PPL Reviews U.K. Regulator's New Price Controls
December 07 2009 - 1:28PM
PR Newswire (US)
ALLENTOWN, Pa., Dec. 7 /PRNewswire-FirstCall/ -- PPL Corporation
(NYSE: PPL) has reviewed the final decision on new price controls,
made Monday (12/7) by the Office of Gas and Electricity Markets,
the entity that regulates Western Power Distribution, PPL's
electricity distribution company in the United Kingdom. Ofgem's
decision governs prices charged by electricity distribution
companies such as WPD for the five-year period from April 1, 2010,
through March 31, 2015. The regulator's decision allows WPD an
average increase in total revenues, before inflationary
adjustments, of 6.9 percent in each of the five years through March
31, 2015. The revenue increase includes reimbursement to
electricity distributors for higher operating and capital costs to
be incurred. WPD was one of only two efficient companies identified
by Ofgem to be allocated its requested costs as opposed to an
overall average reduction of 8 percent across all companies. In the
report, Ofgem set the weighted average cost of capital ("vanilla")
at 4.7 percent for all companies. This is a 0.8 percent decrease
from the previous regulatory period. Additionally, Ofgem has
established strong incentive mechanisms to provide companies
significant opportunities to enhance overall returns by improving
network efficiency, reliability or customer service. "We're pleased
that Ofgem has balanced fair customer rates in the near term with
our long-term need to fund costs related to system reliability, to
upgrade aging infrastructure and to accommodate emerging low-carbon
energy sources," said Rick Klingensmith, president of PPL Global,
WPD's parent company. "We are also pleased that Ofgem has
recognized, in its revenue determination, WPD's outperformance in
setting the benchmark for quality of service and network investment
efficiency." Klingensmith said, "While we were disappointed with
the weighted average cost of capital determination, when factoring
in all component pieces of the Ofgem determination, the anticipated
earnings contribution from PPL's international delivery business
segment is consistent with our expectations for 2010." The full
Ofgem report can be accessed at http://www.ofgem.gov.uk/. WPD
serves 2.6 million customers in southwest England and south Wales.
PPL Corporation, headquartered in Allentown, Pa., owns or controls
nearly 12,000 megawatts of generating capacity in the United
States, sells energy in key U.S. markets and delivers electricity
to about 4 million customers in Pennsylvania and the United
Kingdom. More information is available at http://www.pplweb.com/.
Certain statements contained in this news release, including
statements with respect to future earnings and costs, are
"forward-looking statements" within the meaning of the federal
securities laws. Although PPL Corporation believes that the
expectations and assumptions reflected in these forward-looking
statements are reasonable, these 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:
market demand and prices for energy, capacity and fuel; weather
variations affecting customer energy usage; competition in retail
and wholesale power markets; the effect of any business or industry
restructuring; the profitability and liquidity of PPL Corporation
and its subsidiaries; new accounting requirements or new
interpretations or applications of existing requirements; operating
performance of plants and other facilities; environmental
conditions and requirements; system conditions and operating costs;
development of new projects, markets and technologies; performance
of new ventures; asset acquisitions and dispositions; political,
regulatory or economic conditions in states, regions and countries
where PPL Corporation or its subsidiaries conduct business; receipt
of necessary governmental permits, approvals and rate relief; the
outcome of litigation against PPL Corporation and its subsidiaries;
capital market conditions; stock price performance; the securities
and credit ratings of PPL Corporation and its subsidiaries; foreign
exchange rates; and the commitments and liabilities of PPL
Corporation and its subsidiaries. Any such forward-looking
statements should be considered in light of such factors and in
conjunction with PPL Corporation's Form 10-K and other reports on
file with the Securities and Exchange Commission. DATASOURCE: PPL
Corporation CONTACT: Joseph P. Bergstein, for financial community,
+1-610-774-4124, or George Biechler, for news media,
+1-610-774-5997, both of PPL Corporation Web Site:
http://www.pplweb.com/
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