Item 7.01. Regulation FD Disclosure
Louisville Gas and Electric Company ("LG&E") and Kentucky Utilities Company
("KU" and collectively with LG&E, the "Companies"), subsidiaries of PPL
Corporation ("PPL"), sustained damage from extraordinary storms on March 3,
2023. PPL does not expect that the cost of the storms' damage and related
restoration and repair activities will significantly affect its business outlook
and reaffirms at this time its previously provided 2023 earnings forecast as
discussed in its Current Report on Form 8-K and exhibits filed on February 17,
2023.
Item 8.01. Other Events
On Friday, March 3, 2023, LG&E and KU experienced significant rain and wind
storm activity in their service territories, resulting in substantial damage to
certain of the Companies' assets. Cumulatively, the storms impacted over 380,000
of the Companies' electric customers and involved approximately 3,300 downed
power lines and 700 utility poles. As of Wednesday, March 8, 2023, approximately
16,000 customers remained affected.
The Companies' preliminary estimate of the cost of the storm's damage and of
related restoration and repair activities, including capital and operations and
maintenance costs, is approximately $80 million to $100 million; however, actual
costs will not be known until all repairs are completed. The Companies estimate
that approximately 60% of the costs will be incurred at KU and 40% at LG&E. Of
these amounts, approximately 75% are expected to be capitalized and
approximately 25% are expected to be operations and maintenance expenses. The
Companies expect to request from the Kentucky Public Service Commission ("KPSC")
the authority to treat the extraordinary storm operations and maintenance
expenses as a regulatory asset and defer such costs for accounting purposes.
Historically, the KPSC has granted such requests in similar circumstances with
respect to past storms, but there can be no assurance that they will do so in
this case. If approved, the Companies anticipate requesting recovery of the
expenses over a suitable period in a subsequent rate proceeding. The Companies
will continue to repair damage caused by the storm and to evaluate the storm's
cost and applicable accounting and regulatory treatments, but cannot predict
whether such costs will be recovered through their rates.
Cautionary Statement on Forward-Looking Statements
Statements in this report regarding future events and their timing, including
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 PPL and 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;
and final negotiated terms and conditions in any prospective contracts and the
progress of actual repairs, purchase or installation of assets or operations.
All forward-looking statements should be considered in light of these important
factors and in conjunction with the Companies' Form 10-K and other reports on
file with the Securities and Exchange Commission.
As provided in General Instruction B.2 of Form 8-K, the information contained in
Item 7.01 of this Form 8-K shall not be deemed to be "filed" for purposes of
Section 18 of the Securities Exchange Act of 1934,
--------------------------------------------------------------------------------
as amended, nor shall any such information be deemed to be incorporated by
reference in any filing under the Securities Act of 1933, as amended, except as
shall be expressly set forth by specific reference in such a filing.
--------------------------------------------------------------------------------
© Edgar Online, source Glimpses