The Federal Energy Regulatory Commission has given final approval to acquisition of Louisville Gas & Electric Co. and Kentucky Utilities Co. by Pennsylvania-based PPL Corp. from the U.S. subsidiary of Germany-based E.ON AG.
PPL completed the acquisition Nov. 1, on the heels of FERC approval Oct. 26. PPL and E.ON announced in April that E.ON agreed to sell PPL the two Kentucky utilities for $7.625 billion.
“This acquisition increases the size of our regulated business by 130 percent and, importantly, retains the upside from our competitive generation business during periods of increased wholesale electricity prices and demand,” PPL Chairman James H. Miller said.
Among other assets, the deal adds Kentucky Utilities’ 24-MW Dix Dam on the Dix River and LG&E’s 100.6-MW Ohio Falls project (No. 289) on the Ohio River to PPL’s hydropower portfolio.
Two groups of municipal utilities, Ohio-based American Municipal Power and Kentucky Municipals, had objected the acquisition based on concerns about transmission and wholesale electricity sales issues. In September, PPL and E.ON filed with FERC new commitments from PPL that honored existing commitments of the Kentucky utilities and agreed to work with stakeholders in the region on transmission and wholesale power issues.
PPL intends to operate the acquisition as a wholly owned subsidiary of PPL Corp., retaining the headquarters in Louisville, as has been the case with E.ON ownership. Customers will continue to be served by LG&E and KU, with operational headquarters in Louisville and Lexington.
The Allentown, Pa.-based PPL Corp. operates more than 12,000 MW of generating capacity including hydropower. Its major hydro projects include: 107.2-MW Holtwood on Pennsylvania’s Susquehanna River, which it is expanding by 125 MW, and 44-MW Wallenpaupack on Pennsylvania’s Lake Wallenpaupack. PPL announced in September it would sell its one-third share of the 241-MW Safe Harbor hydro project on the Susquehanna River in Pennsylvania along with other non-core assets to LS Power Equity Advisors.
Subsidiary PPL Montana’s 11 hydro plants on Montana’s Clark Fork, Flathead, Madison, and Missouri rivers total 602 MW, with construction under way of a new 62-MW Rainbow hydro plant. Subsidiary PPL Maine recently sold three small hydro plants in Maine to a salmon restoration group for decommissioning. PPL Maine sold its other six Maine plants in 2009 to Black Bear Hydro Partners LLC.
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