or currency, at
the rate of 6% per annum, by wire transfer of immediately available
funds to the Bank Account from the most recent Interest Payment
Date to which interest has been paid on this Note, or if no
interest has been paid on this Note, from the date of issuance of
this Note, until payment in full of the principal sum hereof has
been made. Interest shall be computed on the basis of a 360-day
year and twelve months of 30 days.

This Note is a duly authorized Promissory Note of the
Borrower (the "Note") referred to in the Equity Agreement dated as
of December 21, 1995 between the Borrower and the Holder (as the
same may be amended from time to time in accordance with its terms,
the "Agreement").

1. Certain Terms Defined. All terms defined in the
Agreement and not otherwise defined herein shall have for purposes
hereof the meanings provided for therein.

2. Event of Default Defined; Acceleration of Maturity.
In case one or more of the following Events of Default (whatever
the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any
order, rule or regulation of any administrative or governmental
body) shall have occurred and be continuing:

(a) default in the payment of all or any part of the
principal on this Note as and when the same shall become due
and payable at maturity; or

(b) default in the payment of any installment of
interest upon this Note, as and when the same shall become due
and payable, and continuance of such default for a period of
10 days; or

(c) the Borrower shall commence a voluntary case or
other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter
in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such
relief or to the appointment of or taking possession by any
such official in an involuntary case or other proceeding
commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its
debts as they become due, or shall take any corporate action
to authorize any of the foregoing; or

(d) an involuntary case or other proceeding shall be
commenced against the Borrower seeking liquidation,
reorganization or other relief with respect to it or its debts
under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of
it or any substantial part of its property, and such
involuntary case or other proceeding shall remain undismissed
and unstayed for a period of 120 days; or an order for relief
shall be entered against the Borrower under the federal
bankruptcy laws as now or hereafter in effect;

then, and in each and every such case (other than under clauses
(iii) and (iv)), unless the principal of this Note shall have
already become due and payable, the Holder, by notice in writing to
the Borrower, may declare the entire principal amount of this Note
together with accrued interest thereon to be, and upon the
Borrower's receipt of such notice the entire principal amount of
this Note together with accrued interest thereon shall become,
immediately due and payable. If an Event of Default specified in
clause (iii) or (iv) occurs, the principal of and accrued interest
on this Note will be immediately due and payable without any
declaration or other act on the part of the Holder. The Holder may
rescind an acceleration and its consequences.

3. Prepayment of Note. The Borrower at its option may
at any time prepay all or any part of the principal amount of this
Note at a redemption price equal to 100.00% of the principal amount
of this Note so prepaid, together with accrued and unpaid interest
thereon through the day of prepayment.

4. Transfer Limitation. This Note may not be sold,
assigned, pledged, hypothecated or transferred in any manner
without the consent of Borrower.

5. Security. Subject to compliance with applicable
governmental regulations, the obligations of the Borrower to pay
interest and principal on this Note are secured by a pledge to the
Borrower, as agent for the Holder, of the minimum number of Option
Shares which will comply with applicable government regulations and
be not less than the outstanding principal amount of this Note
divided by the Exercise Price per Option Share paid by the
Borrower.

6. Miscellaneous. THIS NOTE SHALL BE DEEMED TO BE A
CONTRACT UNDER THE LAWS OF NEW YORK, AND FOR ALL PURPOSES SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE WITHOUT REGARD
TO CONFLICT OF LAW PRINCIPLES THEREOF. The parties hereto hereby
waive presentment, demand, notice, protest and all other demands
and notices in connection with the delivery, acceptance,
performance and enforcement of this Note, except as specifically
provided herein, and assent to extensions of the time of payment,
or forbearance or other indulgence without notice. The Borrower
and Holder hereby submit to the exclusive jurisdiction of the
United States District Court for the Southern District of New York
and of any New York state court sitting in New York City for
purposes of all legal proceedings arising out of or relating to
this Note. The Borrower and Holder irrevocably waive, to the
fullest extent permitted by law, any objection which either may now
or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.
<PAGE>
The Holder of this Note by acceptance of this Note agrees
to be bound by the provisions of this Note which are expressly
binding on such Holder.

IN WITNESS WHEREOF, the Borrower has caused this
instrument to be duly executed.

Dated: , 199

WESTERN RESOURCES, INC.

By:
Name:
Title:

Exhibit 10(m)

April 27, 1995

Mr. David C. Wittig
1030 Fifth Avenue, Apt. 8W
New York, NY 10028

Dear David:

We have had discussions over the last few months about our mutual
interest in your taking a position on Western Resources' senior management
team. Based on those discussions, and subject to the approval of the Western
Resources Board of Directors, I am pleased to offer you the position of
Executive Vice President, Corporate Strategy for Western Resources. In that
position, you would report to me and be primarily responsible for leading our
effort to grow our business. In addition, as a member of Western Resources'
President's Council, you would participate with other senior officers in the
formation and implementation of corporate policy regarding all aspects of the
Company's operations.

Your annual base compensation would be set at $425,000. The Board's
current practice is to review officer compensation annually at its January
meeting. In addition to base compensation, you would be eligible to
participate in the Company's standard short and long term incentive plans for
officers. Those plans, while subject to change, currently provide an
opportunity for additional cash compensation of up to 36% of base and, on a
rolling three year basis, a common stock grant equivalent in value of up to
10% of base. (Since you would be joining the Company at mid-year, we would
establish partial year goals for you for the balance of 1995 and would pro
rate your eligibility for 1995 incentive awards.) In addition, you will be
enrolled in Western Resources, Inc.'s Executive Salary Continuation Plan
(revised March 15, 1995).

As an inducement to cause you to favorably consider accepting a combined
level of base and incentive compensation, which is significantly below the
level you have regularly earned in your present position, and as a means to
encourage your long term commitment to Western Resources, we offer you the
following non-standard benefit. Upon four years employment with Western
Resources, you will vest in a supplemental benefit in a form agreeable to you
and the Company, which is equivalent in value to an annual cash outlay by the
Company of $25,000, beginning in 1995 and continuing through 2020.

Mr. David C. Wittig
Page 2
April 27, 1995

In addition to the above, you will receive all benefits which are
customarily offered to officers who serve on Western Resources' President's
Council. These include a deferred compensation plan, a 401(K) savings plan, a
qualified retirement plan, medical/dental insurance, life insurance,
accidental death and dismemberment insurance, short and long term disability
protection, sick leave, vacation and holiday leave, up to $5,000 annually to
cover financial planning and tax preparation, a car allowance, personal use of
a cellular phone, a club membership, an employment agreement, and relocation
benefits, as we have discussed.

David, I believe this is an outstanding opportunity for you and for
Western Resources. I look forward to your early reply and to welcoming you to
the Western Resources team. Please call me if you want to discuss any of
this.

Sincerely,

Accepted:

David C. Wittig

Date

Exhibit 21

WESTERN RESOURCES, INC.
Subsidiaries of the Registrant

State of Date
Subsidiary Incorporation Incorporated

1) Kansas Gas and Electric Company Kansas October 9, 1990

2) Mid Continent Market Center, Inc. Kansas December 13, 1994

3) Westar Business Services Kansas April 14, 1995

4) Westar Consumer Services Kansas April 14, 1995

5) Westar Capital Kansas October 8, 1990

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 1995

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-7324

KANSAS GAS AND ELECTRIC COMPANY
(Exact name of registrant as specified in its charter)

KANSAS 48-1093840
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

P.O. BOX 208, WICHITA, KANSAS 67201
(Address of Principal Executive Offices) (Zip Code)

Registrant's telephone number, including area code 316/261-6611

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

Indicate the number of shares outstanding of each of the registrant's classes
of common stock.

Common Stock, No par value 1,000 Shares
(Title of each class) (Outstanding at March 27, 1996)

Registrant meets the conditions of General Instruction J(1)(a) and (b) to Form
10-K for certain wholly-owned subsidiaries and is therefore filing an
abbreviated form.

<PAGE 2>
KANSAS GAS AND ELECTRIC COMPANY
FORM 10-K
December 31, 1995

TABLE OF CONTENTS

Description Page

PART I
Item 1. Business 3

Item 2. Properties 11

Item 3. Legal Proceedings 12

Item 4. Submission of Matters to a Vote of
Security Holders 12

PART II
Item 5. Market for Registrant's Common Equity and
Related Stockholder Matters 12

Item 6. Selected Financial Data 12

Item 7. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 13

Item 8. Financial Statements and Supplementary Data 18

Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 40

PART III
Item 10. Directors and Executive Officers of the
Registrant 41

Item 11. Executive Compensation 42

Item 12. Security Ownership of Certain Beneficial
Owners and Management 42

Item 13. Certain Relationships and Related Transactions 42

PART IV
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K 43

Signatures 46

<PAGE 3> PART I

ITEM 1. BUSINESS

ACQUISITION AND MERGER

On March 31, 1992, Western Resources, Inc. (formerly The Kansas Power and
Light Company) (Western Resources) through its wholly-owned subsidiary KCA
Corporation (KCA), acquired all of the outstanding common and preferred stock
of Kansas Gas and Electric Company (KGE) (the Merger). Simultaneously, KCA
and Kansas Gas and Electric Company merged and adopted the name Kansas Gas and
Electric Company (the Company, KGE).

Additional information relating to the Merger can be found in Management's
Discussion and Analysis of Financial Condition and Results of Operations.

GENERAL

The Company is an electric public utility engaged in the generation,
transmission, distribution and sale of electric energy in the southeastern
quarter of Kansas including the Wichita metropolitan area. The Company owns
47% of Wolf Creek Nuclear Operating Corporation, the operating company for
Wolf Creek Generating Station (Wolf Creek). Corporate headquarters of the
Company is located in Wichita, Kansas. The Company has no gas properties. At
December 31, 1995, the Company had no employees. All employees are provided
by the Company's parent, Western Resources, Inc. (Western Resources).

In January 1996, the KCC initiated an order for a generic investigation to
analyze matters related to the potential restructuring of the electric
industry and the overall implications to both utilities and public interests
within the state of Kansas. This order was initiated given recent
developments at the Federal Energy Regulatory Commission (FERC), other state
regulatory agencies and increased competition among utilities related to large
industrial electric customers. The order was established as a means to define
the KCC's role within the electric generation industry as it may become more
competitive, and address any developments as they may occur. Currently, there
are no proceedings or actions at the KCC which would open the Company's
current electric markets to greater competition, nor establish guidelines at
to a change in the degree of regulatory oversight that the KCC has on the
Company's operations.

For discussion regarding competition in the electric utility industry and
the potential impact on the Company, see Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations, Other Information,
Competition included herein.

Discussion of other factors affecting the Company are set forth in the
Notes to Financial Statements and Management's Discussion and Analysis
included herein.

ELECTRIC OPERATIONS

General

The Company supplies electric energy at retail to approximately 275,000
customers in 139 communities in Kansas. The Company also supplies electric
energy to 27 communities and 1 rural electric cooperative, and has contracts
for the sale, purchase or exchange of electricity with other utilities at
wholesale.

The Company's electric sales for the last five years were as follows:

1995 1994 1993 1992 1991
(Thousands of MWH)
Residential 2,385 2,384 2,386 2,102 2,341
Commercial 2,095 2,068 1,991 1,892 1,908
Industrial 3,542 3,371 3,323 3,248 3,194
Wholesale and
Interchange 1,292 1,590 2,004 1,267 1,168
Other 45 45 45 46 46
Total 9,359 9,458 9,749 8,555 8,657

The Company's electric revenues for the last five years were as follows:

1995 1994 1993 1992 1991
(Dollars in Thousands)
Residential $221,628 $220,067 $219,069 $194,142 $219,907
Commercial 171,654 167,499 162,858 154,005 155,847
Industrial 182,930 181,119 179,256 174,226 172,953
Wholesale and
Interchange 31,143 38,750 45,843 28,086 29,989
Other 16,513 12,445 9,971 6,792 16,272
Total $623,868 $619,880 $616,997 $554,251 $594,968

Capacity

The aggregate net generating capacity of the Company's system is presently
2,501 megawatts (MW). The system comprises interests in twelve fossil fueled
steam generating units, one nuclear generating unit (47% interest) and one
diesel generator, located at seven generating stations. One of the twelve
fossil fueled units (70 MW capacity) has been "mothballed" for future use (See
Item 2. Properties).

The Company's 1995 peak system net load occurred on July 11, 1995 and
amounted to 1,855 MW. The Company's net generating capacity together with
power available from firm interchange and purchase contracts, provided a
capacity margin of approximately 17% above system peak responsibility at the
time of the peak.

The Company and ten companies in Kansas and western Missouri have agreed
to provide capacity (including margin), emergency and economy services for
each other. This arrangement is called the MOKAN Power Pool. The pool
participants also coordinate the planning of electric generating and
transmission facilities.
<PAGE 5>
The Company is one of 47 members of the Southwest Power Pool (SPP). SPP's
responsibility is to maintain system reliability on a regional basis. The
region encompasses areas within the eight states of Kansas, Missouri,
Oklahoma, New Mexico, Texas, Louisiana, Arkansas, and Mississippi.

During 1994, the Company entered into an agreement with Midwest Energy,
Inc. (MWE), whereby the Company will provide MWE with peaking capacity of 61
megawatts through the year 2008. The Company also entered into an agreement
with Empire District Electric Company (Empire), whereby the Company will
provide Empire with peaking and base load capacity (20 megawatts in 1994
increasing to 80 megawatts in 2000) through the year 2000.

Future Capacity

Fuel Mix

The Company's coal-fired units comprise 1,100 MW of the total 2,501 MW of
generating capacity and the Company's nuclear unit provides 548 MW of
capacity. Of the remaining 853 MW of generating capacity, units that can burn
either natural gas or oil account for 850 MW, and the remaining unit which
burns only diesel fuel accounts for 3 MW (See Item 2. Properties).

During 1995, low sulfur coal was used to produce 52% of the Company's
electricity. Nuclear produced 40% and the remainder was produced from natural
gas, oil, or diesel fuel. During 1996, based on the Company's estimate of the
availability of fuel, coal will to be used to produce approximately 61% of the
Company's electricity and nuclear will be used to produce 31%.

The Company's fuel mix fluctuates with the operation of nuclear powered
Wolf Creek which has an 18-month refueling and maintenance schedule. The
18-month schedule permits uninterrupted operation every third calendar year.
Wolf Creek was taken off-line on February 3, 1996 for its eighth refueling and
maintenance outage. The outage is expected to last approximately 60 days
during which time electric demand will be met primarily by the Company's
coal-fired operating units.

Nuclear

The owners of Wolf Creek have on hand or under contract 75% of the uranium
required for operation of Wolf Creek through the year 2003. The balance is
expected to be obtained through spot market and contract purchases. The
Company has four contracts with the following three suppliers for uranium:
Cameco, Geomex Minerals, Inc., and Power Resources, Inc.

The Company has three contracts for uranium enrichment performed by USEC,
Urenco and Nuexco Trading Corp. These contractual arrangements cover 100% of
Wolf Creek's uranium enrichment requirements for 1996-1997, 90% for 1998-1999,
95% for 2000-2001 and 100% for 2005-2014. The balance of the 1998-2005
requirements is expected to be obtained through a combination of spot market
and contract purchases. The decision not to contract for the full enrichment
requirements is one of cost rather than availability of service.

A contractual arrangement is in place with Cameco for the conversion of
uranium to uranium hexafluoride sufficient to meet Wolf Creek's requirements
through the year 2000.

Additional information with respect to insurance coverage applicable to
the operations of the Company's nuclear operating facility is set forth in
Note 2 of the Notes to Financial Statements.

Coal

The three coal-fired units at Jeffrey Energy Center (JEC) have an
aggregate capacity of 428 MW (KGE's 20% share) (See Item 2. Properties).
Western Resources, the operator of JEC, and KGE, have a long-term coal supply
contract with Amax Coal West, Inc. (AMAX), a subsidiary of Cyprus Amax Coal
Company, to supply low sulfur coal to JEC from AMAX's Eagle Butte Mine or an
alternate mine source of AMAX's Belle Ayr Mine, both located in the Powder
River Basin in Campbell County, Wyoming. The contract expires December 31,
2020. The contract contains a schedule of minimum annual delivery quantities
based on MMBtu provisions. The coal to be supplied is surface mined and has
an average Btu content of approximately 8,300 Btu per pound and an average
<PAGE 7>
sulfur content of .43 lbs/MMBtu (See Environmental Matters). The average
delivered cost of coal for JEC was approximately $1.13 per MMBtu or $18.71 per
ton during 1995.

Coal is transported by Western Resources from Wyoming under a long-term
rail transportation contract with Burlington Northern (BN) and Union Pacific
(UP) to JEC through December 31, 2013. Rates are based on net load carrying
capabilities of each rail car. Western Resources provides 890 aluminum rail
cars, under a 20 year lease, to transport coal to JEC.

La Cygne 2 and additional La Cygne 1 Powder River Basin coal is supplied
through several contracts expiring at various times through 1998. This low
sulfur coal had an average Btu content of approximately 8,500 Btu per pound
and a maximum sulfur content of .50 lbs/MMBtu (See Environmental Matters).
For 1996, KCPL has secured Powder River Basin coal from Powder River Coal
Company, a subsidiary of Peabody Coal Company. Transportation is covered by
KCPL through its Omnibus Rail Transportation Agreement with BN and Kansas City
Southern Railroad through December 31, 2000.

The Company has entered into all of its coal and transportation contracts
during the ordinary course of business and is not substantially dependent upon
these contracts. The Company believes there are other supplies for and
plentiful sources of coal available at reasonable prices to replace, if
necessary, fuel to be supplied pursuant to these contracts. In the event that
the Company were required to replace its coal or transportation agreements, it
would not anticipate a substantial disruption of the Company's business.

Natural Gas

The Company uses natural gas as a primary fuel in its Gordon Evans and
Murray Gill Energy Centers. Natural gas for these generating stations is
supplied by readily available gas from the spot market. Short-term economical
spot market purchases will supply the system with the flexible natural gas
supply to meet operational needs.

Oil

The Company uses oil as an alternate fuel when economical or when
interruptions to natural gas make it necessary. Oil is also used as a
supplemental fuel at JEC and La Cygne generating stations. All oil burned by
<PAGE 8>
the Company during the past several years has been obtained by spot market
purchases. At December 31, 1995, the Company had approximately 676 thousand
gallons of No. 2 oil and 11 million gallons of No. 6 oil which is believed to
be sufficient to meet emergency requirements and protect against lack of
availability of natural gas and/or the loss of a large generating unit.

Other Fuel Matters

Set forth in the table below is information relating to the weighted
average cost of fuel used by the Company.
1995 1994 1993 1992 1991
Per Million Btu:
Nuclear $0.40 $0.36 $0.35 $0.34 $0.32
Coal 0.91 0.90 0.96 1.25 1.32
Gas 1.68 1.98 2.37 1.95 1.74
Oil 4.00 3.90 3.15 4.28 4.13

Cents per KWH Generation 0.82 0.89 0.93 0.98 1.09

Environmental Matters

The Federal sulfur dioxide standards applicable to the Company's JEC and
La Cygne 2 units, prohibit the emission of more than 1.2 pounds of sulfur
dioxide per million Btu of heat input. Federal particulate matter emission
standards applicable to these units prohibit: (1) the emission of more than
0.1 pounds of particulate matter per million Btu of heat input and (2) an
opacity greater than 20%. Federal NOx emission standards applicable to these
units prohibit the emission of more than 0.7 pounds of NOx per million Btu of
heat input.

The Kansas Department of Health and Environment regulations, applicable to
the Company's other generating facilities, prohibit the emission of more than
3.0 pounds of sulfur dioxide per million Btu of heat input at the Company's
generating units. The Company has sufficient low sulfur coal under contract
(See Coal) to allow compliance with such limits at La Cygne 1. All facilities
burning coal are equipped with flue gas scrubbers and/or electrostatic
<PAGE 9>
precipitators.

The NOx and toxic limits, which were not set in the law, were proposed by
the EPA in January 1996. The Company is currently evaluating the steps it
will need to take in order to comply with the proposed new rules, but is
unable to determine its compliance options or related compliance costs until
the evaluation is finished later this year. The Company will have three years
to comply with the new rules.

Additional information with respect to Environmental Matters is discussed
in Note 2 of the Notes to Financial Statements.

FINANCING

The Company's ability to issue additional debt is restricted under
limitations imposed by the Mortgage and Deed of Trust of the Company.

The Company's mortgage prohibits additional first mortgage bonds from
being issued (except in connection with certain refundings) unless the
Company's net earnings before income taxes and before provision for retirement
and depreciation of property for a period of 12 consecutive months within 15
months preceding the issuance are not less than two and one-half times the
annual interest charges on, or 10% of the principal amount of, all first
mortgage bonds outstanding after giving effect to the proposed issuance.
Based on the Company's results for the 12 months ended December 31, 1995,
approximately $937 million principal amount of additional first mortgage bonds
could be issued (7.25% interest rate assumed).

KGE bonds may be issued, subject to the restrictions in the preceding
paragraph, on the basis of property additions not subject to an unfunded prior
lien and on the basis of bonds which have been retired. As of December 31,
1995, the Company had approximately $1.3 billion of net bondable property
additions not subject to an unfunded prior lien entitling the Company to issue
up to $922 million principal amount of additional bonds. As of December 31,
1995, $1 million in additional bonds could be issued on the basis of retired
bonds.

<PAGE 10>
REGULATION AND RATES

The Company is subject as an operating electric utility to the
jurisdiction of the Kansas Corporation Commission (KCC) which has general
regulatory authority over the Company's rates, extensions and abandonments of
service and facilities, valuation of property, the classification of accounts
and various other matters. The Company is also subject to the jurisdiction of
the FERC and the KCC with respect to the issuance of the Company's securities.

Additionally, the Company is subject to the jurisdiction of the FERC,
including jurisdiction as to rates with respect to sales of electricity for
resale, and the Nuclear Regulatory Commission as to nuclear plant operations
and safety.

Additional information with respect to Regulation and Rates is discussed
in Notes 1 and 3 of the Notes to Financial Statements.

EXECUTIVE OFFICERS OF THE COMPANY
Other Offices or Positions
Name Age Present Office Held During Past Five Years

William B. Moore 43 Chairman of the Board Vice President, Finance
and President (since Western Resources, Inc.
June 1995)

Richard D. Terrill 41 Secretary, Treasurer
and General Counsel

Executive officers serve at the pleasure of the Board of Directors. There are
no family relationships among any of the officers, nor any arrangements or
understandings between any officer and other persons pursuant to which he/she
was appointed as an officer.
<PAGE 11>

ITEM 2. PROPERTIES

The Company owns or leases and operates an electric generation,
transmission, and distribution system in Kansas.

During the five years ended December 31, 1995, the Company's gross
property additions totaled $389,689,000 and retirements were $127,740,000.

ELECTRIC FACILITIES
Unit Year Principal Unit Capacity
Name No. Installed Fuel (MW) (2)

Gordon Evans Energy Center:
Steam Turbines 1 1961 Gas--Oil 150
2 1967 Gas--Oil 367

Jeffrey Energy Center (20%) (3):
Steam Turbines 1 1978 Coal 140
2 1980 Coal 147
3 1983 Coal 141

La Cygne Station (50%) (3):
Steam Turbines 1 1973 Coal 341
2 1977 Coal 331

Murray Gill Energy Center:
Steam Turbines 1 1952 Gas--Oil 46
2 1954 Gas--Oil 74
3 1956 Gas--Oil 107
4 1959 Gas--Oil 106

Neosho Energy Center:
Steam Turbine 3 1954 Gas--Oil 0 (1)

Wichita Plant:
Diesel Generator 5 1969 Diesel 3

Wolf Creek Generating Station (47%)(3):
Nuclear 1 1985 Uranium 548

Total 2,501

(1) This unit has been "mothballed" for future use.

(2) Based on MOKAN rating.

(3) The Company jointly owns Jeffrey Energy Center (20%), La Cygne Station
(50%) and Wolf Creek Generating Station (47%).

<PAGE 12>
ITEM 3. LEGAL PROCEEDINGS

Information on legal proceedings involving the Company is set forth in
Notes 2, 3, and 9 of Notes to Financial Statements included herein. See also
Item 1. Business, Environmental Matters, and Regulation and Rates.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Information required by Item 4 is omitted pursuant to General Instruction
J(2)(c) to Form 10-K.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company's common stock is owned by Western Resources and is not traded
on an established public trading market.

ITEM 6. SELECTED FINANCIAL DATA
<TABLE>

1995 1994 1993 1992 1991
(Dollars in Thousands)

<S> <C> <C> <C> <C> <C>
Income Statement Data:

Operating revenues . . . . . . . $ 623,868 $ 619,880 $ 616,997 $ 554,251 $ 594,968
Operating expenses . . . . . . . 474,864 470,869 469,616 424,089 468,885
Operating income . . . . . . . . 149,004 149,011 147,381 130,162 126,083
Net income . . . . . . . . . . . 110,873 104,526 108,103 77,981 53,602

Balance Sheet Data:

Gross electric plant in service. $3,427,928 $3,390,406 $3,339,832 $3,293,365 $2,468,959
Construction work in progress. . 40,810 32,874 28,436 29,634 13,612
Total assets . . . . . . . . . . 3,203,414 3,237,684 3,187,479 3,279,232 2,350,546
Long-term debt . . . . . . . . . 684,082 699,992 653,543 871,652 850,851

Interest coverage ratio (before
income taxes, including
AFUDC) . . . . . . . . . . . . 4.11 4.02 3.58 2.35 1.90

Ratio of Earnings to Fixed Charge 2.58 2.61 2.60 1.89 1.59
</TABLE>

<PAGE 13>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

FINANCIAL CONDITION

GENERAL: The Company had net income of $110.9 million for 1995 compared
to net income of $104.5 million in 1994. The increase in net income is
primarily due to increased retail sales and the receipt of death benefit
proceeds from corporate-owned life insurance policies in the fourth quarter of
1995.

LIQUIDITY AND CAPITAL RESOURCES: The Company's liquidity is a function of
its ongoing construction and maintenance program designed to improve
facilities which provide electric service and meet future customer service
requirements.

During 1995, construction expenditures for the Company's electric system
were approximately $65 million and nuclear fuel expenditures were
approximately $28 million. It is projected that adequate capacity margins
will be maintained through the turn of the century. The construction program
is focused on providing service to new customers and improving present
electric facilities.

Capital expenditures for 1996 through 1998 are anticipated to be as
follows:

Electric Nuclear Fuel
(Dollars in Thousands)
1996. . . . . . . . . . $51,800 $ 3,300
1997. . . . . . . . . . 51,900 22,300
1998. . . . . . . . . . 49,200 20,800

These expenditures are estimates prepared for planning purposes and are
subject to revisions.

The Company's net cash flows to capital expenditures exceeded 100% for
1995 and during the last five years has also averaged in excess of 100%. This
ratio indicates the extent to which the Company is able to fund its capital
expenditures with cash flow from operating activities. This ratio is
calculated from the Company's Statements of Cash Flows as net cash flow from
operating activities, less changes in working capital, less dividends on
common stock, divided by additions to utility plant. The Company anticipates
all of its cash requirements for capital expenditures through 1998 will be
provided from net cash flows. The Company also has $16 million of bonds
maturing through 2000, all in 1996, which will be provided from internal and
external sources available under then existing financial conditions.

The embedded cost of long-term debt was 7.3% at December 31, 1995 and
December 31, 1994.

In 1986, the Company purchased corporate-owned life insurance policies
(COLI) on certain of its employees. The annual cash outflow for the premiums
on these policies was approximately $30 million for 1995 and $27 million for
1994 and 1993. In June, 1995, the Company increased its borrowings against
the accumulated cash surrender values of the policies by $45 million. Total
1995 COLI borrowings amounted to $353 million. See Note 1 of the Notes to
Financial Statements for additional information on the accumulated cash
<PAGE 14>
surrender value. The borrowings are expected to produce annual cash inflows,
net of expenses, through the remaining life of the policies. Borrowings
against the policies will be repaid from death proceeds (See Note 1).

The Company's short-term financing requirements are satisfied, as needed,
through short-term bank loans and borrowings under other lines of credit
maintained with banks. Short-term borrowings amounted to $50 million at
December 31, 1995 and December 31. 1994.

The Company's capital structure at December 31, 1995, was 63% common stock
equity and 37% long-term debt. The capital structure at December 31, 1995,
including short-term debt was 61% common stock equity and 39% debt.

RESULTS OF OPERATIONS

The following is an explanation of significant variations from prior year
results in revenues, operating expenses, other income and deductions, and
interest charges. Additional information relating to changes between years is
provided in the Notes to Financial Statements.

REVENUES

The operating revenues of the Company are based on sales volumes and rates
authorized by the KCC and the FERC. Rates charged for the sale and delivery
of electricity are designed to recover the cost of service and allow investors
a fair rate of return. Future electric sales will be affected by weather
conditions, competition from other sources of energy, competing fuel sources,
customer conservation efforts and the overall economy of the Company's service
area.

In March 1992, in connection with the acquisition of the Company by
Western Resources, the KCC approved the elimination of the Energy Cost
Adjustment Clause (ECA) for most retail customers of the Company effective
April 1, 1992. The fuel costs are now included in base rates and were
established at a level intended by the KCC to equal the projected average cost
of fuel through August 1995. Therefore, if the Company wished to recover an
increase in fuel costs above the projected average cost it would have to file
a request for recovery in a rate filing with the KCC which request could be
denied in whole or in part. The Company's fuel costs represented 22% and 24%
of its total operating expenses for the years ended December 31, 1995 and
1994, respectively. Any increase in fuel costs from the projected average
which the Company did not recover through rates would impact the Company's
earnings. The degree of any such impact would be affected by a variety of
factors, however, and thus cannot now be predicted.

1995 Compared to 1994: Total operating revenues for 1995 of $623.9 million
increased less than one percent from revenues of $619.9 million for 1994 as a
result of increased sales in all retail customer classes. The increase is
primarily attributable to a higher demand for air conditioning load during the
third quarter of 1995 compared to 1994. The Company's service territory
experienced a 14% increase in the number of cooling degree days during that
quarter, as compared to the third quarter of 1994. The Company has filed an
electric rate reduction request with the KCC (See Note 3).
<PAGE 15>

1994 Compared to 1993: Total operating revenues for 1994 of $619.9
million increased less than one percent from revenues of $617.0 million for
1993. The increase can be attributed to higher revenues in all retail
customer classes. While residential sales remained virtually unchanged,
commercial and industrial sales increased over two percent during 1994.
Partially offsetting these increases was a 21% decrease in wholesale and
interchange sales as a result of higher than normal sales in 1993 to other
utilities while their generating units were down due to the flooding of 1993.

OPERATING EXPENSES

1995 Compared to 1994: Total operating expenses for 1995 were $474.9
million compared to $470.9 million for 1994, an increase of less than one
percent. The increase is a result of increased depreciation and amortization
expense as a result of the amortization of the acquisition premium
attributable to the Merger which began in August 1995 as discussed in Merger
Implementation below.

The Company has filed a request with the KCC to increase the annual
depreciation expense for Wolf Creek Generating Station (See Note 3). The
Company anticipates its operating expenses (including fuel expenses) will
increase in 1996 as a result of Wolf Creek being taken out of service for
refueling and maintenance as discussed under "Fuel Mix" above.

1994 Compared to 1993: Total operating expenses for 1994 of $470.9
million increased slightly from total operating expenses of $469.6 million for
1993. Federal and state income taxes increased $13.5 million and maintenance
expense increased three percent primarily as a result of the major boiler
overhaul of the Company's coal fired La Cygne 1 generating station.

The increase in income tax expense was due to the completion at December
31, 1993, of the accelerated amortization of deferred income tax reserves
related to the allowance for borrowed funds used during construction
capitalized for Wolf Creek. The completion of the amortization of these
deferred income tax reserves increased income tax expense and thereby reduced
net income by approximately $12 million in 1994, and in the future will reduce
net income by this same amount each year.

Partially offsetting the increases in total operating expenses were lower
fuel costs, due to decreased electric generation during 1994, and lower other
operations expense.

OTHER INCOME AND DEDUCTIONS: Other income and deductions, net of taxes,
increased for the twelve months ended December 31, 1995 compared to 1994 as a
result of the additional interest expense on increased corporate-owned life
insurance (COLI) borrowings. Partially offsetting this increase was the
recognition of income from death benefit proceeds under COLI contracts during
the fourth quarter of 1995 (See Notes 1 and 7 for discussion of current
legislation affecting COLI).

Other income and deductions, net of taxes, decreased significantly in 1994
compared to 1993 primarily as a result of increased interest expense on higher
COLI borrowings. Interest on COLI borrowings increased $9.1 million in 1994
compared to 1993. Also contributing to the decrease was the receipt of death
benefit proceeds from COLI policies in the third quarter of 1993.
<PAGE 16>
INTEREST CHARGES: The Company's embedded cost of long-term debt was 7.3%
at December 31, 1995 and December 31, 1994 compared to 7.7% at December 31,
1993.

Interest charges decreased 12% in 1994 compared to 1993 primarily as a
result of the refinancing of higher cost fixed-rate debt. Also accounting for
the decrease was the impact of increased COLI borrowings which reduce the need
for other long-term debt and thereby reduced interest expense. COLI interest
is reflected in Other Income and Deductions on the Income Statement.

MERGER IMPLEMENTATION: In accordance with the KCC Merger order,
amortization of the acquisition adjustment commenced in August 1995. The
amortization will amount to approximately $20 million (pre-tax) per year for
40 years. Western Resources and the Company (combined companies) can recover
the amortization of the acquisition adjustment through cost savings under a
sharing mechanism approved by the KCC.

Based on the order issued by the KCC, with regard to the recovery of the
acquisition premium, the combined companies must achieve a level of savings on
an annual basis (considering sharing provisions) of approximately $27 million
in order to recover the entire acquisition premium. To the extent that the
combined companies actual operations and maintenance expense is lower than the
KCC-stipulated utility price index, the combined companies will realize merger
savings. Western Resources has calculated, in conformance with the KCC order,
annual savings associated with the acquisition to be in excess of $27 million
for 1995. As Western Resources' management presently expects to continue this
level of savings, the amount is expected to be sufficient to allow for the
full recovery of the acquisition premium.

OTHER INFORMATION

COMPETITION: As a regulated utility, the Company currently has limited
direct competition for retail electric service in its certified service area.
However, there is competition, based largely on price, from the generation, or
potential generation, of electricity by large commercial and industrial
customers, and independent power producers.

The 1992 Energy Policy Act (Act) requires increased efficiency of energy
usage and has effected the way electricity is marketed. The Act also provides
for increased competition in the wholesale electric market by permitting the
FERC to order third party access to utilities' transmission systems and by
liberalizing the rules for ownership of generating facilities. As part of the
Merger, the Company agreed to open access of its transmission system for
wholesale transactions. During 1995, wholesale revenues represented less than
five percent of the Company's total revenues.

TABLE OF CONTENTS PAGE

Report of Independent Public Accountants 19

Financial Statements:

Balance Sheets, December 31, 1995 and 1994 20
Statements of Income for the years ended
December 31, 1995, 1994 and 1993 21
Statements of Cash Flows for the years ended
December 31, 1995, 1994 and 1993 22
Statements of Taxes for the years ended
December 31, 1995, 1994 and 1993 23
Statements of Capitalization, December 31, 1995 and 1994 24
Statements of Common Stock Equity for the years ended
December 31, 1995, 1994 and 1993 25
Notes to Financial Statements 26

SCHEDULES OMITTED

The following schedules are omitted because of the absence of the
conditions under which they are required or the information is included
in the financial statements and schedules presented:

I, II, III, IV, and V.

<PAGE 19>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors of
Kansas Gas and Electric Company:

We have audited the accompanying balance sheets and statements of
capitalization of Kansas Gas and Electric Company (a wholly-owned subsidiary
of Western Resources, Inc.) as of December 31, 1995 and 1994, and the related
statements of income, cash flows, taxes, and common stock equity for each of
the three years in the period ended December 31, 1995. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Kansas Gas and Electric
Company as of December 31, 1995 and 1994, and the results of its operations
and its cash flows for each of the three years in the period ended December
31, 1995, in conformity with generally accepted accounting principles.

As explained in Note 7 to the financial statements, effective January 1, 1993,
the Company changed its method of accounting for postretirement benefits and
effective January 1, 1994, the Company changed its method of accounting for
postemployment benefits.

ARTHUR ANDERSEN LLP
Kansas City, Missouri,
January 26, 1996

<PAGE 20>
<TABLE>
KANSAS GAS AND ELECTRIC COMPANY
BALANCE SHEETS
(Dollars in Thousands)
<CAPTION>
December 31,
1995 1994
<S> <C> <C>
ASSETS

UTILITY PLANT:
Electric plant in service (Notes 1 and 11). . . . . . . . $3,427,928 $3,390,406
Less - Accumulated depreciation . . . . . . . . . . . . . 893,728 833,953
2,534,200 2,556,453
Construction work in progress . . . . . . . . . . . . . . 40,810 32,874
Nuclear fuel (net). . . . . . . . . . . . . . . . . . . . 53,942 39,890
Net utility plant . . . . . . . . . . . . . . . . . . . 2,628,952 2,629,217

OTHER PROPERTY AND INVESTMENTS:
Decommissioning trust (Note 2). . . . . . . . . . . . . . 25,070 16,944
Other . . . . . . . . . . . . . . . . . . . . . . . . . . 7,885 11,561
32,955 28,505

CURRENT ASSETS:
Cash and cash equivalents (Note 1). . . . . . . . . . . . 53 47
Accounts receivable and unbilled revenues (net)(Note 1) . 76,490 67,833
Advances to parent company (Note 13). . . . . . . . . . . 34,948 64,393
Fossil fuel, at average cost, . . . . . . . . . . . . . . 17,522 13,752
Materials and supplies, at average cost . . . . . . . . . 31,458 30,921
Prepayments and other current assets. . . . . . . . . . . 17,128 16,662
177,599 193,608

DEFERRED CHARGES AND OTHER ASSETS:
Deferred future income taxes (Note 8) . . . . . . . . . . 208,367 197,663
Deferred coal contract settlement costs (Note 3). . . . . 14,612 17,944
Phase-in revenues (Note 3). . . . . . . . . . . . . . . . 43,861 61,406
Other deferred plant costs. . . . . . . . . . . . . . . . 31,539 31,784
Corporate-owned life insurance (net) (Notes 1 and 7). . . 7,279 9,350
Unamortized debt expense. . . . . . . . . . . . . . . . . 25,605 27,777
Other . . . . . . . . . . . . . . . . . . . . . . . . . . 32,645 40,430
363,908 386,354

TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . $3,203,414 $3,237,684

CAPITALIZATION AND LIABILITIES

CAPITALIZATION (See Statements):
Common stock equity . . . . . . . . . . . . . . . . . . . $1,186,077 $1,225,204
Long-term debt (net). . . . . . . . . . . . . . . . . . . 684,082 699,992
1,870,159 1,925,196

CURRENT LIABILITIES:
Short-term debt (Note 4). . . . . . . . . . . . . . . . . 50,000 50,000
Long-term debt due within one year (Note 5) . . . . . . . 16,000 -
Accounts payable. . . . . . . . . . . . . . . . . . . . . 50,783 49,093
Accrued taxes . . . . . . . . . . . . . . . . . . . . . . 17,766 15,737
Accrued interest. . . . . . . . . . . . . . . . . . . . . 7,903 8,337
Other . . . . . . . . . . . . . . . . . . . . . . . . . . 6,608 11,160
149,060 134,327

DEFERRED CREDITS AND OTHER LIABILITIES:
Deferred income taxes (Note 8). . . . . . . . . . . . . . 800,934 784,043
Deferred investment tax credits (Note 8). . . . . . . . . 72,970 74,841
Deferred gain from sale-leaseback (Note 6). . . . . . . . 242,700 252,341
Other . . . . . . . . . . . . . . . . . . . . . . . . . . 67,591 66,936
1,184,195 1,178,161
COMMITMENTS AND CONTINGENCIES (Notes 2 and 9)
TOTAL CAPITALIZATION AND LIABILITIES . . . . . . . . . $3,203,414 $3,237,684

The NOTES TO FINANCIAL STATEMENTS are an integral part of these statements.
</TABLE>
<PAGE 21>
<TABLE>

KANSAS GAS AND ELECTRIC COMPANY
STATEMENTS OF INCOME
(Dollars in Thousands)
<CAPTION>

Year Ended December 31,
1995 1994 1993
<S> <C> <C> <C>
OPERATING REVENUES (Notes 1 and 3). . . . . . . . . . . $ 623,868 $ 619,880 $ 616,997

OPERATING EXPENSES:
Fuel used for generation:
Fossil fuel . . . . . . . . . . . . . . . . . . . . 80,592 90,383 93,388
Nuclear fuel. . . . . . . . . . . . . . . . . . . . 19,425 13,562 13,275
Power purchased . . . . . . . . . . . . . . . . . . . 4,577 7,144 9,864
Other operations. . . . . . . . . . . . . . . . . . . 117,876 115,060 118,948
Maintenance . . . . . . . . . . . . . . . . . . . . . 48,056 47,988 46,740
Depreciation and amortization . . . . . . . . . . . . 79,679 71,457 75,530
Amortization of phase-in revenues . . . . . . . . . . 17,545 17,544 17,545
Taxes (See Statements):
Federal income. . . . . . . . . . . . . . . . . . . 48,330 50,212 39,553
State income . . . . . . . . . . . . . . . . . . . 12,543 12,427 9,570
General . . . . . . . . . . . . . . . . . . . . . . 46,241 45,092 45,203
Total operating expenses. . . . . . . . . . . . . 474,864 470,869 469,616

OPERATING INCOME. . . . . . . . . . . . . . . . . . . . 149,004 149,011 147,381

OTHER INCOME AND DEDUCTIONS:
Corporate-owned life insurance (net). . . . . . . . . (2,668) (5,354) 7,841
Miscellaneous (net) . . . . . . . . . . . . . . . . . 4,884 5,079 9,271
Income taxes (net) (See Statements) . . . . . . . . . 9,086 7,290 2,227
Total other income and deductions . . . . . . . . 11,302 7,015 19,339

INCOME BEFORE INTEREST CHARGES. . . . . . . . . . . . . 160,306 156,026 166,720

INTEREST CHARGES:
Long-term debt. . . . . . . . . . . . . . . . . . . . 47,073 47,827 53,908
Other . . . . . . . . . . . . . . . . . . . . . . . . 5,190 5,183 6,075
Allowance for borrowed funds used
during construction (credit). . . . . . . . . . . . (2,830) (1,510) (1,366)
Total interest charges. . . . . . . . . . . . . . 49,433 51,500 58,617

NET INCOME. . . . . . . . . . . . . . . . . . . . . . . $ 110,873 $ 104,526 $ 108,103

The NOTES TO FINANCIAL STATEMENTS are an integral part of these statements.
</TABLE>
<PAGE 22>
<TABLE>
KANSAS GAS AND ELECTRIC COMPANY
STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
<CAPTION>

Year Ended December 31,
1995 1994 1993
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income. . . . . . . . . . . . . . . . . . . . . . . . $ 110,873 $ 104,526 $ 108,103
Depreciation and amortization . . . . . . . . . . . . . . 72,950 71,457 75,530
Other amortization (including nuclear fuel) . . . . . . . 15,193 10,905 11,254
Gain on sales of utility plant (net of tax) . . . . . . . (951) - -
Deferred taxes and investment tax credits (net) . . . . . 3,851 25,349 22,572
Amortization of phase-in revenues . . . . . . . . . . . . 17,545 17,544 17,545
Corporate-owned life insurance. . . . . . . . . . . . . . (28,548) (17,246) (21,650)
Amortization of gain from sale-leaseback. . . . . . . . . (9,640) (9,640) (9,640)
Amortization of acquisition adjustment. . . . . . . . . . 6,729 - -
Changes in working capital items:
Accounts receivable and unbilled
revenues (net) (Note 1) . . . . . . . . . . . . . . . (8,657) (56,721) (569)
Fossil fuel . . . . . . . . . . . . . . . . . . . . . . (3,770) (6,158) 8,507
Accounts payable. . . . . . . . . . . . . . . . . . . . 1,690 (2,002) (9,813)
Interest and taxes accrued. . . . . . . . . . . . . . . 967 4,508 (9,053)
Other . . . . . . . . . . . . . . . . . . . . . . . . . (1,980) (922) (2,191)
Changes in other assets and liabilities . . . . . . . . . 14,525 (11,181) (16,530)
Net cash flows from operating activities. . . . . . . 190,777 130,419 174,065

CASH FLOWS USED IN INVESTING ACTIVITIES:
Additions to utility plant. . . . . . . . . . . . . . . . 93,938 89,880 66,886
Sales of utility plant. . . . . . . . . . . . . . . . . . (1,723) - -
Corporate-owned life insurance policies . . . . . . . . . 30,347 26,418 27,268
Death proceeds of corporate-owned life insurance. . . . . (10,583) - (10,160)
Net cash flows used in investing activities . . . . . 111,979 116,298 83,994

CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term debt (net) . . . . . . . . . . . . . . . . . . - (105,800) 62,300
Advances to parent company (net). . . . . . . . . . . . . 29,445 128,399 (118,503)
Bonds issued. . . . . . . . . . . . . . . . . . . . . . . - 160,422 65,000
Bonds retired . . . . . . . . . . . . . . . . . . . . . . (25) (46,440) (140,000)
Other long-term debt issued . . . . . . . . . . . . . . . - - 70,999
Other long-term debt retired. . . . . . . . . . . . . . . - (67,893) (63,956)
Borrowings against life insurance policies. . . . . . . . 47,046 42,175 184,550
Repayment of borrowings against life insurance policies . (5,258) - (1,290)
Revolving credit agreement (net). . . . . . . . . . . . . - - (150,000)
Dividends to parent company . . . . . . . . . . . . . . . (150,000) (125,000) -
Net cash flows from (used in) financing activities . . (78,792) (14,137) (90,900)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS. . . . 6 (16) (829)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD. . . . . . 47 63 892

CASH AND CASH EQUIVALENTS AT END OF PERIOD. . . . . . . . . $ 53 $ 47 $ 63

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
CASH PAID FOR:
Interest on financing activities (net of amount
capitalized) . . . . . . . . . . . . . . . . . . . . $ 71,808 $ 68,544 $ 77,653
Income taxes . . . . . . . . . . . . . . . . . . . . . . 42,100 28,509 29,354

The NOTES TO FINANCIAL STATEMENTS are an integral part of these statements.
</TABLE>
<PAGE 23>
<TABLE>
KANSAS GAS AND ELECTRIC COMPANY
STATEMENTS OF TAXES
(Dollars in Thousands)
<CAPTION>

Year Ended December 31,
1995 1994 1993
<S> <C> <C> <C>
FEDERAL INCOME TAXES:
Payable currently . . . . . . . . . . . . . . . . . $ 34,661 $ 24,427 $ 19,220
Deferred (net). . . . . . . . . . . . . . . . . . . 9,528 23,002 16,691
Investment tax credit-Deferral. . . . . . . . . . . - - 4,900
-Amortization. . . . . . . . . (3,314) (3,208) (3,114)
Total Federal income taxes . . . . . . . . . . . 40,875 44,221 37,697
Less:
Federal income taxes applicable
to non-operating items . . . . . . . . . . . . . (7,455) (5,991) (1,856)
Total Federal income taxes charged to operations. . 48.330 50,212 39,553

STATE INCOME TAXES:
Payable currently . . . . . . . . . . . . . . . . . 13,275 5,574 5,104
Deferred (net). . . . . . . . . . . . . . . . . . . (2,363) 5,554 4,095
Total State income taxes . . . . . . . . . . . . 10,912 11,128 9,199
Less:
State income taxes applicable
to non-operating items . . . . . . . . . . . . . (1,631) (1,299) (371)
Total State income taxes charged to operations. . . 12.543 12,427 9,570

GENERAL TAXES:
Property. . . . . . . . . . . . . . . . . . . . . . 40,827 40,104 38,432
Payroll and other taxes . . . . . . . . . . . . . . 5,414 4,988 6,771
Total general taxes charged to operations. . . . 46.241 45,092 45,203

TOTAL TAXES CHARGED TO OPERATIONS . . . . . . . . . . $ 107.114 $ 107,731 $ 94,326

The effective income tax rates set forth below are computed by dividing total Federal and State
income taxes by the sum of such taxes and net income. The difference between the effective rates
and the Federal statutory income tax rates are as follows:

Year Ended December 31, 1995 1994 1993

EFFECTIVE INCOME TAX RATE . . . . . . . . . . . . . . 32% 35% 30%

Effect of:
State income taxes. . . . . . . . . . . . . . . . . (4) (5) (4)
Amortization of investment tax credits. . . . . . . 2 2 2
Corporate-owned life insurance. . . . . . . . . . . 5 4 5
Flow through and amortization, net. . . . . . . . . - (1) 5
Other differences . . . . . . . . . . . . . . . . . - - (3)

STATUTORY FEDERAL INCOME TAX RATE . . . . . . . . . . 35% 35% 35%

The NOTES TO FINANCIAL STATEMENTS are an integral part of these statements.
</TABLE>
<PAGE 24>
<TABLE>
KANSAS GAS AND ELECTRIC COMPANY
STATEMENTS OF CAPITALIZATION
(Dollars in Thousands)
<CAPTION>

December 31,
1995 1994
<S> <C> <C>
COMMON STOCK EQUITY (See Statements):

Common stock, without par value, authorized and issued
1,000 shares. . . . . . . . . . . . . . . . . . . . . . . $1,065,634 $1,065,634
Retained earnings . . . . . . . . . . . . . . . . . . . . . 120,443 159,570
Total common stock equity . . . . . . . . . . . . . . . . 1,186,077 63% 1,225,204 64%
</TABLE>
<TABLE>
LONG-TERM DEBT (Note 5):
First Mortgage Bonds:
<S> <C> <C> <C> <C> <C>
Series Due 1995 1994
5-5/8% 1996 $ 16,000 $ 16,000
7.6% 2003 135,000 135,000
6-1/2% 2005 65,000 65,000
6.20% 2006 100,000 100,000
316,000 316,000
Pollution Control Bonds:
5.10% 2023 13,957 13,982
Variable (1) 2027 21,940 21,940
7.0% 2031 327,500 327,500
Variable (2) 2032 14,500 14,500
Variable (3) 2032 10,000 10,000
387,897 387,922
Total bonds. . . . . . . . . . . . . . . . . . . . . . 703,897 703,922

Less:
Unamortized premium and discount (net). . . . . . . . . . 3,815 3,930
Long-term debt due within one year. . . . . . . . . . . . 16,000 -
Total long-term debt . . . . . . . . . . . . . . . . . 684,082 37% 699,992 36%

TOTAL CAPITALIZATION. . . . . . . . . . . . . . . . . . . . . $1,870,159 100% $1,925,196 100%

Market-Adjusted Tax Exempt Securities (MATES). The interest rate is reset
periodically via an auction process. Rates at December 31, 1995: (1) 4.00%,
(2) 3.925%, and (3) 4.00%.

The NOTES TO FINANCIAL STATEMENTS are an integral part of these statements.
</TABLE>
<PAGE 25>
<TABLE> KANSAS GAS AND ELECTRIC COMPANY
STATEMENTS OF COMMON STOCK EQUITY
(Dollars in Thousands)
<CAPTION>

Common Retained
Stock Earnings
<S> <C> <C>
BALANCE DECEMBER 31, 1992, 1,000 shares. . . . . . . $1,065,634 $ 71,941

Net income . . . . . . . . . . . . . . . . . . . . . 108,103

BALANCE DECEMBER 31, 1993, 1,000 shares. . . . . . . 1,065,634 180,044

Net income . . . . . . . . . . . . . . . . . . . . . 104,526
Dividend to parent company . . . . . . . . . . . . . (125,000)

BALANCE DECEMBER 31, 1994, 1,000 shares. . . . . . . 1,065,634 159,570

Net Income . . . . . . . . . . . . . . . . . . . . . 110,873

Dividend to parent company . . . . . . . . . . . . . (150,000)

Balance December 30, 1995, 1,000 shares. . . . . . . $1,065,634 $ 120,443

The NOTES TO FINANCIAL STATEMENTS are an integral part of these statements.
</TABLE>
<PAGE 26>
KANSAS GAS AND ELECTRIC COMPANY
NOTES TO FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General: Kansas Gas and Electric Company (the Company, KGE) is a
rate-regulated electric utility and wholly-owned subsidiary of Western
Resources, Inc. (Western Resources). The Company is engaged principally in
the production, purchase, transmission, distribution, and sale of electricity.
The Company serves approximately 275,000 electric customers in southeastern
Kansas.

The Company owns 47% of Wolf Creek Nuclear Operating Corporation
(WCNOC), the operating company for Wolf Creek Generating Station (Wolf Creek).
The Company records its proportionate share of all transactions of WCNOC as it
does other jointly-owned facilities.

The Company follows the accounting for regulated enterprises prescribed
by Statement of Financial Accounting Standards No. 71 "Accounting for the
Effects of Certain Types of Regulations" (SFAS 71). This pronouncement
requires deferral of certain costs and obligations based upon approvals
received from regulators to permit recovery or require refund of these costs
and revenues in future periods. Consequently, the recorded net book value of
certain assets and liabilities may be different than that which would
otherwise be recorded by unregulated enterprises. On a continuing basis, the
Company reviews the continued applicability of SFAS 71 based on the current
regulatory and competitive environment. Although recent developments suggest
the electric generation industry may become more competitive, the degree to
which regulatory oversight of the Company will be lifted and competition will
be permitted is uncertain. Currently, there are no proceedings or actions at
the KCC to open the Company's electric markets to greater competition. As a
result, the Company continues to believe that accounting under SFAS 71 is
appropriate. If the Company were to determine that the use of SFAS 71 were no
longer appropriate, it would be required to write-off the deferred costs and
obligations that represent regulatory assets and liabilities referred to
above. It may also be necessary for the Company to reduce the carrying value
of a portion of its plant and equipment to the extent that it is expected to
become impaired. At this time, it is not possible to estimate the amount of
the Company's plant and equipment, if any, that would be considered
unrecoverable in such circumstances, as the effect of any future competition
on the Company's rates is not clear at this time.
<PAGE 27>

Utility Plant: Utility plant (including plant acquisition adjustment) is
stated at cost. For constructed plant, cost includes contracted services,
direct labor and materials, indirect charges for engineering, supervision,
general and administrative costs, and an allowance for funds used during
construction (AFUDC). The AFUDC rate was 6.39% for 1995, 4.07% for 1994, and
4.41% for 1993. The cost of additions to utility plant and replacement units
of property is capitalized. Maintenance costs and replacement of minor items
of property are charged to expense as incurred. When units of depreciable
property are retired, they are removed from the plant accounts and the
original cost plus removal charges less salvage are charged to accumulated
depreciation.

Depreciation: Depreciation is provided on the straight-line method based
on estimated useful lives of property. Composite provisions for book
depreciation approximated 2.72% during 1995, 2.7% during 1994, and 2.9% during
1993 of the average original cost of depreciable property. The methods and
rates of depreciation used by the Company have not varied materially from the
methods and rates which would have been used if the Company were not regulated
and not subject to the provisions prescribed by SFAS 71. In the past, the
methods and rates have been determined by depreciation studies and approved by
the various regulatory bodies. The Company periodically evaluates its
depreciation rates considering the past and expected future experience in the
operation of its facilities. The Company has proposed to more rapidly recover
the Company's investment in nuclear generating assets of Wolf Creek to reduce
the capital costs to a level more closely paralleling that of non-nuclear
generating facilities
(For information regarding such proposal, See Note 3).

Cash and Cash Equivalents: For purposes of the Statements of Cash Flows,
the Company considers highly liquid collateralized debt instruments purchased
with a maturity of three months or less to be cash equivalents.

Income Taxes: The Company accounts for income taxes in accordance with
the provisions of Statement of Financial Accounting Standards No. 109
"Accounting for Income Taxes" (SFAS 109). Under SFAS 109, deferred tax assets
and liabilities are recognized based on temporary differences in amounts
recorded for financial reporting purposes and their respective tax bases (See
Note 8).

<PAGE 28>
Investment tax credits previously deferred are being amortized to income
over the life of the property which gave rise to the credits.

Revenues: Operating revenues include amounts actually billed for
services rendered and an accrual of estimated unbilled revenues. Unbilled
revenues represent the estimated amount customers will be billed for service
provided from the time meters were last read to the end of the accounting
period. Unbilled revenues of $21.8 million and $21.4 million are recorded as
a component of accounts receivable and unbilled revenue (net) on the balance
sheets as of December 31, 1995 and 1994, respectively.

The Company's recorded reserves for doubtful accounts receivable totaled
$3.3 million and $1.9 million at December 31, 1995 and 1994, respectively.

Debt Issuance and Reacquisition Expense: Debt premium, discount and
issuance expenses are amortized over the life of each issue. Under regulatory
procedures, debt reacquisition expenses are amortized over the remaining life
of the reacquired debt or, if refinanced, the life of the new debt.

Cash Surrender Value of Life Insurance Contracts: The following amounts
related to corporate-owned life insurance contracts (COLI) are recorded in
Corporate-owned Life Insurance (net) on the balance sheets:

1995 1994
(Dollars in Millions)
Cash surrender value of contracts. . . $360.3 $320.6
Borrowings against contracts . . . . . (353.0) (311.2)
COLI (net) . . . . . . . . . . . . $ 7.3 $ 9.4

Income is recorded for increases in cash surrender value and net death
proceeds. Interest expense is recognized for COLI borrowings. The net income
generated from COLI contracts, including the tax benefit of the interest
deductions and premium expenses, are recorded as Corporate-owned Life
Insurance (net) on the Statements of Income. The income from increases in
cash surrender value and net death proceeds was $22.7 million for 1995, $15.6
million for 1994, and $19.7 million for 1993. The interest expense deduction
taken was $25.4 million for 1995, $21.0 million for 1994, and $11.9 million
for 1993.

Reclassifications: Certain amounts in prior years have been reclassified
to conform with classifications used in the current year presentation.
<PAGE 29>

2. COMMITMENTS AND CONTINGENCIES

Manufactured Gas Sites: The Company has been associated with three
former manufactured gas sites which may contain coal tar and other potentially
harmful materials. The Company and the Kansas Department of Health and
Environment (KDHE) entered into a consent agreement governing all future work
at the three sites. The terms of the consent agreement will allow the Company
to investigate these sites and set remediation priorities based upon the
results of the investigations and risk analysis. The prioritized sites will
be investigated over a 10 year period. The agreement will allow the Company
to set mutual objectives with the KDHE in order to expedite effective response
activities and to control costs and environmental impact. The costs incurred
for site investigation and risk assessment in 1995 and 1994 were minimal. The
Company is aware of other Midwestern utilities which have incurred remediation
costs ranging between $500,000 and $10 million per site. The KCC has
permitted another Kansas utility to recover its remediation costs through
rates. To the extent that such remediation costs are not recovered through
rates, the costs could be material to the Company's financial position or
results of operations depending on the degree of remediation and number of
years over which the remediation must be completed.

The staff of the SEC has questioned certain current accounting practices
used by nuclear electric generating station owners regarding the recognition,
measurement and classification of decommissioning costs for nuclear electric
generating stations. In response to these questions, the FASB is expected to
issue new accounting standards for removal costs, including decommissioning in
1996. If current electric utility industry accounting practices for such
decommissioning costs are changed: (1) annual decommissioning expenses could
increase, (2) the estimated present value of decommissioning costs could be
<PAGE 30>
recorded as a liability rather than as accumulated depreciation, and (3) trust
fund income from the external decommissioning trusts could be reported as
investment income rather than as a reduction to decommissioning expense.
When revised accounting guidance is issued, the Company will also have to
evaluate its effect on accounting for removal costs of other long-lived
assets. At this time, the Company is not able to predict what effect such
changes would have on results of operations, financial position, or related
regulatory practices until the final issuance of revised accounting guidance.

The Company carries premature decommissioning insurance which has several
restrictions. One of these is that it can only be used if Wolf Creek incurs
an accident exceeding $500 million in expenses to safely stabilize the
reactor, to decontaminate the reactor and reactor station site in accordance
with a plan approved by the Nuclear Regulatory Commission (NRC), and to pay
for on-site property damages. This decommissioning insurance will only be
available if the insurance funds are not needed to implement the NRC-approved
plan for stabilization and decontamination.

Although the Company maintains various insurance policies to provide
coverage for potential losses and liabilities resulting from an accident or
an extended outage, the Company's insurance coverage may not be adequate to
cover the costs that could result from a catastrophic accident or extended
outage at Wolf Creek. Any substantial losses not covered by insurance, to the
extent not recoverable through rates, would have a material adverse effect on
the Company's financial condition and results of operations.
<PAGE 31>
Clean Air Act: The Clean Air Act Amendments of 1990 (the Act) require a
two-phase reduction in certain emissions. To meet the monitoring and
reporting requirements under the acid rain program, the Company installed
continuous monitoring and reporting equipment at a total cost of approximately
$2.3 million from 1993 through 1995. The Company does not expect additional
equipment acquisitions or other material expenditures to be needed to meet
Phase II sulfur dioxide requirements.

Fuel Commitments: To supply a portion of the fuel requirements for its
generating plants, the Company has entered into various commitments to obtain
nuclear fuel and coal. Some of these contracts contain provisions for price
escalation and minimum purchase commitments. At December 31, 1995, WCNOC's
nuclear fuel commitments (Company's share) were approximately $15.3 million
for uranium concentrates expiring at various times through 2001, $120.8
million for enrichment expiring at various times through 2014, and $72.7
million for fabrication through 2025. At December 31, 1995, the Company's
coal contract commitments in 1995 dollars under the remaining terms of the
contracts were approximately $643 million. The largest coal contract expires
in 2020, with the remaining coal contracts expiring at various times through
2013.

Energy Act: As part of the 1992 Energy Policy Act, a special assessment
is being collected from utilities for a uranium enrichment decontamination and
decommissioning fund. The Company's portion of the assessment for Wolf Creek
is approximately $7 million, payable over 15 years. Management expects such
costs to be recovered through the ratemaking process.

3. RATE MATTERS AND REGULATION

KCC Rate Proceedings: On August 17, 1995, the Company filed with the KCC
a request to more rapidly recover its investment in its assets of Wolf Creek
over the next seven years. If the request is granted, depreciation expense
for Wolf Creek will increase by approximately $50 million for each of the next
seven years. As a result of this proposal, the Company will also seek to
reduce electric rates for its customers by approximately $9 million annually
for the same seven year period.

The request also reduces the annual depreciation by approximately $3
million for electric transmission, distribution and certain generating plant
assets to reflect the effect of increasing useful lives of these properties.
Hearings before the KCC on the depreciation changes and voluntary rate
reductions are expected to occur in May 1996.

Rate Stabilization Plan: In 1988, the KCC ordered the accrual of
phase-in revenues to be discontinued effective December 31, 1988. The Company
began amortizing the phase-in revenue asset on a straight-line basis over
9-1/2 years beginning January 1, 1989. At December 31, 1995, approximately
$44 million of deferred phase-in revenues remain to be recovered.

Coal Contract Settlements: In March 1990, the KCC issued an order
allowing the Company to defer its share of a 1989 coal contract settlement
with the Pittsburg and Midway Coal Mining Company amounting to $22.5 million.
This amount was recorded as a deferred charge and is included in Deferred
<PAGE 32>
Charges and Other Assets on the balance sheet. The settlement resulted in the
termination of a long-term coal contract. The KCC permitted the Company to
recover this settlement as follows: 76% of the settlement plus a return over
the remaining term of the terminated contract (through 2002) and 24% to be
amortized to expense with a deferred return equivalent to the carrying cost of
the asset. Approximately $15 million of this deferral remains on the balance
sheet at December 31, 1995.

In February 1991, the Company paid $8.5 million to settle a coal contract
lawsuit with AMAX Coal Company and recorded the payment as a deferred charge
in Deferred Charges and Other Assets on the balance sheet. The KCC approved
the recovery of the settlement plus a return equivalent to the carrying cost
of the asset, over the remaining term of the terminated contract (through
1996).

4. SHORT-TERM BORROWINGS

The Company's short-term financing requirements are satisfied through
short-term bank loans and uncommitted loan participation agreements. Maximum
short-term borrowings outstanding during 1995 and 1994 were $75.8 million on
January 17, 1995 and $172.3 million on January 4, 1994. The weighted average
interest rates, including fees, were 6.1% for 1995, 4.5% for 1994, and 3.5%
for 1993.

5. LONG-TERM DEBT

The amount of KGE's first mortgage bonds authorized by the KGE Mortgage
and Deed of Trust (Mortgage) dated April 1, 1940, as supplemented, is limited
to a maximum of $2 billion. Amounts of additional bonds which may be issued
are subject to property, earnings, and certain restrictive provisions of the
Mortgage. Electric plant is subject to the lien of the Mortgage except for
transportation equipment.
Debt discount and expenses are being amortized over the remaining lives
of each issue. The improvement and maintenance fund requirements for certain
first mortgage bond series can be met by bonding additional property. With the
retirement of certain Company pollution control series bonds, there are no
longer any bond sinking fund requirements. During 1996, $16 million of bonds
will mature.

6. SALE-LEASEBACK OF LA CYGNE 2

In 1987, the Company sold and leased back its 50% undivided interest in
the La Cygne 2 generating unit. The La Cygne 2 lease has an initial term of
29 years, with various options to renew the lease or repurchase the 50%
undivided interest. The Company remains responsible for its share of
operation and maintenance costs and other related operating costs of La Cygne
2. The lease is an operating lease for financial reporting purposes.

As permitted under the La Cygne 2 lease agreement, the Company in 1992
requested the Trustee Lessor to refinance $341.1 million of secured facility
bonds of the Trustee and owner of La Cygne 2. The transaction was requested
to reduce recurring future net lease expense. In connection with the
<PAGE 33>
refinancing on September 29, 1992, a one-time payment of approximately $27
million was made by the Company which has been deferred and is being amortized
over the remaining life of the lease and included in operating expense as part
of the future lease expense. At December 31, 1995, approximately $23.7
million of this deferral remained on the balance sheet.

Future minimum annual lease payments required under the La Cygne 2 lease
agreement are approximately $34.6 million for each year through 2000 and $646
million over the remainder of the lease.

The gain of approximately $322 million realized at the date of the sale
of La Cygne 2 has been deferred for financial reporting purposes, and is being
amortized ($9.6 million per year) over the initial lease term in proportion to
the related lease expense. The Company's lease expense, net of amortization
of the deferred gain and a one-time payment, was approximately $22.5 million
for 1995, 1994, and 1993.

7. EMPLOYEE BENEFIT PLANS

Pension: In 1995, the Company's qualified noncontributory defined benefit
pension plan was merged into Western Resources, Inc. Retirement Plan (the
Plan). The Plan covers substantially all employees of the Company. Pension
benefits under the Plan are based on years of service and the employee's
compensation during the five highest paid consecutive years out of ten before
retirement. Western Resources' policy is to fund pension costs accrued,
subject to limitations set by the Employee Retirement Income Security Act of
1974 and the Internal Revenue Code. Pension expense of $1.6 million was
allocated to the Company by Western Resources in 1995. Also, substantially
all Wolf Creek employees are covered under a plan similar to the Plan.

The following table provides information on the components of pension
cost under Statement of Financial Accounting Standards No. 87 "Employers'
Accounting for Pension Plans" (SFAS 87), funded status and actuarial
assumptions for the Company:

1995(1) 1994 1993
(Dollars in Millions)

SFAS 87 Expense:
Service cost. . . . . . . . . . . . . . $ 1.2 $ 3.7 $ 3.2
Interest cost on projected
benefit obligation. . . . . . . . . . 1.0 9.7 9.5
(Gain) loss on plan assets. . . . . . . (1.7) 2.1 (14.1)
Net amortization and deferral . . . . . 1.1 (11.4) 4.9
Net expense . . . . . . . . . . . . . $ 1.6 $ 4.1 $ 3.5

<PAGE 34>
The following table sets forth the plans' actuarial present value and
funded status at November 30, 1995 and 1994 (the plan years) and a
reconciliation of such status to the December 31, 1995, 1994, and 1993
financial statements:

1995(1) 1994 1993
(Dollars in Millions)
Reconciliation of Funded Status:
Actuarial present value of
benefit obligations:
Vested. . . . . . . . . . . . . . . $ 7.3 $ 94.0 $ 95.2
Non-vested. . . . . . . . . . . . . 1.9 6.3 6.1
Total . . . . . . . . . . . . . . $ 9.2 $100.3 $101.3

Plan assets at November 30 (principally
debt and equity securities)
at fair value . . . . . . . . . . . . . $ 8.8 $115.4 $119.9
Projected benefit obligation
at November 30 . . . . . . . . . . . . (17.8) (125.4) (125.5)
Funded status at November 30. . . . . . . (9.0) (10.0) (5.6)
Unrecognized transition asset . . . . . . 0.9 (1.5) (1.7)
Unrecognized prior service costs. . . . . 0.4 9.6 12.4
Unrecognized net gain . . . . . . . . . . (0.4) (11.1) (20.6)
Accrued pension costs at December 31. . . $ (8.1) $(13.0) $(15.5)

Year Ended December 31, 1995 1994 1993
Actuarial Assumptions:
Discount rate . . . . . . . . . . 7.5 % 8.0-8.5 % 7.0-7.75%
Annual salary increase rate . . . (2) 5.0 % 5.0 %
Long-term rate of return. . . . . 8.5 % 8.0-8.5 % 8.0-8.5 %

(1) 1995 includes only the Company's 47% share of the Wolf Creek Plan.
(2) Graded based on age: 6.5% at age 20 graded to 4.5% at age 60.

Postretirement: Western Resources and the Company adopted the provisions
of Statement of Financial Accounting Standards No. 106 "Employers' Accounting
for Postretirement Benefits Other Than Pensions" (SFAS 106) in the first
quarter of 1993. This statement requires the accrual of postretirement
benefits other than pensions, primarily medical benefits costs, during the
years an employee provides service.

The Company's total obligation is recorded by Western Resources, and the
related postretirement benefits expenses are allocated to the Company. The
total postretirement benefits expenses allocated to the Company by Western
Resources under SFAS 106 were approximately $3.7 million in 1995 and $3.8
million in 1994.

The KCC issued an order permitting Western Resources to defer the initial
SFAS 106 expense. To mitigate the impact incremental SFAS 106 expense will
have on rate increases, Western Resources will include in future computations
of cost of service the actual postretirement benefits expenses and an income
stream generated from COLI contracts purchased in 1993 and 1992. To the
extent postretirement benefits expenses exceed income from the COLI program,
this excess is being deferred (in accordance with the provisions of the FASB
Emerging Issues
<PAGE 35>
Task Force Issue No. 92-12) and will be offset by income generated through the
deferral period by the COLI program. Because these expenses were deferred by
Western Resources, the Company's results of continuing operations are not
affected.

At December 31, 1995, approximately $7.0 million related to the Company's
portion of postretirement expenses had been deferred by Western Resources
pursuant to the KCC order. Pending federal legislation may substantially
reduce or eliminate tax benefits associated with COLI contracts. If this
legislation is enacted or should the income stream generated by the COLI
program not be sufficient to offset postretirement benefit costs on an accrual
basis, the KCC order allows Western Resources and the Company to seek recovery
of a deficiency through the ratemaking process. Regulatory precedents
established by the KCC generally permit the accrual costs of postretirement
benefits to be recovered in rates.

The Company also records, based on actuarial projections, the
postretirement benefit expenses related to its 47% ownership in Wolf Creek,
which approximated $0.3 million and $0.4 million for 1995 and 1994,
respectively.

The following table summarizes the status of the Company's postretirement
plan for financial statement purposes and the related amounts included in the
balance sheet:
<TABLE>
December 31, 1995(2) 1994 1993
(Dollars in Millions)
<S> <C> <C> <C>
Reconciliation of Funded Status:
Actuarial present value of postretirement
benefit obligations:
Retirees. . . . . . . . . . . . . . . . . . . $ (1.7) $(12.9) $(12.4)
Active employees fully eligible . . . . . . . - ( 3.0) ( 2.5)
Active employees not fully eligible . . . . . (1.0) ( 9.4) ( 9.0)
Funded status. . . . . . . . . . . . . . . . (2.7) (25.3) (23.9)
Unrecognized prior service cost . . . . . . . - 3.2 .1
Unrecognized transition obligation. . . . . . 0.7 19.3 20.4
Unrecognized net (gain) loss. . . . . . . . . 0.9 (.9) 1.7
Accrued postretirement benefit costs. . . . . . . $ (1.1) $ (3.7) $ (1.7)

Year Ended December 31, 1995 1994 1993
Assumptions:
Discount rate. . . . . . . . . . . . . . . . . 7.5 % 8.0-8.5 % 7.75%
Annual compensation increase rate. . . . . . . 4.75% 5.0 % 5.0 %
Expected rate of return. . . . . . . . . . . . 9.0 % 8.5 % 8.5 %

(2) 1995 includes only the Company's 47% share of the Wolf Creek Plan.

For measurement purposes, an annual health care cost growth rate of 10.5%
was assumed for 1995, decreasing to six percent in 1997. The health care cost
trend rate has a significant effect on the projected benefit obligation.
Increasing the trend rate by one percent each year would increase the present
value of the accumulated projected benefit obligation by $1.4 million and the
aggregate of the service and interest cost components by $0.2 million.

Postemployment: Western Resources and the Company adopted the provisions
of Statement of Financial Accounting Standards No. 112 "Employers' Accounting
for Postemployment Benefits" (SFAS 112) in the first quarter of 1994. This
<PAGE 36>
statement requires the recognition of the liability to provide postemployment
benefits when the liability has been incurred. Due to the immaterial amounts
and the rate treatment from the Company's regulators, there was no material
impact upon the Company's continuing operations.

The Company's total obligation is recorded by Western Resources, and the
related postemployment benefits expenses are allocated to the Company. The
total postemployment benefits expenses allocated to the Company by Western
Resources under SFAS 112 were approximately $0.9 million in 1995 and $0.8
million in 1994, respectively.

The KCC issued an order permitting Western Resources to defer the initial
SFAS 112 expense. At December 31, 1995, approximately $1.9 million related to
the Company's portion of postemployment expenses had been deferred pursuant to
the KCC order.

Savings: Effective January 1, 1995, the Company's 401(k) savings plan
was merged with Western Resources savings plan. Western Resources maintains a
savings plan in which substantially all employees participate. Prior to the
merger of the savings plans, funds of the plans were deposited with a trustee
and invested at each employee's option in one or more investment funds,
including a Western Resources common stock fund. The Company's contributions
were $1.8 million for 1994 and $2.0 million for 1993. In 1995, 401(k)
contribution expense allocated to the Company was $1.7 million.

8. INCOME TAXES

Under SFAS 109, temporary differences gave rise to deferred tax assets
and deferred tax liabilities at December 31, 1995 and 1994, respectively, as
follows:
Deferred Tax Assets: 1995 1994
(Dollars in Thousands)

Deferred gain on sale-leaseback. . . . . $ 105,007 $ 110,556
Alternative Minimum tax carry forwards . 18,740 41,163
Other. . . . . . . . . . . . . . . . . . 10,870 11,253
Total Deferred Tax Assets. . . . . . . $ 134,617 $ 162,972
Deferred Tax Liabilities:
Accelerated Depreciation & Other . . . . $ 375,079 $ 381,800
Acquisition Premium. . . . . . . . . . . 314,933 317,610
Deferred Future Income Taxes . . . . . . 208,367 197,663
Other. . . . . . . . . . . . . . . . . . 37,172 49,942
Total Deferred Tax Liabilities . . . . $ 935,551 $ 947,015

Accumulated Deferred
Income Taxes, Net $ 800,934 $ 784,043

In accordance with various rate orders received from the KCC, the Company
has not yet collected through rates the amounts necessary to pay a significant
portion of the net deferred income tax liabilities. As management believes it
is probable that the net future increases in income taxes payable will be
recovered from customers, it has recorded a deferred asset for these amounts.
These assets are also a temporary difference for which deferred income tax
liabilities have been provided.
<PAGE 37>
At December 31, 1995, the Company has alternative minimum tax credits
generated prior to April 1, 1992, which carry forward without expiration, of
$18.7 million which may be used to offset future regular tax to the extent the
regular tax exceeds the alternative minimum tax. These credits have been
applied in determining the Company's net deferred income tax liability and
corresponding deferred future income taxes at December 31, 1995.

9. LEGAL PROCEEDINGS

The Company is involved in various legal and environmental proceedings.
Management believes that adequate provision has been made within the financial
statements for these matters and accordingly believes their ultimate
dispositions will not have a material adverse effect upon the financial
position or results of operations of the Company.

10. FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair
value of each class of financial instruments for which it is practicable to
estimate that value as set forth in Statement of Financial Accounting
Standards No. 107 "Disclosures About Fair Value of Financial Instruments":

The estimated fair values of the Company's financial instruments are as
follows:

Carrying Value Fair Value
December 31, 1995 1994 1995 1994
(Dollars in Thousands)

Cash and cash
equivalents. . . . . . . $ 53 $ 47 $ 53 $ 47
Decommissioning trust. . . 25,070 16,944 25,070 16,633
Variable-rate debt . . . . 449,433 407,645 449,433 407,645
Fixed-rate debt. . . . . . 657,457 657,482 675,471 623,331

<PAGE 38>
11. JOINT OWNERSHIP OF UTILITY PLANTS

Company's Ownership at December 31, 1995
In-Service Invest- Accumulated Net Per-
Dates ment Depreciation (MW) cent
(Dollars in Thousands)

La Cygne 1 (a) Jun 1973 $ 155,566 $ 99,133 341 50
Jeffrey 1 (b) Jul 1978 67,322 28,312 140 20
Jeffrey 2 (b) May 1980 68,151 26,951 147 20
Jeffrey 3 (b) May 1983 96,031 36,333 141 20
Wolf Creek (c) Sep 1985 1,371,878 335,941 548 47

(a) Jointly owned with Kansas City Power & Light Company (KCPL)
(b) Jointly owned with Western Resources and UtiliCorp United Inc.
(c) Jointly owned with KCPL and Kansas Electric Power Cooperative, Inc.

Amounts and capacity represent the Company's share. The Company's share
of operating expenses of the plants in service above, as well as such expenses
for a 50% undivided interest in La Cygne 2 (representing 335 MW capacity) sold
and leased back to the Company in 1987, are included in operating expenses on
the Statements of Income. The Company's share of other transactions
associated with the plants is included in the appropriate classification in
the Company's financial statements.

12. QUARTERLY FINANCIAL STATISTICS (Unaudited)

1995
4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr.
(Dollars in Thousands)
Operating revenues. . . . . $138,182 $202,382 $144,747 $138,557
Operating income. . . . . . 25,974 63,684 30,779 28,567
Net income. . . . . . . . . 21,598 51,836 19,567 17,872

1994
4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr.
(Dollars in Thousands)
Operating revenues. . . . . $139,087 $189,202 $154,987 $136,604
Operating income. . . . . . 33,607 56,978 33,548 24,878
Net income. . . . . . . . . 22,212 45,481 23,623 13,210

<PAGE 39>
13. RELATED PARTY TRANSACTIONS

The cash management function, including cash receipts and disbursements,
for KGE is performed by Western Resources. An intercompany account is used to
record net receipts and dusbursements handled by Western Resources. The net
amount advanced by KGE to Western Resources approximated $35 million and $64
million at December 31, 1995 and 1994, respectively. These amounts are
recorded as advances to parent company in Current Assets on the balance sheet.

Certain operating expenses have been allocated to the Company from
Western Resources. These expenses are allocated, depending on the nature of
the expense, based on allocation studies, net investment, number of customers,
and/or other appropriate allocators. Management believes such allocation
procedures are reasonable. During 1995, the Company declared a dividend to
Western Resources of $150 million.

<PAGE 40>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

There were no disagreements with accountants on accounting and financial
disclosure.

<PAGE 41>
PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Western Resources, Inc. owns 100% of the Company's outstanding common
stock.

A Director
Business Experience Since 1990 and Other Continuously
Name Age Directorships Other Than The Company Since

William B. 43 Chairman of the Board and President 1995
Moore (since June 1995), and prior to that
Vice President, Finance, Western
Resources, Inc.

Robert T. 70 Owner, Crain Realty, Co., Fort Scott, 1992(b)
Crain Kansas
(a) Directorships
Citizens National Bank
Ft. Scott Industries, Inc.

Anderson E. 62 President, Jackson Mortuary, Wichita, 1994
Jackson Kansas

Donald A. 62 Retired President, Maupintour, Inc., 1992(b)
Johnston Lawrence, Kansas (Escorted Tours
(a) And Travel)
Directorships
Commerce Bank, Lawrence

Steven L. 50 Executive Vice President and Chief 1992
Kitchen Financial Officer, Western Resources,
Inc.

Glenn L. 70 Retired Vice President - Nuclear of the 1992(b)
Koester Company

Marilyn B. 46 President, Wichita (since October 1993) 1994
Pauly and prior to that Executive Vice
(a) President, Wichita, Bank IV, N.A.,
Wichita, Kansas
Directorships
Farmers Mutual Alliance Insurance Company

Richard D. 62 President, Range Oil Company 1993
Smith Directorships
Boatmen's National Bank of Kansas

(a) Member of the Audit Committee of which Mr. Johnston is Chairman.
The Audit Committee has responsibility for the investigation and
review of the financial affairs of the Company and its relations
with independent accountants.
(b) Mr. Crain, Mr. Johnston, and Mr. Koester were directors of the
former Kansas Gas & Electric Company since 1981, 1980, and 1986,
respectively.
<PAGE 42>
Outside Directors are paid $3,750 per quarter retainer and are paid an
attendance fee of $600 for Directors' meetings ($300 if attending by phone).
A committee attendance fee of $800 is paid to the outside Director Audit
Committee Chairman, and $500 to other outside Committee members. All outside
Directors are reimbursed mileage and expenses while attending Directors' and
Committee Meetings.

During 1995, the Board of Directors met five times and the Audit
Committee met once. Each director attended at least 75% of the total number
of Board and Committee meetings held while he/she served as a director or a
member of the committee.

Other information required by Item 10 is omitted pursuant to General
Instruction J(2)(c) to Form 10-K.

ITEM 11. EXECUTIVE COMPENSATION

Information required by Item 11 is omitted pursuant to General
Instruction J(2)(c) to Form 10-K.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Information required by Item 12 is omitted pursuant to General
Instruction J(2)(c) to Form 10-K.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information required by Item 13 is omitted pursuant to General
Instruction J(2)(c) to Form 10-K.

<PAGE 43>
PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

The following financial statements are included herein under Item 8.

FINANCIAL STATEMENTS

Balance Sheets, December 31, 1995 and 1994
Statements of Income for the year ended December 31, 1995, 1994 and 1993
Statements of Cash Flows for the year ended December 31, 1995, 1994 and 1993
Statements of Taxes for the year ended December 31, 1995, 1994 and 1993
Statements of Capitalization, December 31, 1995 and 1994
Statements of Common Stock Equity for the year ended December 31, 1995
Notes to Financial Statements

REPORTS ON FORM 8-K

None

<PAGE 44> EXHIBIT INDEX

All exhibits marked "I" are incorporated herein by reference.

Description

2(a) Agreement and Plan of Merger (Filed as Exhibit 2 to Form 10-K I
for the year ended December 31, 1990, File No. 1-7324)

2(b) Amendment No. 1 to Agreement and Plan of Merger (Filed as I
Exhibit 2 to Form 10-K for the year ended December 31, 1990,
File No. 1-7324)

3(a) Articles of Incorporation (Filed as Exhibit 3(a) to Form 10-K I
for the year ended December 31, 1992, File No. 1-7324)

3(b) Certificate of Merger of Kansas Gas and Electric Company into I
KCA Corporation (Filed as Exhibit 3(b) to Form 10-K
for the year ended December 31, 1992, File No. 1-7324)

3(c) By-laws as amended (Filed as Exhibit 3(c) Form 10-K I
for the year ended December 31, 1992, File No. 1-7324)

4(c)1 Mortgage and Deed of Trust, dated as of April 1, 1940 to I
Guaranty Trust Company of New York (now Morgan Guaranty Trust
Company of New York) and Henry A. Theis (to whom W. A. Spooner
is successor), Trustees, as supplemented by thirty-eight
Supplemental Indentures, dated as of June 1, 1942, March 1, 1948,
December 1, 1949, June 1, 1952, October 1, 1953, March 1, 1955,
February 1, 1956, January 1, 1961, May 1, 1966, March 1, 1970,
May 1, 1971, March 1, 1972, May 31, 1973, July 1, 1975,
December 1, 1975, September 1, 1976, March 1, 1977, May 1, 1977,
August 1, 1977, March 15, 1978, January 1, 1979, April 1, 1980,
July 1, 1980, August 1, 1980, June 1, 1981, December 1, 1981,
May 1, 1982, March 15, 1984, September 1, 1984 (Twenty-ninth
and Thirtieth), February 1, 1985, April 15, 1986, June 1, 1991
March 31, 1992, December 17, 1992, August 24, 1993, January 15,
1994 and March 1, 1994, (Filed, respectively, as Exhibit A-1 to
Form U-1, File No. 70-23; Exhibits 7(b) and 7(c), File No. 2-7405;
Exhibit 7(d), File No. 2-8242; Exhibit 4(c), File No. 2-9626;
Exhibit 4(c), File No. 2-10465; Exhibit 4(c), File No. 2-12228;
Exhibit 4(c), File No. 2-15851; Exhibit 2(b)-1, File No. 2-24680;
Exhibit 2(c), File No. 2-36170; Exhibits 2(c) and 2(d), File
No. 2-39975; Exhibit 2(d), File No. 2-43053; Exhibit 4(c)2 to
Form 10-K, for December 31, 1989, File No. 1-7324; Exhibit 2(c),
File No. 2-53765; Exhibit 2(e), File No. 2-55488; Exhibit 2(c),
File No. 2-57013; Exhibit 2(c), File No. 2-58180; Exhibit 4(c)3
to Form 10-K for December 31, 1989, File No. 1-7324; Exhibit 2(e),
File No. 2-60089; Exhibit 2(c), File No. 2-60777; Exhibit 2(g), File
No. 2-64521; Exhibit 2(h), File No. 2-66758; Exhibits 2(d) and
2(e), File No. 2-69620; Exhibits 4(d) and 4(e), File No. 2-75634;
Exhibit 4(d), File No. 2-78944; Exhibit 4(d), File No. 2-87532;
Exhibits 4(c)4, 4(c)5 and 4(c)6 to Form 10-K for December 31,
1989, File No. 1-7324; Exhibits 4(c)2 and 4(c)3 to Form 10-K for
<PAGE 45>
Description

December 31, 1992, File No. 1-7324; Exhibit 4(b) to Form S-3,
File No. 33-50075; Exhibits 4(c)2 and 4(c)3 to Form 10-K for
December 31, 1993, File No. 1-7324; Exhibit 4(c)2 to Form 10-K
for December 31, 1994, File No. 1-7324)

Instruments defining the rights of holders of other long-term debt not
required to be filed as exhibits will be furnished to the Commission
upon request.

10(a) La Cygne 2 Lease (Filed as Exhibit 10(a) to Form 10-K for the year I
ended December 31, 1988, File No. 1-7324)

10(a)1 Amendment No. 3 to La Cygne 2 Lease Agreement dated as of September I
29, 1992 (Filed as Exhibit 10(b)1 to Form 10-K for the year ended
December 31, 1992, File No. 1-7324)

10(b) Outside Directors' Deferred Compensation Plan (Filed as Exhibit I
10(c) to the Form 10-K for the year ended December 31, 1993,
File No. 1-7324)

12 Computation of Ratio of Consolidated Earnings to Fixed Charges
(Filed electronically)

23 Consent of Independent Public Accountants, Arthur Andersen LLP
(Filed electronically)

27 Financial Data Schedule (Filed electronically)

<PAGE 46> SIGNATURE

KANSAS GAS AND ELECTRIC COMPANY

March 27, 1996 By WILLIAM B. MOORE
William B. Moore, Chairman of the Board
and President

</TABLE>