Empire District Electric Company (EDE)

Clean Air Mercury Rule (CAMR)

        On March 15, 2005, the EPA issued the CAMR regulations for mercury emissions by power plants under the requirements of the 1990 Amendments to the Clean Air Act. The new mercury emission limits

18

Table of Contents

of CAMR Phase 1 were to go into effect January 1, 2010. On February 8, 2008, the U.S. Court of Appeals for the District of Columbia vacated the EPA's CAMR regulations which was appealed to the U.S. Supreme Court on October 17, 2008.

        The EPA has not yet issued guidance to the states regarding the vacated regulation nor recommended future actions. Based on CAMR, we installed a mercury analyzer at Asbury during late 2007 and installed two mercury analyzers at Riverton in 2008 in order to verify our mercury emissions and to meet the compliance date of January 1, 2009 for the Phase 1 mercury emission compliance date of January 1, 2010. We will operate the mercury analyzers at Riverton and Asbury in accordance with the appropriate state environmental regulator's guidance.

        If the CAMR rulemaking is ultimately revoked by the EPA after final adjudication, Maximum Achievable Control Technology (MACT) will re-emerge under current law. No specific MACT rulemakings have yet been adopted in Missouri or Kansas.

Clean Air Mercury Rule (CAMR)

        On March 15, 2005, the EPA issued the CAMR regulations for mercury emissions by power plants under the requirements of the 1990 Amendments to the Clean Air Act. The new mercury emission limits

18

Table of Contents

of CAMR Phase 1 were to go into effect January 1, 2010. On February 8, 2008, the U.S. Court of Appeals for the District of Columbia vacated the EPA's CAMR regulations which was appealed to the U.S. Supreme Court on October 17, 2008.

        The EPA has not yet issued guidance to the states regarding the vacated regulation nor recommended future actions. Based on CAMR, we installed a mercury analyzer at Asbury during late 2007 and installed two mercury analyzers at Riverton in 2008 in order to verify our mercury emissions and to meet the compliance date of January 1, 2009 for the Phase 1 mercury emission compliance date of January 1, 2010. We will operate the mercury analyzers at Riverton and Asbury in accordance with the appropriate state environmental regulator's guidance.

        If the CAMR rulemaking is ultimately revoked by the EPA after final adjudication, Maximum Achievable Control Technology (MACT) will re-emerge under current law. No specific MACT rulemakings have yet been adopted in Missouri or Kansas.

Clean Air Mercury Rule (CAMR)

        On March 15, 2005, the EPA issued the CAMR regulations for mercury emissions by power plants under the requirements of the 1990
Amendments to the Clean Air Act. The new mercury emission limits

18

HREF="#bg70901a_main_toc">Table of Contents

of
CAMR Phase 1 were to go into effect January 1, 2010. On February 8, 2008, the U.S. Court of Appeals for the District of Columbia vacated the EPA's CAMR regulations which was
appealed to the U.S. Supreme Court on October 17, 2008.

        The
EPA has not yet issued guidance to the states regarding the vacated regulation nor recommended future actions. Based on CAMR, we installed a mercury analyzer at Asbury during late
2007 and installed two mercury analyzers at Riverton in 2008 in order to verify our mercury emissions and to meet the compliance date of January 1, 2009 for the Phase 1 mercury emission
compliance date of January 1, 2010. We will operate the mercury analyzers at Riverton and Asbury in accordance with the appropriate state environmental regulator's guidance.

        If
the CAMR rulemaking is ultimately revoked by the EPA after final adjudication, Maximum Achievable Control Technology (MACT) will re-emerge under current law. No specific
MACT rulemakings have yet been adopted in Missouri or Kansas.

Clean Air Mercury Rule (CAMR)

        On March 15, 2005, the EPA issued the CAMR regulations for mercury emissions by power plants under the requirements of the 1990 Amendments to the Clean Air Act. The new mercury emission limits of CAMR Phase 1 were to go into effect January 1, 2010. On February 8, 2008, the U.S. Court of Appeals for the District of Columbia vacated the EPA's CAMR regulations which was appealed to the U.S. Supreme Court on October 17, 2008.

        The EPA has not yet issued guidance to the states regarding the vacated regulation nor recommended future actions. Based on CAMR, we installed a mercury analyzer at Asbury during late 2007 and installed two mercury analyzers at Riverton in 2008 in order to verify our mercury emissions and to meet the compliance date of January 1, 2009 for the Phase 1 mercury emission compliance date of January 1, 2010. We will operate the mercury analyzers at Riverton and Asbury in accordance with the appropriate state environmental regulator's guidance.

        If the CAMR rulemaking is ultimately revoked by the EPA after final adjudication, Maximum Achievable Control Technology (MACT) will re-emerge under current law. No specific MACT rulemakings have yet been adopted in Missouri or Kansas.

Clean Air Mercury Rule (CAMR)

        On March 15, 2005, the EPA issued the CAMR regulations for mercury emissions by power plants under the requirements of the 1990 Amendments to the Clean Air Act. The new mercury emission limits of CAMR Phase 1 were to go into effect January 1, 2010. On February 8, 2008, the U.S. Court of Appeals for the District of Columbia vacated the EPA's CAMR regulations which was appealed to the U.S. Supreme Court on October 17, 2008.

        The EPA has not yet issued guidance to the states regarding the vacated regulation nor recommended future actions. Based on CAMR, we installed a mercury analyzer at Asbury during late 2007 and installed two mercury analyzers at Riverton in 2008 in order to verify our mercury emissions and to meet the compliance date of January 1, 2009 for the Phase 1 mercury emission compliance date of January 1, 2010. We will operate the mercury analyzers at Riverton and Asbury in accordance with the appropriate state environmental regulator's guidance.

        If the CAMR rulemaking is ultimately revoked by the EPA after final adjudication, Maximum Achievable Control Technology (MACT) will re-emerge under current law. No specific MACT rulemakings have yet been adopted in Missouri or Kansas.

Clean Air Mercury Rule (CAMR)

        On March 15, 2005, the EPA issued the CAMR regulations for mercury emissions by power plants under the requirements of the 1990
Amendments to the Clean Air Act. The new mercury emission limits of CAMR Phase 1 were to go into effect January 1, 2010. On February 8, 2008, the U.S. Court of Appeals for
the District of Columbia vacated the EPA's CAMR regulations which was appealed to the U.S. Supreme Court on October 17, 2008.

        The
EPA has not yet issued guidance to the states regarding the vacated regulation nor recommended future actions. Based on CAMR, we installed a mercury analyzer at Asbury during late
2007 and installed two mercury analyzers at Riverton in 2008 in order to verify our mercury emissions and to meet the compliance date of January 1, 2009 for the Phase 1 mercury emission
compliance date of January 1, 2010. We will operate the mercury analyzers at Riverton and Asbury in accordance with the appropriate state environmental regulator's guidance.

        If
the CAMR rulemaking is ultimately revoked by the EPA after final adjudication, Maximum Achievable Control Technology (MACT) will re-emerge under current law. No specific
MACT rulemakings have yet been adopted in Missouri or Kansas.

Clean Air Mercury Rule (CAMR)

        On March 15, 2005, the EPA issued the CAMR regulations for mercury emissions by power plants under the requirements of the 1990 Amendments to the Clean Air Act. The new mercury emission limits for Phase 1 were scheduled to go into effect January 1, 2010 and remain in effect until January 1, 2018. Beginning January 1, 2018, more restrictive mercury emission limits were scheduled to go into effect for Phase 2 of CAMR. These regulations were challenged in the U.S. Court of Appeals for the District of Columbia Circuit by a group of states led by New Jersey. On February 8, 2008, the Court of Appeals issued its opinion and vacated the EPA's CAMR regulations. The EPA is required to reconsider the regulation of mercury under Section 112 of the CAA. At this point it is too early to determine the effects of this ruling.

        The CAMR was not directed to specific generation units, but instead, required the states (including Missouri, Kansas and Arkansas) to develop SIPs to comply with specific mercury state-wide annual budgets. Missouri, Kansas and Arkansas have finalized their respective regulations and submitted their SIPs to the EPA. The proposed SIPs for all states include allowance trading programs for mercury that could allow compliance without additional capital expenditures.

        Based on CAMR, we installed a mercury analyzer at Asbury during late 2007 and scheduled the installation of two mercury analyzers at Riverton during 2008 in order to verify our mercury emissions and to meet the compliance date of January 1, 2009 for mercury analyzers and the Phase 1 mercury emission compliance date of January 1, 2010.

Clean Air Mercury Rule (CAMR)

        On March 15, 2005, the EPA issued the CAMR regulations for mercury emissions by power plants under the requirements of the 1990 Amendments to the Clean Air
Act. The new mercury emission limits for Phase 1 were scheduled to go into effect January 1, 2010 and remain in effect until January 1, 2018. Beginning January 1, 2018,
more restrictive mercury emission limits were scheduled to go into effect for Phase 2 of CAMR. These regulations were challenged in the U.S. Court of Appeals for the District of Columbia
Circuit by a group of states led by New Jersey. On February 8, 2008, the Court of Appeals issued its opinion and vacated the EPA's CAMR regulations. The EPA is required to reconsider the
regulation of mercury under Section 112 of the CAA. At this point it is too early to determine the effects of this ruling.

        The
CAMR was not directed to specific generation units, but instead, required the states (including Missouri, Kansas and Arkansas) to develop SIPs to comply with specific mercury
state-wide annual budgets. Missouri, Kansas and Arkansas have finalized their respective regulations and submitted their SIPs to the EPA. The proposed SIPs for all states include allowance
trading programs for mercury that could allow compliance without additional capital expenditures.

        Based
on CAMR, we installed a mercury analyzer at Asbury during late 2007 and scheduled the installation of two mercury analyzers at Riverton during 2008 in order to verify our mercury
emissions and to meet the compliance date of January 1, 2009 for mercury analyzers and the Phase 1 mercury emission compliance date of January 1, 2010.