Item 8.01 Other Events
On November 13, 2020, Louisville Gas and Electric Company ("LG&E") and Kentucky
Utilities Company ("KU", and collectively with LG&E, the "Companies") announced
that they anticipate filing requests with the Kentucky Public Service Commission
("KPSC") on or after November 25, 2020 for increases in annual electricity
revenues at LG&E and KU and annual gas revenues at LG&E.
The anticipated applications request an increase in annual electricity revenues
of approximately $131 million and $170 million at LG&E and KU, respectively, and
an increase in annual gas revenues of approximately $30 million at LG&E. The
proposed revenue increases would be an increase of 11.6% and 10.4% in
electricity revenues at LG&E and KU, respectively, and an increase of 8.3% in
gas revenues at LG&E. The Companies are also requesting approval for a one-year
billing credit which will credit customers approximately $53 million,
representing approximately $39 million and $12 million for LG&E and KU
electricity customers and $2 million for LG&E gas customers. The billing credit
represents the return to customers of certain regulatory liabilities on the
Companies' balance sheets and serves to partially mitigate the rate increases
mentioned above during the first year in which the new rates are in effect.
LG&E's and KU's applications also include requests for certificates of public
convenience and necessity to deploy advanced metering infrastructure across
LG&E's and KU's service territories in Kentucky.
The applications will be based on a forecasted test year of July 1, 2021 through
June 30, 2022 and a requested authorized return-on-equity of 10.0%. Subject to
KPSC approval, the requested rates, decreased by the amount of the billing
credit, are expected to become effective on July 1, 2021.
The proceedings have been designated as KPSC Case No. 2020-00350 for LG&E and
Case No. 2020-00349 for KU.
The Companies cannot predict the outcome of these proceedings.
Statements in this report regarding future events and their timing, including
the Companies' proposed rate changes, future rates, rate mechanisms or returns
on equity, as well as statements as to future costs or expenses, regulation,
corporate strategy and performance, are "forward-looking statements" within the
meaning of the federal securities laws. Although the Companies believe that the
expectations and assumptions reflected in these forward-looking statements are
reasonable, these expectations, assumptions and statements are subject to a
number of risks and uncertainties, and actual results may differ materially from
the results discussed in the statements. The following are among the important
factors that could cause actual results to differ materially from the
forward-looking statements: subsequent phases of rate proceedings and regulatory
cost recovery; market demand and prices for electricity and natural gas;
political, regulatory or economic conditions in states and regions where the
Companies conduct business; and the progress of actual construction, purchase or
installation of assets or operations subject to tracker mechanisms. All
forward-looking statements should be considered in light of these important
factors and in conjunction with PPL Corporation's, LG&E and KU Energy LLC's and
the Companies' Form 10-K and other reports on file with the Securities and
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