PPL Corporation Form 8K
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of
Report (Date of earliest event reported): March 29, 2007
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Commission
File
Number
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Registrant;
State of Incorporation;
Address
and Telephone Number
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IRS
Employer
Identification
No.
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1-11459
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PPL
Corporation
(Exact
name of Registrant as specified in its charter)
(Pennsylvania)
Two
North Ninth Street
Allentown,
PA 18101-1179
(610)
774-5151
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23-2758192
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1-905
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PPL
Electric Utilities Corporation
(Exact
name of Registrant as specified in its charter)
(Pennsylvania)
Two
North Ninth Street
Allentown,
PA 18101-1179
(610)
774-5151
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23-0959590
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Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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[ ]
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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[ ]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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[ ]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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[ ]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Section
8 - Other Events
Item
8.01 Other Events
Distribution
Rate Increase Filing with the Pennsylvania Public Utility
Commission
On
March 29, 2007, PPL Electric Utilities Corporation (the "Company") filed a
request with the Pennsylvania Public Utility Commission ("PUC") for an overall
annual net increase in distribution revenues of approximately
$83.6 million, based on a future test year ending December 31, 2007, and a
proposed return on equity of 11.50%. The PUC will examine the Company's
distribution rate increase request in a nine-month process that is expected
to
be completed by the end of 2007. Accordingly, if approved, the new distribution
rates would go into effect on January 1, 2008.
The
Company's last retail base rate increase became effective on January 1, 2005.
In
that PUC rate proceeding, the Company was authorized to earn a return on equity
of 10.70%. In calendar year 2006, the Company earned a distribution return
on
equity of 7.32%.
The
distribution rate increase request will not impact the rates collected by the
Company for electricity transmission or for electricity supply that it provides
to retail customers in its service territory as a provider of last resort
("PLR") under the Pennsylvania Electricity Generation Customer Choice and
Competition Act (the “Customer Choice Act”). As part of the settlement of the
Company’s 1998 PUC Restructuring Proceeding, the Company agreed to provide this
electricity supply at predetermined capped rates through 2009. The Company
has
executed two contracts to purchase electricity from PPL EnergyPlus, LLC
sufficient for the Company to meet its PLR obligation through 2009, at the
pre-determined capped rates. The Company's PLR obligation after 2009 will be
determined by the PUC pursuant to rules that have not yet been promulgated.
As
previously disclosed, in February 2007, the PUC issued for public comment
proposed PLR regulations and a policy statement regarding interpretation and
implementation of those regulations.
The
distribution rate request would produce an increase in distribution rates of
approximately 13%, which would produce an increase in overall rates (i.e.,
distribution, transmission, generation and transition charges under the Customer
Choice Act) of about 2.7%. This increase would be allocated to customer classes
based on the results of a class cost-of-service study that was applied subject
to the following two conditions. First, the rate of return for each rate
schedule must move half-way from that rate schedule’s return at present rates to
the system average rate of return. Second, calculated on a percentage basis,
no
rate schedule can receive a distribution rate increase greater than twice the
system average distribution rate increase. The Company will apply a similar
approach in future cases and plans to implement rates that are at or near full
cost of service for each rate class in one or two additional rate cases. The
Company believes that this approach is appropriate under the long-established
Pennsylvania regulatory principles of cost-of-service ratemaking and gradualism
and is fully consistent with a 2006 Pennsylvania Commonwealth Court decision
regarding the Company’s allocation of costs among customer classes.
The
Company's filing includes certain rate design proposals. For instance, the
Company is proposing to move its rate design toward a flat monthly fee for
electric delivery services, rather than continuing to charge rates based on
consumption, because most of the Company's costs are fixed and do not vary
significantly with consumption. Under this proposal, rates for general
residential customers and small commercial customers will be changed to increase
the customer charge and decrease energy charges.
The
Company also is proposing to implement two automatic adjustment surcharges
that
would be reconciled on an annual basis. The first charge would recover from
residential customers all costs associated with the Company’s universal service
programs. The second charge would recover the costs associated with the
Company’s proposed energy efficiency and demand side management programs.
Because these programs will be offered only to residential and small commercial
and industrial customers, this charge would apply only to those customers.
In
addition, the Company proposes in its filing to expand its existing customer
assistance, environmental and economic development programs.
The
Company anticipates it will be required to invest approximately $1.1 billion
in
capital improvements over the next five years to maintain, improve and expand
its distribution system and meet customer needs.
The
Company cannot predict the amount of the rate increase that will ultimately
be
approved by the PUC.
Section
9 - Financial Statements and Exhibits
Item
9.01 Financial Statements and Exhibits
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(d)
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Exhibits
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99.1
-
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Press
release, dated March 29, 2007, announcing PPL Electric Utilities
Corporation’s
distribution rate increase filing.
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrants
have
duly caused this report to be signed on their behalf by the undersigned hereunto
duly authorized.
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PPL
CORPORATION
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By:
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/s/
Matt Simmons
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Matt
Simmons
Vice
President and Controller
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PPL
ELECTRIC UTILITIES CORPORATION
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By:
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/s/
Matt Simmons
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Matt
Simmons
Vice
President and Controller
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Dated: April
3,
2007