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The New CEO's

Michael G. Morris
Fortnightly Magazine - June 2004

come from? Would it be industrials needing more power to meet the growing economy's demands?

Our strategy is that our wholesale business is focused on co-ops and municipalities, and to some degree, other utilities. We have unregulated wholesale contracts with Duke and Florida Power & Light, but our primary focus is co-ops and munis.

Michael J. Chesser

Chairman and Chief Executive Officer, Great Plains Energy

The Executive

Age: 55
Education: Bachelor of Science, Aerospace Engineering, Georgia Tech; Master of Business Administration, Finance, Loyola College, Baltimore; graduate of the Advanced Management Program at Harvard University.
Board Memberships: Trustee of the University of Missouri-Kansas City and the Midwest Research Institute (MRI). Board member of the Heart of America United Way and the Electric Power Research Institute (EPRI), and a member of the Civic Council of Greater Kansas City.
Earlier in Career: Mr. Chesser joined the company in October 2003 as chairman and chief executive officer after a long and distinguished career in the utility industry that began at Baltimore Gas and Electric. He subsequently served as president and chief operating officer at Atlantic Energy Inc. and president and CEO at GPU Energy, an electric utility serving New Jersey and Pennsylvania. Prior to joining Great Plains Energy, he was chairman and CEO of United Water, which owns and operates several regulated water utilities along with its contract operations.

The Company

Market Cap End of 1Q2004: $2.34 billion
Revenue 2003: $2.15 billion
Net Income 2003: $144.9 million
Employees 2003: 2,475

What are some of your goals as a CEO in 2004 and beyond?

We believe the rising price of natural gas is going to make coal more attractive. It is our intent to try to find a way to capitalize on the core competencies and assets that we have. We haven't decided yet to build a new coal plant, but we do have coal sites that are very attractive from a transportation standpoint and coal supply standpoint. [We are also pursuing] a retail customer distributed technology strategy.

What technology strategy do you hope to adopt?

It could range from on-site generation to load control technologies tying into commercial buildings to help them change the temperature in the building that would be coincident with the utility's need for additional peaking requirements. It could [also] be residential load air-conditioner cyclers.

How do you hope to grow earnings in your business?

Great Plains Energy is very fortunate to have engines of organic growth. Not every company has that, but we do. We have a very active wholesale market, we have very low-cost coal, we have the potential to add to assets, and we have one of the real success stories on the non-regulated side [Strategic Energy], with a lot of room left to grow. My primary focus is going to be to maximize steady, low-risk, organic growth. I would say it would be certainly growth, on a risk-adjusted basis, among the best in the industry.

What is the growth now?

Over the last couple of years, the growth rate has been five percent, but it has been low-risk growth.