By Michael Brooks
PPL will file a base distribution rate case this year for its Pennsylvania business, CEO William Spence said during the company’s fourth-quarter earnings call last week.
The company is also seeking rate increases for its regulated Kentucky operations, with the company asking for an additional $30 million annually from Louisville Gas & Electric customers and $150 million from Kentucky Utilities. Spence said he expects new rates, requested for infrastructure investments required for reliability and federal environmental regulations, to become effective July 1.
PPL reported earnings of $1.74 billion ($2.61/share) for the year versus $1.13 billion ($1.76/share) for 2013. The company’s fourth-quarter earnings in 2014 were $695 million ($1.04/share), compared to the loss of $98 million (-$0.16/share) it posted for the same period in 2013.
Spence said the improvement was due to high returns on transmission investments in Pennsylvania and plant environmental projects in Kentucky, as well as increased utility revenues from price increases in the U.K.
Earnings from ongoing operations, however, remained flat from 2013. Higher earnings from the company’s Pennsylvania and the U.K. segments were offset by lower than expected earnings in Kentucky. The company’s total electric sales in the U.S. decreased by 3,769 GWh, or 6.2%, from 2013. Spence said that slow residential growth in rural Virginia and Kentucky played a large role in the decrease.
Spence said he is optimistic about the PJM market. “We see market reforms, such as PJM’s proposed Capacity Performance product, the shift in the variable resource requirement curve and a recent increase in the offer cap, as constructive signals supporting the competitive power business in PJM for the future,” he said.
Spence said that PPL’s deal with Riverstone Holdings to spin off its generation supply business into Talen Energy was the company’s top priority for 2015, but the company said little about it last week, citing a “quiet period” as it awaits a response on its filing with the Securities and Exchange Commission.
The company expects the deal to close on time in the second quarter this year. It accepted the Federal Energy Regulatory Commission’s mitigation plan late last month and it expects approval with the Pennsylvania PUC and the Nuclear Regulatory Commission as it originally projected. (See PPL, Riverstone Accept FERC Mitigation Plan on Talen Spinoff.)
