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What changed in PPL Corporation's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of PPL Corporation's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+392 added−415 removedSource: 10-K (2025-02-13) vs 10-K (2024-02-16)

Top changes in PPL Corporation's 2024 10-K

392 paragraphs added · 415 removed · 311 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

88 edited+15 added−36 removed79 unchanged
Biggest changeReliability of coal deliveries can be affected from time to time by several factors including fluctuations in demand, coal mine production issues, high or low river level events, lock outages and other supplier or transporter operating or financial difficulties. 6 Table of Contents LG&E and KU have entered into coal supply agreements with various suppliers for coal deliveries through 2028 and augment their coal supply agreements with spot market purchases, as needed.
Biggest changeFuel inventory is maintained at levels estimated to be necessary to avoid operational disruptions at coal-fired generating units. Reliability of coal deliveries can be affected from time to time by several factors including fluctuations in demand, coal mine production issues, high or low river level events, lock outages and other supplier or transporter operating or financial difficulties.
LG&E has a portfolio of supply arrangements of varying durations and terms that provide competitively priced natural gas designed to meet its firm sales obligations. These natural gas supply arrangements include pricing provisions that are market-responsive. In tandem with pipeline transportation services, these natural gas supplies provide the reliability and flexibility necessary to serve LG&E's natural gas customers.
LG&E has a portfolio of supply arrangements of varying terms that provide competitively priced natural gas designed to meet its firm sales obligations. These natural gas supply arrangements include pricing provisions that are market-responsive. In tandem with pipeline transportation services, these natural gas supplies provide the reliability and flexibility necessary to serve LG&E's natural gas customers.
Among the items discussed are statistics regarding Ethics Helpline reports and employee concerns. This information is also reviewed with the Audit Committee of the Board quarterly. PPL will continue to engage with employees and to assess these priorities as we work to best position individuals and the company for future success.
Among the items discussed are statistics regarding Ethics Helpline reports and employee concerns. This information is also reviewed with the Audit Committee of the Board quarterly and with the Board annually. PPL will continue to engage with employees and to assess these priorities as we work to best position individuals and the company for future success.
Based on analyses to date, resolution of these environmental matters is not expected to have a significant adverse impact on the operations of PPL, PPL Electric, LG&E and KU. Future cleanup or remediation work at sites not yet identified may result in significant additional costs for the Registrants.
Based on analyses to date, resolution of these environmental matters is not expected to have a significant adverse impact on the operations of PPL, PPL Electric, LG&E, KU and RIE. Future cleanup or remediation work at sites not yet identified may result in significant additional costs for the Registrants.
Senior management reviews succession planning with the Compensation Committee of the Board on an annual basis. • Comprehensive benefits - In addition to challenging careers and competitive salaries, PPL offers competitive benefits programs to attract and retain talent and support employees' well-being.
Senior management reviews succession planning with the People and Compensation Committee of the Board on an annual basis. • Comprehensive benefits - In addition to challenging careers and competitive salaries, PPL offers competitive benefits programs to attract and retain talent and support employees' well-being.
Under this formula, beginning in 2023, rates are put into effect on January 1st of each year based upon actual expenditures from the most recently filed FERC Form 1, forecasted capital additions, and other data based on PPL Electric’s books and records. 2023 is considered a transitional period as the calendar year rate approved by FERC became effective April 1, 2023.
Under this formula, beginning in 2023, rates are put into effect on January 1st of each year based upon actual expenditures from the most recently filed FERC Form 1, forecasted capital additions, and other data based on PPL Electric’s books and records. 2023 was considered a transitional period as the calendar year rate approved by FERC became effective April 1, 2023.
The net-zero goal relates to direct and indirect carbon emissions consistent with Greenhouse Gas Protocol guidance and referenced by the EPA Center for Corporate Climate Leadership. Through 2021, PPL reduced carbon emissions nearly 60% from 2010 levels and is targeting a 70% reduction from 2010 levels by 2035 and an 80% reduction by 2040.
The net-zero goal relates to direct and indirect carbon emissions consistent with Greenhouse Gas Protocol guidance and referenced by the EPA Center for Corporate Climate Leadership. Through 2023, PPL reduced carbon emissions nearly 60% from 2010 levels and is targeting a 70% reduction from 2010 levels by 2035 and an 80% reduction by 2040.
Pursuant to its charter, the Compensation Committee of the Board of Directors also periodically reviews and assesses the Company's strategy for human capital management.
Pursuant to its charter, the People and Compensation Committee of the Board of Directors also periodically reviews and assesses the company's strategy for human capital management.
The information contained on, or available through, PPL's Internet website is not, and shall not be deemed to be, incorporated by reference into this report. Additionally, the Registrants' filings are available at the SEC's website (www.sec.gov). 17 Table of Contents
The information contained on, or available through, PPL's Internet website is not, and shall not be deemed to be, incorporated by reference into this report. Additionally, the Registrants' filings are available at the SEC's website (www.sec.gov). 16 Table of Contents
On November 6, 2023, the KPSC issued an order approving LG&E’s and KU’s requests (i) to construct a 640 MW net summer rating NGCC combustion turbine at LG&E's Mill Creek Generating Station in Jefferson County, Kentucky, (ii) to construct a 120 MWac solar photovoltaic electric generating facility in Mercer County, Kentucky, (iii) to acquire a 120 MWac solar facility to be built by a third-party solar developer in Marion County, Kentucky and (iv) to construct a 125 MW, 4-hour battery energy storage system facility at KU's E.W.
On November 6, 2023, the KPSC issued an order approving LG&E’s and KU’s December 15, 2022 CPCN requests (i) to construct a 640 MW net summer rating NGCC combustion turbine at LG&E's Mill Creek Generating Station in Jefferson County, Kentucky, (ii) to construct a 120 MWac solar photovoltaic electric generating facility in Mercer County, Kentucky, (iii) to acquire a 120 MWac solar facility to be built by a third-party solar developer in Marion County, Kentucky and (iv) to construct a 125 MW, 4-hour battery energy storage system facility at KU's E.W.
In addition to operating the electricity transmission network, PJM also administers regional markets for energy, capacity and ancillary services. A primary objective of any RTO is to separate the operation of, and access to, the 8 Table of Contents transmission grid from market participants that buy or sell electricity in the same markets.
In addition to operating the electricity transmission network, PJM also administers regional markets for energy, capacity and ancillary services. A primary objective of any RTO is to separate the operation of, and access to, the transmission grid from market participants that buy or sell electricity in the same markets.
PPL, LG&E and KU are unable to predict the outcome or financial impact of future regulatory proceedings and litigation. 14 Table of Contents Waters of the U.S. PPL, LG&E, and KU are subject to permitting and mitigation requirements for certain construction activities that impact "Waters of the United States." On April 21, 2020, the EPA and U.S.
PPL, LG&E and KU are unable to predict the outcome or financial impact of future regulatory proceedings and litigation. Waters of the U.S. PPL, LG&E, and KU are subject to permitting and mitigation requirements for certain construction activities that impact "Waters of the United States." On April 21, 2020, the EPA and U.S.
LG&E purchases natural gas supply transportation services from two pipelines. LG&E has a set of contracts with one pipeline that are subject to termination by LG&E between 2025 and 2028. Total winter season capacity under these contracts is 184,900 MMBtu/day and summer season capacity is 60,000 MMBtu/day. LG&E has two additional contracts with this same pipeline.
LG&E purchases natural gas supply transportation services from two pipelines. LG&E has a set of contracts with one pipeline that are subject to termination by LG&E between 2026 and 2030. Total winter season capacity under these contracts is 184,900 MMBtu/day and summer season capacity is 60,000 MMBtu/day. LG&E has two additional contracts with this same pipeline.
The charge for Last Resort Service includes the administrative costs associated with the procurement of Last Resort Service, including an adjustment for uncollectible accounts as approved by the RIPUC. Numerous alternative suppliers have offered to provide generation supply in RIE's service area.
The charge for LRS includes the administrative costs associated with the procurement of LRS, including an adjustment for uncollectible accounts as approved by the RIPUC. Numerous alternative suppliers have offered to provide generation supply in RIE's service area.
These requirements could impose significant costs for LG&E and KU, which are expected to be subject to rate recovery. Clean Water Act Jurisdiction Environmental groups and others have claimed that discharges to groundwater from leaking CCR impoundments at power plants are subject to Clean Water Act permitting.
These requirements could impose significant costs for LG&E and KU, which are expected to be subject to rate recovery. 13 Table of Contents Clean Water Act Jurisdiction Environmental groups and others have claimed that discharges to groundwater from leaking CCR impoundments at power plants are subject to Clean Water Act permitting.
Insurance policies maintained by LG&E and KU may be available to cover certain of the costs or other obligations related to these matters, but the amount of insurance coverage or reimbursement cannot be estimated or assured. See “Legal Matters” in Note 13 to the Financial Statements for additional information.
Insurance policies maintained by LKE may be available to cover certain of the costs or other obligations related to these matters for LG&E or KU, but the amount of insurance coverage or reimbursement cannot be estimated or assured. See “Legal Matters” in Note 12 to the Financial Statements for additional information.
Certain operating expenses are also 10 Table of Contents included in RIE’s distribution base rates including wages and benefits, other operation and maintenance expenses, depreciation, and taxes. Transmission RIE owns an electric transmission system in Rhode Island. RIE’s transmission services are regulated by the FERC and coordinated with ISO – New England.
Certain operating expenses are also included in RIE’s distribution base rates including wages and benefits, other operation and maintenance expenses, depreciation, and taxes. Transmission RIE owns an electric transmission system in Rhode Island. RIE’s transmission services are regulated by the FERC and coordinated with ISO – New England.
The pattern of this fluctuation may change depending on the type and location of the facilities owned. FINANCIAL CONDITION See "Financial Condition" in "Item 7. Combined Management's Discussion and Analysis of Financial Condition and Results of Operations" for this information.
The pattern of this fluctuation may change depending on the type and location of the facilities owned. 14 Table of Contents FINANCIAL CONDITION See "Financial Condition" in "Item 7. Combined Management's Discussion and Analysis of Financial Condition and Results of Operations" for this information.
Construction of five 500-kilowatt phases was completed as 5 Table of Contents of December 31, 2022. LG&E and KU continue to market the program and are accepting subscriptions for the sixth 500-kilowatt phase.
Construction of five 500-kilowatt phases was completed as of December 31, 2022. LG&E and KU continue to market the program and are accepting subscriptions for the sixth 500-kilowatt phase.
On January 18, 2023, the EPA and U.S. Army Corps of Engineers published a final revision to the rule broadening the definition of Waters of the United States and reverting to the pre-2015 regulatory framework. Although the broader definition incorporates additional water bodies, any resulting permitting, construction, and operational expenses are expected to be immaterial and subject to rate recovery.
Army Corps of Engineers published a final revision to the rule broadening the definition of Waters of the United States and reverting to the pre-2015 regulatory framework. Although the broader definition incorporates additional water bodies, any resulting permitting, construction, and operational expenses are expected to be immaterial and subject to rate recovery. On May 25, 2023, the U.S.
The KPSC order included approval of the requested retirements of two existing coal-fired generation units at LG&E's Mill Creek Unit 1 (300 MW) and 2 (297 MW) in 2024 and 2027, subject to certain conditions, and three small gas-fired units. The order denied approval of the retirement of KU's E.W.
The KPSC order included approval of the requested retirements of two existing coal-fired generation units at LG&E's Mill Creek Unit 1 (300 MW) in 2024 , which occurred on December 31, 2024, and Mill Creek Unit 2 (297 MW) in 2027, subject to certain conditions, and three small gas-fired units. The order denied approval of the retirement of KU's E.W.
The monthly charge for Last Resort Service also includes the costs incurred by RIE to comply with the Renewable Energy Standard, established in Rhode Island General Laws Section 39-26-1 and the costs to comply with the RIPUC’s Rules Governing Energy Source Disclosure.
The monthly charge for LRS also includes the costs incurred by RIE to comply with the Renewable Energy Standard, established in Rhode Island General Laws Section 39-26-1 and the costs to comply with the RIPUC’s Rules Governing Energy Source Disclosure.
These solicitations contain a mix of products including 5-year block energy contracts for residential customers, 6- and 12-month fixed-price load-following contracts for residential and small commercial and industrial customers, 12-month real-time pricing contracts for large commercial and industrial customers, and alternative energy credit contracts for residential, commercial and industrial customers.
These solicitations contain a mix of products including 10-year block energy contracts for residential customers, 12- and 24-month fixed-price load-following contracts for residential and small commercial and industrial customers, 12-month real-time pricing contracts for large commercial and industrial customers, and alternative energy credit contracts for residential, commercial and industrial customers.
KU provides electric service to approximately 545,000 customers in 77 counties in central, southeastern and western Kentucky and approximately 28,000 customers in five counties in southwestern Virginia, covering 4 Table of Contents approximately 4,800 non-contiguous square miles. KU also sells wholesale electricity to two municipalities in Kentucky under load following contracts.
KU provides electric service to approximately 549,000 customers in 77 counties in central, southeastern and western Kentucky and approximately 28,000 customers in five counties in southwestern Virginia, covering approximately 4,800 non-contiguous square miles. KU also sells wholesale electricity to two municipalities in Kentucky under load following contracts.
CAPITAL EXPENDITURE REQUIREMENTS See "Financial Condition - Liquidity and Capital Resources - Forecasted Uses of Cash - Capital Expenditures" in "Item 7. Combined Management's Discussion and Analysis of Financial Condition and Results of Operations" for information concerning projected capital expenditure requirements for 2024 through 2026. See "Item 1.
CAPITAL EXPENDITURE REQUIREMENTS See "Financial Condition - Liquidity and Capital Resources - Forecasted Uses of Cash - Capital Expenditures" in "Item 7. Combined Management's Discussion and Analysis of Financial Condition and Results of Operations" for information concerning projected capital expenditure requirements for 2025 through 2027. See "Item 1.
RIE expects to purchase certain natural gas supplies that originate in Canada and from regional LNG import terminals. 11 Table of Contents Corporate and Other (PPL) PPL Services provides PPL subsidiaries with administrative, management and support services.
RIE expects to purchase certain natural gas supplies that originate in Canada and from regional LNG import terminals. Corporate and Other (PPL) PPL Services provides PPL subsidiaries with administrative, management and support services.
Business - Environmental Matters" for additional information concerning the potential impact on capital expenditures from environmental matters. 15 Table of Contents HUMAN CAPITAL PPL, together with its subsidiaries, is committed to fostering an exceptional workplace for employees.
Business - Environmental Matters" for additional information concerning the potential impact on capital expenditures from environmental matters. HUMAN CAPITAL PPL, together with its subsidiaries, is committed to fostering an exceptional workplace for employees.
PPL pledges to enable the success of its current and future workforce by cultivating a diverse, equitable and inclusive culture, fostering professional development, encouraging employee engagement, and ensuring a safe and healthy work environment. Matters related to these priorities and corporate culture are overseen by PPL's senior management, which provides updates to the PPL Board of Directors (the Board).
PPL pledges to enable the success of its current and future workforce by cultivating a supportive, empowering and collaborative culture, fostering professional development, encouraging employee engagement, and ensuring a safe and healthy work environment. Matters related to these priorities and corporate culture are overseen by PPL's senior management, which provides updates to the PPL Board of Directors (the Board).
LG&E provides electric service to approximately 436,000 customers in Louisville and adjacent areas in Kentucky, covering approximately 700 square miles in nine counties and provides natural gas service to approximately 335,000 customers in its electric service area and eight additional counties in Kentucky.
LG&E provides electric service to approximately 440,000 customers in Louisville and adjacent areas in Kentucky, covering approximately 700 square miles in nine counties and provides natural gas service to approximately 336,000 customers in its electric service area and eight additional counties in Kentucky.
PPL's principal subsidiaries at December 31, 2023 are shown below (* denotes a Registrant).
PPL's principal subsidiaries at December 31, 2024 are shown below (* denotes a Registrant).
In December 2020, the PAPUC approved PPL Electric’s default service plan for the period June 1, 2021 through May 31, 2025, which includes a total of eight solicitations for electricity supply held semiannually in April and October. Through December 31, 2023, six auctions of the plan were completed.
In December 2020, the PAPUC approved PPL Electric’s default service plan for the period June 1, 2021 through May 31, 2025, which included a total of eight solicitations for electricity supply held semiannually in April and October. Through December 31, 2024, all auctions of the plan were completed.
Senior management reviews corporate culture with the Board at least annually. • Professional development - Invest in the current and future workforce through training and development, succession planning and creation of a pipeline for internal advancement.
Senior management reviews employee engagement efforts with the Board at least annually. • Professional development - Invest in the current and future workforce through training and development, succession planning and creation of a pipeline for internal advancement.
RIE provides electric service to approximately 514,000 customers and natural gas service to approximately 278,000 customers. RIE's service area covers substantially all of Rhode Island.
RIE provides electric service to approximately 515,000 customers and natural gas service to approximately 280,000 customers. RIE's service area covers substantially all of Rhode Island.
Power Supply At December 31, 2023, LG&E owned generating capacity of 2,760 MW and KU owned generating capacity of 4,775 MW. See "Item 2. Properties - Kentucky Regulated Segment" for a complete list of generating facilities.
Power Supply At December 31, 2024, LG&E owned generating capacity of 2,466 MW and KU owned generating capacity of 4,798 MW. See "Item 2. Properties - Kentucky Regulated Segment" for a complete list of generating facilities.
PPL had a turnover rate of 9.08% for the year ended December 31, 2023. Looking forward, PPL will maintain our strong focus on workforce planning to address future talent needs.
PPL had a turnover rate of 8.25% for the year ended December 31, 2024. Looking forward, PPL will maintain our strong focus on workforce planning to address future talent needs.
In 2023, the following average percentages of PPL Electric's customer load were provided by competitive suppliers: 42% of residential, 80% of small commercial and industrial and 97% of large commercial and industrial customers. PPL Electric’s electricity generation costs are established based upon the results of a competitive solicitation process.
In 2024, the following average percentages of PPL Electric's customer load were provided by competitive suppliers: 43% of residential, 82% of small commercial and industrial and 98% of large commercial and industrial customers. PPL Electric’s electricity generation costs are established based upon the results of a competitive solicitation process.
RIE recognizes ARPs with a corresponding offset to a regulatory asset or liability account when the regulatory specified events or conditions have been met, when the amounts are determinable, and are probable of recovery (or payment) through future rate adjustments. Last Resort Service RIE is required by the RIPUC and by statute to provide Last Resort Service.
RIE recognizes ARPs with a corresponding offset to a regulatory asset or liability account when the regulatory specified events or conditions have been met, when the amounts are determinable, and are probable of recovery (or payment) through future rate adjustments.
KU's rates to two municipal customers for wholesale power requirements are calculated based on annual updates to a formula rate that utilizes a return on rate base (net utility plant plus working capital less accumulated deferred income taxes and miscellaneous deductions).
KU's rates to two municipal customers for wholesale power requirements are calculated based on annual updates to a formula rate that utilizes a return on rate base (net utility plant plus certain regulatory assets and working capital less accumulated deferred income taxes, certain regulatory liabilities and miscellaneous deductions) and include recovery of applicable operations and maintenance expenses.
Senior management reviews demographic metrics, DEI objectives and associated programs semi-annually. The Board also receives periodic updates from senior management on PPL's DEI strategy and initiatives. • Employee engagement - Create a workplace that fosters an engaged, high-quality workforce. PPL's operating companies regularly conduct assessments related to employee engagement, safety and culture.
The Board also receives periodic updates from senior management on PPL's strategy and initiatives that drive corporate culture. • Employee engagement - Create a workplace that fosters an engaged, high-quality workforce. PPL's operating companies regularly conduct assessments related to employee engagement, safety and culture.
Supreme Court ruling may impact future EPA rulemaking. All of these developments are preliminary or ongoing in nature and the Registrants cannot predict the final outcome or ultimate impact on operations.
All of these developments are preliminary or ongoing in nature and the Registrants cannot predict the final outcome or ultimate impact on operations.
In March 2021, the EPA released final revisions to the Cross-State Air Pollution Rule (CSAPR) aimed at ensuring compliance with the 2008 ozone NAAQS and providing for reductions in ozone season nitrogen oxide emissions for 2021 and subsequent years. Additionally, the EPA reversed its previous approval of the Kentucky State Implementation Plan with respect to these requirements.
In March 2021, the EPA released final revisions to the Cross-State Air Pollution Rule (CSAPR), aimed at ensuring compliance with the 2008 ozone NAAQS and providing for reductions in ozone season nitrogen oxide emissions for 2021 and subsequent years.
In March 2023, the EPA Administrator released a final Federal Implementation Plan under the Good Neighbor provisions of the Clean Air Act providing for significant additional nitrogen oxide emission reductions for compliance with the revised 2015 ozone NAAQS.
In March 2023, the EPA released a final Federal Implementation Plan under the Good Neighbor provisions of the Clean Air Act providing for significant additional nitrogen oxide emission reductions for compliance with the revised 2015 ozone NAAQS. The reductions in Kentucky state-wide nitrogen oxide budgets were scheduled to commence in 2023, with the largest reductions planned for 2026.
While the impact of new GHG reduction requirements on operations and financial results of operations could potentially be substantial, the cost of complying with such requirements is expected to be subject to rate recovery. PPL, LG&E, and KU will continue to monitor the ongoing rulemaking process.
While the impact of new GHG reduction requirements on operations and financial results of operations could potentially be substantial, the cost of complying with such requirements is expected to be subject to rate recovery.
"Corporate and Other" primarily includes corporate level financing costs, certain unallocated costs, and certain non-recoverable costs incurred in conjunction with the acquisition of Narragansett Electric and the financial results of Safari Energy, prior to its sale on November 1, 2022.
"Corporate and Other" primarily includes corporate level financing costs, certain unallocated corporate costs, and certain non-recoverable costs incurred in conjunction with the acquisition of Rhode Island Energy and the financial results of Safari Energy, prior to its sale on November 1, 2022. A comparison of PPL's Regulated segments is shown below.
LG&E's natural gas tariffs include gas price pass-through mechanisms relating to its sale of natural gas as a commodity. Therefore, customer natural gas purchases from alternative suppliers do not generally impact LG&E's profitability. Some large industrial and commercial customers, however, may physically bypass LG&E's facilities and seek delivery service directly from interstate pipelines or other natural gas distribution systems.
Therefore, customer natural gas purchases from alternative suppliers do not generally impact LG&E's profitability. Some large industrial and commercial customers, however, may physically bypass LG&E's facilities and seek delivery service directly from interstate pipelines or other natural gas distribution systems.
RIE's natural gas tariffs include gas price pass-through mechanisms relating to its sale of natural gas as a commodity. Therefore, customer natural gas purchases from alternative suppliers do not generally impact RIE's profitability. Some large industrial and commercial customers, however, may physically bypass RIE's facilities and seek delivery service directly from interstate pipelines or other natural gas distribution systems.
Therefore, customer natural gas purchases from alternative suppliers do not generally impact RIE's profitability. Some large industrial and commercial customers, however, may physically bypass RIE's facilities and seek delivery service directly from interstate pipelines or other natural gas distribution systems.
Supreme Court ruled that provisions of the EPA's Clean Power Plan, premised on generation shifting from coal-fired plants to lower emitting natural gas-fired plants and renewables, exceeded the authority granted to the EPA under the Clean Air Act. The EPA has announced proposed new greenhouse gas rules discussed above. It is uncertain how the U.S.
Supreme Court ruled that provisions of the EPA's Clean Power Plan, premised on generation shifting from coal-fired plants to lower emitting natural gas-fired plants and renewables, exceeded the authority granted to the EPA under the Clean Air Act.
Franchises and Licenses LG&E and KU provide electricity delivery service, and LG&E provides natural gas distribution service, in their respective service territories pursuant to certain franchises, licenses, statutory service areas, easements and other rights or permissions granted by state legislatures, cities or municipalities or other entities.
Franchises and Licenses LG&E and KU provide electricity delivery service, and LG&E provides natural gas distribution service, in their respective service territories pursuant to certain franchises, licenses, statutory service areas, easements and other rights or permissions granted by state legislatures, cities or municipalities or other entities. 4 Table of Contents Competition There are currently no other electric public utilities operating within the electric service areas of LG&E and KU.
The rules provide for reduced availability of nitrogen oxide allowances that have historically permitted operational flexibility for fossil units and could potentially result in constraints that may require implementation of additional emission controls or accelerate implementation of lower emission generation technologies.
The rules provide for reduced availability of nitrogen oxide allowances that have historically permitted operational flexibility for fossil units and could potentially result in constraints that may require implementation of additional emission controls or accelerate implementation of lower emission generation technologies. In June 2024, the U.S. Supreme Court issued a stay of the Good Neighbor Plan while the D.C.
Franchises and Licenses RIE provides electricity delivery service and natural gas distribution service in its service territory pursuant to certain franchises, licenses, statutory service areas, easements and other rights or permissions granted by the Rhode Island state legislature, cities or municipalities or other entities.
Franchises and Licenses RIE provides electricity delivery service and natural gas distribution service in its service territory pursuant to certain franchises, licenses, statutory service areas, easements and other rights or permissions granted by the Rhode Island state legislature, cities or municipalities or other entities. 9 Table of Contents Competition There are currently no other electric or gas public utilities operating within the service area of RIE.
Kentucky Pennsylvania Rhode Island Regulated Regulated Regulated For the year ended December 31, 2023: Operating Revenues (in billions) $ 3.5 $ 3.0 $ 1.9 Net Income (in millions) $ 552 $ 519 $ 96 Electricity delivered (GWh) 28,809 35,704 7,174 Natural gas delivered (Bcf) 41 — 38 At December 31, 2023: Regulatory Asset Base (in billions) (a) $ 12.0 $ 9.8 $ 3.2 Service area (in square miles) 8,000 10,000 1,200 Customers (in millions) 1.3 1.5 0.8 (a) Represents capitalization for Kentucky Regulated and rate base for Pennsylvania Regulated and Rhode Island Regulated.
Kentucky Pennsylvania Rhode Island Regulated Regulated Regulated For the year ended December 31, 2024: Operating Revenues (in billions) $ 3.6 $ 2.9 $ 2.0 Net Income (in millions) $ 620 $ 574 $ 109 Electricity delivered (GWh) 30,109 36,611 7,371 Natural gas delivered (Bcf) 42 — 37 At December 31, 2024: Regulatory Asset Base (in billions) (a) $ 12.4 $ 10.2 $ 3.8 Service area (in square miles) 8,000 10,000 1,200 Customers (in millions) 1.4 1.5 0.8 (a) Represents capitalization for Kentucky Regulated and rate base for Pennsylvania Regulated and Rhode Island Regulated.
Without this storage capacity, LG&E would need to purchase additional natural gas and pipeline transportation services during winter months when customer demand increases, and the cost of natural gas supply and pipeline transportation services are expected to be higher. At December 31, 2023, LG&E had 9 Bcf of natural gas stored underground with a carrying value of $34 million.
Without this storage capacity, LG&E would need to purchase additional natural gas and pipeline transportation services during winter months when customer demand increases, and the cost of natural gas supply and pipeline transportation services are expected to be higher.
Combined Management's Discussion and Analysis of Financial Condition and Results of Operations" for information on projected environmental capital expenditures for 2024 through 2026. See Note 19 to the Financial Statements for information related to the impacts of CCRs on AROs.
See "Financial Condition - Liquidity and Capital Resources - Forecasted Uses of Cash - Capital Expenditures" in "Item 7. Combined Management's Discussion and Analysis of Financial Condition and Results of Operations" for information on projected environmental capital expenditures for 2025 through 2027. See Note 18 to the Financial Statements for information related to the impacts of CCRs on AROs.
LG&E and KU operate under a FERC-approved open access transmission tariff. 7 Table of Contents LG&E's and KU's Kentucky base rates are calculated based on a return on capitalization (common equity, long-term debt and short-term debt) including adjustments for certain net investments and costs recovered separately through other means.
LG&E's and KU's Kentucky base rates are calculated based on a return on capitalization (common equity, long-term debt and short-term debt) including adjustments for certain net investments and costs recovered separately through other means. As such, LG&E and KU generally earn a return on regulatory assets in Kentucky.
See Note 7 to the Financial Statements for additional information. Fuel Supply Coal and natural gas are expected to be the predominant fuels used by LG&E and KU for generation for the foreseeable future. Natural gas used for generation is primarily purchased using contractual arrangements separate from LG&E's natural gas distribution operations.
Fuel Supply Coal and natural gas are expected to be the predominant fuels used by LG&E and KU for generation for the foreseeable future. Natural gas used for generation is purchased using contractual arrangements separate from LG&E's natural gas distribution operations. Natural gas and oil are also used for intermediate and peaking capacity and flame stabilization in coal-fired boilers.
Rates LG&E is subject to the jurisdiction of the KPSC and the FERC, and KU is subject to the jurisdiction of the KPSC, the FERC and the VSCC.
Rates LG&E is subject to the jurisdiction of the KPSC and the FERC, and KU is subject to the jurisdiction of the KPSC, the VSCC and the FERC. LG&E and KU operate under a FERC-approved open access transmission tariff.
Pennsylvania's Alternative Energy Portfolio Standard (AEPS) requires electric distribution companies and electricity generation suppliers to obtain from alternative energy resources a portion of the electricity sold to retail customers in Pennsylvania. Under the default service procurement plans approved by the PAPUC, PPL Electric purchases all of the alternative energy generation supply it needs to comply with the AEPS.
Pennsylvania's Alternative Energy Portfolio Standard (AEPS) requires electric distribution companies and electricity generation suppliers to obtain from alternative energy resources a portion of the electricity sold to retail customers in Pennsylvania.
The proposed standards would require phased implementation of carbon mitigation technologies including state-of-the-art efficiency requirements, carbon capture and sequestration, low GHG hydrogen co-firing, and natural gas co-firing. New natural gas EGUs would be immediately subject to the stricter efficiency standard.
In the final rule, the EPA announced it would set performance standards for existing natural gas-fired turbines in a future rule. The standards require phased implementation of carbon mitigation technologies including state-of-the-art efficiency requirements, carbon capture and sequestration, and natural gas co-firing. New natural gas EGUs would be immediately subject to the stricter efficiency standard.
Act 129 created an energy efficiency and conservation program, a demand side management program, smart metering technology requirements, new PLR generation supply procurement rules, remedies for market misconduct and changes to the existing AEPS.
Under the default service procurement plans approved by the PAPUC, PPL Electric purchases all of the alternative energy generation supply it needs to comply with the AEPS. 8 Table of Contents Act 129 created an energy efficiency and conservation program, a demand side management program, smart metering technology requirements, new PLR generation supply procurement rules, remedies for market misconduct and changes to the existing AEPS.
PPL, LG&E, and KU are unable to predict future implementation actions or the outcome of future evaluations by the EPA and the states with respect to the NAAQS standards. In January 2018, the EPA designated Jefferson County, Kentucky (Louisville) as being in nonattainment with the existing 2015 ozone standard.
PPL, LG&E, and KU are unable to predict future implementation actions or the outcome of future evaluations by the EPA and the states with respect to the NAAQS standards.
As such, LG&E and KU generally earn a return on regulatory assets in Kentucky. KU's Virginia base rates are calculated based on a return on rate base (net utility plant plus working capital less accumulated deferred income taxes and miscellaneous deductions).
KU's Virginia base rates are calculated based on a return on rate base (net utility plant plus certain regulatory assets and working capital less accumulated deferred income taxes, certain regulatory liabilities and miscellaneous deductions) and include recovery of applicable operations and maintenance expenses.
Compliance with the NAAQS, CSAPR, Good Neighbor Plan, and related requirements may require installation of additional pollution controls or other compliance actions, inclusive of retirements, the costs of which PPL, LG&E and KU believe would be subject to rate recovery.
Compliance with the NAAQS, CSAPR, Good Neighbor Plan, and related requirements may require installation of additional pollution controls or other compliance actions, inclusive of retirements, the costs of which PPL, LG&E and KU believe would be subject to rate recovery. 12 Table of Contents Modification of Mercury and Air Toxics Standards In 2012, the EPA issued the Mercury and Air Toxics Standards (MATS) rule requiring reductions in mercury and other hazardous air pollutants from fossil fuel-fired power plants.
During 2023, LG&E's and KU's power plants generated the following amounts of electricity: GWh Fuel Source LG&E KU Coal 10,509 13,219 Gas 1,241 4,120 Hydro 272 44 Solar 8 12 Total (a) 12,030 17,395 (a) This generation represents a decrease for LG&E of 4% and a decrease for KU of 8% from 2022 output.
During 2024, LG&E's and KU's power plants generated the following amounts of electricity: GWh Fuel Source LG&E KU Coal 10,046 14,276 Gas 1,586 4,483 Hydro 235 54 Solar 8 12 Total (a) 11,875 18,825 (a) This generation represents a decrease for LG&E of 1% and an increase for KU of 8% from 2023 output.
Combined Management's Discussion and Analysis of Financial Condition and Results of Operations" and Note 7 to the Financial Statements for additional information on current rate proceedings and rate mechanisms. Pennsylvania Regulated Segment (PPL) The Pennsylvania Regulated segment consists of PPL Electric, a regulated public utility engaged in the distribution and transmission of electricity.
See "Financial and Operational Developments" in "Item 7. Combined Management's Discussion and Analysis of Financial Condition and Results of Operations" and Note 7 to the Financial Statements for additional information on current rate proceedings and rate mechanisms.
This plan also includes eight solicitations for alternative energy credits held semiannually in January and July. Through January 2024, six alternative energy credit solicitations have been completed. 9 Table of Contents Pursuant to the plans, PPL Electric contracts for all of the electricity supply for residential, commercial and industrial customers who elect to take default service from PPL Electric.
The new plan also includes solicitations for alternative energy credits held annually in July with the first solicitation in July 2025 and the final solicitation in July 2029. Pursuant to the plans, PPL Electric contracts for all electricity supply for residential, commercial and industrial customers who elect to take default service from PPL Electric.
(PPL and PPL Electric) PPL Electric delivers electricity to approximately 1.5 million customers in a 10,000-square mile territory in 29 counties within eastern and central Pennsylvania. PPL Electric also provides electricity to retail customers in this territory as a PLR under the Customer Choice Act.
Pennsylvania Regulated Segment (PPL) The Pennsylvania Regulated segment consists of PPL Electric, a regulated public utility engaged in the distribution and transmission of electricity. (PPL and PPL Electric) PPL Electric delivers electricity to approximately 1.5 million customers in a 10,000-square mile territory in 29 counties within eastern and central Pennsylvania.
Army Corps of Engineers proposed to repeal the rule and restore the definition of "Waters of the United States" that was in place prior to 2015. On January 24, 2022, the U.S. Supreme Court granted review of a case raising the issue of the appropriate scope of the definition of "Waters of the United States" under the Clean Water Act.
Army Corps of Engineers proposed to repeal the rule and restore the definition of "Waters of the United States" that was in place prior to 2015. On January 18, 2023, the EPA and U.S.
The EPA is continuing review of its previous determinations made in December 2020 to retain the existing NAAQS for ozone without change. PPL, LG&E, and KU are unable to predict the ultimate outcome of pending litigation or future emission reductions that may be required by future federal rules or state implementation actions.
PPL, LG&E, and KU are monitoring ongoing legal and regulatory developments. PPL, LG&E, and KU are unable to predict the ultimate outcome of pending litigation or future emission reductions that may be required by future federal rules or state implementation actions.
PPL, LG&E, and KU are unable to predict the precise impact of new GHG reduction requirements until issuance of final rules and resolution of related legal and regulatory proceedings.
Legal challenges to the rule have been filed in the D.C. Circuit Court. PPL, LG&E, and KU are unable to predict the impact of new GHG reduction requirements until completion of a comprehensive review and resolution of related legal and regulatory proceedings.
While the exact impact will depend on the provisions adopted in the final rule, PPL, LG&E, and KU do not expect significant operational changes or additional controls.
PPL, LG&E, and KU have reviewed the final rule and do not expect significant operational changes or additional controls to be required.
PPL, LG&E, and KU will continue to monitor the ongoing rulemaking process. 13 Table of Contents Proposed Greenhouse Gas Standards On May 11, 2023, the EPA released proposed rules under Section 111 of the Clean Air Act to establish performance standards and emissions limits aimed at reducing GHG emissions from certain new, existing, and modified fossil fuel-fired electric generating units (EGUs).
Greenhouse Gas Standards On May 9, 2024, the EPA issued a final rule under Section 111 of the Clean Air Act which establishes performance standards and emissions limits aimed at reducing GHG emissions from certain new, existing, and modified fossil fuel-fired electric generating units (EGUs).
Last Resort Service is available to all customers who have not elected to receive their electric supply from a non-regulated power producer or any customer who, for any reason, has stopped receiving generation service from a non-regulated power producer.
Last Resort Service (LRS) RIE is required by the RIPUC and by statute to provide LRS to all customers who have not elected to receive their electric supply from a non-regulated power producer or any customer who, for any reason, has stopped receiving generation service from a non-regulated power producer. 10 Table of Contents The charge for LRS is the sum of the applicable LRS charges in addition to all appropriate Retail Delivery charges as stated in the applicable tariff.
On May 25, 2023, the U.S. Supreme Court issued an opinion in Sackett v.
Supreme Court issued an opinion in Sackett v.
When LG&E has excess generation capacity after serving its own customers and its generation cost is lower than that of KU, KU purchases electricity from LG&E and vice versa. Due to environmental requirements and energy efficiency measures, as of December 31, 2023, LG&E and KU have retired approximately 1,200 MW of coal-fired generation plants since 2010.
When LG&E has excess generation capacity after serving its own customers and its generation cost is lower than that of KU, KU purchases electricity from LG&E and vice versa.
Based on the new standard, the EPA could potentially designate Jefferson County, Kentucky (Louisville) as being in nonattainment with the new particulate matter standard and require additional particulate matter reductions from sources including LG&E’s Mill Creek Station. The new particulate matter standard may also result in more stringent requirements for new generation located in nonattainment areas.
N onattainment designations for counties in which LG&E and KU generation is located, including Jefferson County, Kentucky, could potentially require additional particulate matter and nitrogen oxide reductions from sources including LG&E’s Mill Creek Station, and more stringent requirements for new generation.
Competition There are currently no other electric or gas public utilities operating within the service area of RIE. Alternative energy sources such as electricity, oil, propane and other fuels indirectly impact RIE's natural gas revenues. Marketers may also compete to sell natural gas to certain large end-users.
Alternative energy sources such as electricity, oil, propane and other fuels indirectly impact RIE's natural gas revenues. Marketers may also compete to sell natural gas to certain large end-users. RIE's natural gas tariffs include gas price pass-through mechanisms relating to its sale of natural gas as a commodity.
In addition, for attainment of ozone and fine particulates standards, certain states, including Kentucky, are subject to a regional EPA program known as the Cross-State Air Pollution Rule (CSAPR). 12 Table of Contents The Clean Air Act has a significant impact on the operation of fossil fuel generation plants.
States that are found to contribute significantly to another state's nonattainment with ozone standards are required to establish "good neighbor" state implementation plans. In addition, for attainment of ozone and fine particulates standards, certain states, including Kentucky, are subject to a regional EPA program known as the Cross-State Air Pollution Rule (CSAPR).
For their existing units, LG&E and KU expect, for the foreseeable future, to purchase most of their coal from western Kentucky, southern Indiana, southern Illinois, northern West Virginia and western Pennsylvania. LG&E and KU continue to purchase certain quantities of ultra-low sulfur content coal from Wyoming for blending at Trimble County Unit 2.
LG&E and KU continue to purchase certain quantities of ultra-low sulfur content coal from Wyoming for blending at Trimble County Unit 2. Coal is delivered to the generating plants primarily by barge and rail.
The order also authorized LG&E's and KU's entry into the four solar PPAs, subject to certain conditions, but deferred for future proceedings specific decisions on cost recovery treatment or mechanisms. Further, the order approved the new, adjusted or expanded energy efficiency programs contained in the requested 2024-2030 DSM plan.
Brown Generating Station. The order also authorized LG&E's and KU's entry into four potential solar PPAs, subject to certain conditions, but deferred for future proceedings specific decisions on cost recovery treatment or mechanisms. Agreements related to two of the four potential solar 5 Table of Contents PPAs have been terminated.
Virginia, formerly a deregulated jurisdiction, has enacted legislation that implemented a hybrid model of cost-based regulation. KU's operations in Virginia have been and remain regulated. Alternative energy sources such as electricity, oil, propane and other fuels indirectly impact LG&E's natural gas revenues. Marketers may also compete to sell natural gas to certain large end-users.
Alternative energy sources such as electricity, oil, propane and other fuels indirectly impact LG&E's natural gas revenues. Marketers may also compete to sell natural gas to certain large end-users. LG&E's natural gas tariffs include gas price pass-through mechanisms relating to its sale of natural gas as a commodity.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisks Specific to the Rhode Island Regulated Segment ( PPL ) We are subject to operational, regulatory and other risks regarding natural gas supply infrastructure in Rhode Island.
Biggest changeRisks Specific to the Rhode Island Regulated Segment ( PPL ) We are subject to regulatory and other risks regarding natural gas supply infrastructure in Rhode Island. The PHMSA enforces regulations that govern the design, construction, operation and maintenance of pipeline facilities. Failure to comply with these regulations could result in the assessment of fines or penalties against RIE.
Many of these environmental law considerations are also applicable to the operations of our key suppliers or customers, such as coal producers, power producers and industrial power users, and may impact the costs of their products and demand for our services. ( PPL and LG&E ) We are subject to operational, regulatory and other risks regarding natural gas supply infrastructure.
Many of these environmental law considerations are also applicable to the operations of our key suppliers or customers, such as coal producers, power producers and industrial power users, and may impact the costs of their products and demand for our services. ( PPL and LG&E ) We are subject to regulatory and other risks regarding natural gas supply infrastructure.
Depending on the results of integrity tests and other integrity program activities, we could incur significant and unexpected costs to perform remedial activities on our natural gas infrastructure to ensure our continued safe and reliable operation. F.
Depending on the results of integrity tests and other integrity program activities, we could incur significant and unexpected costs to perform remedial activities on our natural gas infrastructure to ensure our continued safe and reliable operation.
The completion of these projects without delays or cost overruns is subject to risks in many areas, including: • approval, licensing and permitting; • land acquisition and the availability of suitable land; 19 Table of Contents • skilled labor or equipment shortages; • construction problems or delays, including disputes with third-party intervenors; • increases in commodity prices or labor rates; • potential supply chain disruptions or delays; and • contractor performance.
The completion of these projects without delays or cost overruns is subject to risks in many areas, including: • approval, licensing and permitting; • land acquisition and the availability of suitable land; • skilled labor or equipment shortages; • construction problems or delays, including disputes with third-party intervenors; 18 Table of Contents • increases in commodity prices or labor rates; • potential supply chain disruptions or delays; and • contractor performance.
At this time, the Registrants’ cannot predict the ways in which and the extent to which these or other pandemic-related factors may affect their business, earnings or other financial results. Our business operations are continually subject to cyber-based security and data integrity risks from vulnerabilities related to our IT systems, operational technology infrastructure and supply chain relationships.
At this time, the Registrants cannot predict the ways in which and the extent to which these or other pandemic-related factors may affect their business, earnings or other financial results. Our business operations are continually subject to cyber-based security and data integrity risks from vulnerabilities related to our IT systems, operational technology infrastructure and supply chain relationships.
Because PPL is a holding company, its debt and guaranty obligations are effectively subordinated to all existing and future liabilities of its subsidiaries. Although certain agreements to which certain subsidiaries are parties limit their ability to incur additional indebtedness, PPL and its subsidiaries retain the ability to incur substantial additional indebtedness and other liabilities.
Because PPL is a holding company, its debt and guaranty obligations are structurally subordinated to all existing and future liabilities of its subsidiaries. Although certain agreements to which certain subsidiaries are parties limit their ability to incur additional indebtedness, PPL and its subsidiaries retain the ability to incur substantial additional indebtedness and other liabilities.
Business," "Item 7. Combined Management's Discussion and Analysis of Financial Condition and Results of Operations" and Note 13 to the Financial Statements for additional information concerning the risks described below and for other risks, uncertainties and factors that could affect our businesses and financial results.
Business," "Item 7. Combined Management's Discussion and Analysis of Financial Condition and Results of Operations" and Note 12 to the Financial Statements for additional information concerning the risks described below and for other risks, uncertainties and factors that could affect our businesses and financial results.
These assumptions include investment returns, interest rates, health care cost 23 Table of Contents trends, inflation rates, benefit improvements, salary increases and the demographics of plan participants. If our assumptions prove to be inaccurate, our future costs and cash contribution requirements to fund these benefits could increase significantly. We may incur liabilities in connection with divestitures.
These assumptions include investment returns, interest rates, health care cost trends, inflation rates, benefit improvements, salary increases and the demographics of plan participants. If our assumptions prove to be inaccurate, our future costs and cash contribution requirements to fund these benefits could increase significantly. We may incur liabilities in connection with divestitures.
In addition, we may incur increased costs for security, including additional physical plant security and security personnel or increased capability following a terrorist incident. 24 Table of Contents We are subject to counterparty performance, credit or other risk in the provision of goods or services to us, which could adversely affect our ability to operate our facilities or conduct business activities.
In addition, we may incur increased costs for security, including additional physical plant security and security personnel or increased capability following a terrorist incident. We are subject to counterparty performance, credit or other risk in the provision of goods or services to us, which could adversely affect our ability to operate our facilities or conduct business activities.
Recent pipeline incidents in the U.S. have also led to the introduction of proposed rules and possible federal legislative actions which could impose restrictions on LG&E’s operations or require more stringent testing to ensure pipeline integrity. Implementation of these regulations could increase our costs to comply with pipeline integrity and safety regulations. D.
Recent pipeline incidents in the U.S. have also led to the introduction of proposed rules and possible federal legislative actions which could impose restrictions on LG&E’s operations or require more stringent testing to ensure pipeline integrity. Implementation of these regulations could increase our costs to comply with pipeline integrity and safety regulations. 19 Table of Contents D.
Although we maintain insurance coverage for certain of these risks, we do not carry insurance for all of these risks and no assurance can be given that such insurance coverage will be sufficient to compensate us in the event losses occur. We are required to obtain, and to comply with, government permits and approvals.
Although we maintain insurance coverage for certain of these risks, we do not carry insurance for all of these risks and no assurance can be given that such insurance coverage will be sufficient to compensate us in the event losses occur. 23 Table of Contents We are required to obtain, and to comply with, government permits and approvals.
The operation of our transmission and distribution systems, including gas distribution systems, as well 21 Table of Contents as our generation plants, are all reliant on cyber-based, complex and integrated technologies. Systemic issues could arise as a result of upgrades to particular software or human error.
The operation of our transmission and distribution systems, including gas distribution systems, as well as our generation plants, are all reliant on cyber-based, complex and integrated technologies. Systemic issues could arise as a result of upgrades to particular software or human error.
As a result, operations could be interrupted, property could be damaged and sensitive customer information lost or stolen, causing us to incur significant losses of revenues, other substantial liabilities and damages, costs to replace or repair damaged equipment and damage to our reputation.
As a result, operations could be interrupted, property could be damaged and sensitive customer information lost or stolen, causing us to incur significant losses of revenues, other substantial liabilities and damages, costs to replace or repair damaged equipment 20 Table of Contents and damage to our reputation.
Economic downturns or periods of high energy supply costs can lead to changes in or the development of legislative and regulatory policy designed to promote reductions in energy consumption and increased energy efficiency, alternative and renewable energy sources, and distributed or self-generation by customers.
Economic downturns or periods of high energy supply costs can lead to changes in or the development of legislative and regulatory policy designed to promote reductions in energy consumption and increased energy efficiency, alternative and renewable energy 21 Table of Contents sources, and distributed or self-generation by customers.
See "Guarantees and Other Assurances" in Note 13 to the Financial Statements. We are subject to liability risks relating to our generation, transmission and distribution operations.
See "Guarantees and Other Assurances" in Note 12 to the Financial Statements. We are subject to liability risks relating to our generation, transmission and distribution operations.
See "Item 7. Combined Management's Discussion and Analysis of Financial Condition and Results of Operations - Financial Condition - Liquidity and Capital Resources - Ratings Triggers" for additional information on the financial impact of a downgrade in our credit ratings.
Combined Management's Discussion and Analysis of Financial Condition and Results of Operations - Financial Condition - Liquidity and Capital Resources - Ratings Triggers" for additional information on the financial impact of a downgrade in our credit ratings.
Credit ratings assigned by Moody's and S&P to our businesses and their financial obligations have a significant impact on the cost of capital incurred by our businesses. A ratings downgrade could increase our short-term borrowing costs and negatively 22 Table of Contents affect our ability to fund liquidity needs and access new long-term debt at acceptable interest rates.
Credit ratings assigned by Moody's and S&P to our businesses and their financial obligations have a significant impact on the cost of capital incurred by our businesses. A ratings downgrade could increase our short-term borrowing costs and negatively affect our ability to fund liquidity needs and access new long-term debt at acceptable interest rates. See "Item 7.
Business and "Regulatory Matters" in Note 7 to the Financial Statements and in "Legal Matters" and "Regulatory Issues" in Note 13 to the Financial Statements. We cannot predict the ultimate outcome of these matters, nor can we reasonably estimate the costs or liabilities that could potentially result from a negative outcome in each case.
Business and "Regulatory Matters" in Note 7 to the Financial Statements and in "Legal Matters" and "Regulatory Issues" in Note 12 to the Financial 22 Table of Contents Statements. We cannot predict the ultimate outcome of these matters, nor can we reasonably estimate the costs or liabilities that could potentially result from a negative outcome in each case.
Risks Related to All Segments ( All Registrants ) Pandemic health events and their impact on business and economic conditions could negatively affect our business. A resurgence, or new variant of COVID-19 or other pandemic health event and related remediation efforts could present challenges to businesses, communities, workforces, markets and supply chains.
Risks Related to All Segments ( All Registrants ) Pandemic health events and their impact on business and economic conditions could negatively affect our business. A pandemic health event and related remediation efforts could present challenges to businesses, communities, workforces, markets and supply chains.
These risks and their consequences could result in increased costs or decreases in the amount of expected revenues and could have a material adverse effect on PPL's business, financial condition and results of operations. ( All Registrants ) B.
These risks and their consequences could result in increased costs or decreases in the amount of expected revenues associated with the 17 Table of Contents Rhode Island Regulated segment and could have a material adverse effect on PPL's business, financial condition and results of operations. ( All Registrants ) B.
Failure to comply with these regulations could result in the assessment of fines or penalties against LG&E. These regulations require, among other things, that pipeline operators take certain measures with respect to pipeline integrity.
The PHMSA enforces regulations that govern the design, construction, operation and maintenance of pipeline facilities. Failure to comply with these regulations could result in the assessment of fines or penalties against LG&E. These regulations require, among other things, that pipeline operators take certain measures with respect to pipeline integrity.
Failure to complete our capital projects on schedule or on budget, or at all, could adversely affect our financial performance, operations and future growth if such expenditures are not granted rate recovery by our regulators. We are or may be subject to costs of remediation of environmental contamination at facilities owned or operated by our former subsidiaries.
Failure to complete our capital projects on schedule or on budget, or at all, could adversely affect our financial performance, operations and future growth if such expenditures are not granted rate recovery by our regulators.
These or other meteorological changes could lead to increased operating costs, capital expenses or power purchase costs. Greenhouse gas regulation could increase the cost of electricity, particularly power generated by fossil fuels, and such increases could have a depressive effect on regional economies.
These or other meteorological changes could lead to increased operating costs, capital expenses or power purchase costs. Greenhouse gas regulation such as the EPA’s May 2024 rule governing emissions from certain fossil fuel-fired electric generating units could increase the cost of electricity, and such increases could have a depressive effect on regional economies.
Depending on the results of integrity tests and other integrity program 20 Table of Contents activities, we could incur significant and unexpected costs to perform remedial activities on our natural gas infrastructure to ensure our continued safe and reliable operation.
These regulations require, among other things, that pipeline operators take certain measures with respect to pipeline integrity. Depending on the results of integrity tests and other integrity program activities, we could incur significant and unexpected costs to perform remedial activities on our natural gas infrastructure to ensure our continued safe and reliable operation. F.
Federal or state agencies, intervenors and other permitted parties may challenge our current or future rate requests, structures or mechanisms, and ultimately reduce, alter or limit the rates we receive.
Federal or state agencies, intervenors and other permitted parties may challenge our current or future rate requests, structures or mechanisms, and ultimately reduce, alter or limit the rates we receive. The requests for rate increases and the frequency of rate cases could face resistance from customers and other stakeholders, especially in a rising cost environment.
PPL may not realize the anticipated benefits of the RIE acquisition, which could materially adversely affect PPL's business, financial condition and results of operations. PPL may not realize the anticipated financial and operational benefits from the RIE acquisition if the business is not integrated in an efficient and effective manner or if integration takes longer than anticipated.
PPL may not realize the anticipated benefits of the RIE acquisition, which could materially adversely affect PPL's business, financial condition and results of operations. PPL may not realize the anticipated financial and operational benefits from the RIE acquisition. PPL has incurred significant costs in connection with the integration, and additional unanticipated costs may arise.
In addition, PPL has incurred, and will continue to incur, significant costs in connection with the integration, and additional unanticipated costs may arise. No assurance can be given that the anticipated benefits from the acquisition will be achieved or, if achieved, the timing of their achievement.
No assurance can be given that the anticipated long-term benefits from the acquisition will be achieved or, if achieved, the timing of their achievement.
Failure to comply with these standards could result in the imposition of fines or civil penalties, and potential exposure to third party claims for alleged violations of the standards. We are subject to risks associated with federal and state tax laws and regulations.
Failure to comply with these standards could result in the imposition of fines or civil penalties, and potential exposure to third party claims for alleged violations of the standards. Artificial intelligence (AI) is an emerging area of technology that has the potential to impact various aspects of our business operations and customer interactions.
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These integration risks include potential difficulties in conversion of systems and information, difficulties in harmonizing inconsistencies in standards, controls, procedures, practices and policies, disruption from the acquisition making it more difficult to maintain relationships with customers, employees or suppliers, and diversion of management time and attention to integration and other acquisition-related 18 Table of Contents issues.
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We are or may be subject to costs of remediation of environmental contamination at facilities that are currently owned by us or that are owned or operated by our former subsidiaries.
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The Biden administration is considering a wide range of potential policies, executive orders, rules, legislation and other initiatives in connection with climate change that may affect these costs.
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In recent years, the federal government has undertaken various efforts aimed at addressing climate change, some of which remain subject to legal challenge, that may affect these costs. The Registrants are unable to predict changes in regulations, regulatory guidance, legal interpretations, policy positions, and implementation actions that may result from the change in Presidential administrations.
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A natural gas pipeline explosion or associated incident could have a significant impact on LG&E’s natural gas operations or result in significant damages and penalties that could have an adverse impact on LG&E’s financial position and results of operations. The Pipeline and Hazardous Materials Safety Administration enforces regulations that govern the design, construction, operation and maintenance of pipeline facilities.
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AI technologies are still in their early stages of development and deployment. Ineffective or inadequate AI development or deployment practices by PPL, its subsidiaries or third-party vendors could result in unintended consequences.
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A natural gas pipeline explosion or associated incident could have a significant impact on RIE's natural gas operations or result in significant damages and penalties that could have an adverse impact on RIE’s financial position and results of operations. The Pipeline and Hazardous Materials Safety Administration enforces regulations that govern the design, construction, operation and maintenance of pipeline facilities.
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While we seek contractual protections with our third-party vendors regarding the use of AI technology, we may not have full awareness of, or control or visibility over, the quality, performance, security or compliance of the products and services that incorporate AI-related technology used by such vendors.
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Failure to comply with these regulations could result in the assessment of fines or penalties against RIE. These regulations require, among other things, that pipeline operators take certain measures with respect to pipeline integrity.
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AI algorithms that we or our third-party vendors use may be flawed or may be based on datasets that are biased or insufficient.
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These limitations or failures, or inaccurate results generated as a result of our employees’, contractors’ or vendors’ use or misuse of AI technologies could lead to operational interruptions or otherwise adversely affect our business, reputation or financial results. Developing, testing, and deploying resource-intensive AI systems may require additional investment and increase our costs.
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In addition, the rapidly evolving nature of AI technologies may cause new laws and regulations to be enacted which could dramatically affect business practices, including the costs to comply with such new laws and regulations. We cannot predict the future development of AI technologies and the nature of any related new laws and regulations, and their costs and consequences.
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Natural disasters or operational accidents may adversely affect the Registrants’ operating results. Natural disasters or operational accidents (such as wildfires, earthquakes, hurricanes or natural gas transmission pipeline explosions) could have direct or indirect impacts on the Registrants or key contractors or suppliers.
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Further, the generation of electricity and the transportation and storage of natural gas involve inherent operating risks that may result in accidents involving serious injury or loss of life, environmental damage or property damage.
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Such events could affect the Registrants through civil or criminal legal proceedings or changes to policies, laws and regulations the compliance costs of which may have a significant impact on the Registrants’ results of operations, financial position and cash flows. Existing insurance policies may not cover all of the potential exposures in connection with such incidents.
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Any losses not covered by insurance, or any increases in the cost of applicable insurance as a result of such incidents, could have a material adverse effect on the results of operations, financial position and cash flows of the Registrants. We are subject to risks associated with federal and state tax laws and regulations.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWhile PPL has not determined any cybersecurity incidents have materially affected the Registrants, including their business strategy, results of operations or financial condition, there can be no guarantee that the Registrants will not be the subject of future, successful attacks, threats or incidents, which may be material.
Biggest changeWhile PPL has not determined any cybersecurity incidents have materially affected the Registrants, including their business strategy, results of operations or financial condition, there can be no guarantee that the Registrants will not be the subject of future attacks, threats or incidents, the consequences of which may be material. 25 Table of Contents See “Risks Related to All Segments – Our business operations are continually subject to cyber-based security and data integrity risks from vulnerabilities related to our IT systems, operational technology infrastructure and supply chain relationships” in “Item 1A.
LG&E is also subject to certain security directives related to cybersecurity issued by the Department of Homeland Security’s Transportation Security Administration in 2021. See Note 13 to the Financial Statements for additional information on these directives. The Registrants have been subject to attempted cybersecurity threats and will likely continue to be subject to such attempts in the future.
LG&E is also subject to certain security directives related to cybersecurity issued by the Department of Homeland Security’s Transportation Security Administration in 2021. See Note 12 to the Financial Statements for additional information on these directives. The Registrants have been subject to attempted cybersecurity threats and will likely continue to be subject to such attempts in the future.
The teams managed by the CSO and VP – Cybersecurity are comprised of seasoned experts in cyber and IT security and possess appropriate experience to safeguard the company’s data, networks and systems, mitigate cyber risks and help prevent and combat cyber threats.
The teams managed by the CSO are comprised of seasoned experts in cyber and IT security and possess appropriate experience to safeguard the company’s data, networks and systems, mitigate cyber risks and help prevent and combat cyber threats.
PPL has established an Executive Crisis Team comprised of PPL’s executive leadership, including the Chief Executive Officer, Chief Financial Officer, Chief Human Resources Officer, Chief Legal Officer, Chief Operating Officer, VP – Public Affairs and Sustainability, VP – Corporate Communications, and additional officers as circumstances may warrant, to allow the company to respond quickly to a crisis, including a cyber event.
PPL has established an Executive Crisis Team comprised of PPL’s executive leadership, including the Chief Executive Officer, Chief Technology and Innovation Officer, Chief Financial Officer, Chief Human Resources Officer, Chief Legal Officer, Chief Operating Officer, VP – Public Affairs and Sustainability, VP – Corporate Communications, Chief Security Officer and additional officers as circumstances may warrant, to allow the company to respond quickly to a crisis, including a cyber event.
PPL’s Board has several Board members with experience in cybersecurity, including one with a certificate in Cyber-Risk Oversight from the National Association of Corporate Directors. 26 Table of Contents A primary function of the Audit Committee is to assist the Board in the oversight of the identification, assessment and management of risk.
PPL’s Board has several Board members with experience in cybersecurity, including one with a certificate in Cyber-Risk Oversight from the National Association of Corporate Directors. A primary function of the Audit Committee is to assist the Board in the oversight of the identification, assessment and management of risk.
The Registrants’ subject matter specialists from across the 25 Table of Contents enterprise provide input and expertise into risk governance processes, including cybersecurity, information technology, legal, compliance, operations, and enterprise risk management.
The Registrants’ subject matter specialists from across the enterprise provide input and expertise into risk governance processes, including cybersecurity, information technology, legal, compliance, operations, and enterprise risk management.
ITEM 1C. CYBERSECURITY (All Registrants) Processes for Identifying, Assessing and Managing Material Risks from Cybersecurity Threats PPL’s Chief Security Officer (CSO) is responsible for establishing PPL’s cyber-risk management strategy for PPL and the other Registrants and reports directly to PPL’s Chief Executive Officer.
ITEM 1C. CYBERSECURITY (All Registrants) Processes for Identifying, Assessing and Managing Material Risks from Cybersecurity Threats PPL’s Chief Security Officer (CSO) is responsible for establishing, implementing and executing PPL’s cyber-risk management strategy for PPL and the other Registrants and reports to PPL’s Executive Vice President and Chief Technology and Innovation Officer.
Oversight of Cybersecurity Risks by the Board of Directors and Management PPL’s Board of Directors oversees the Registrants’ management of cybersecurity risk through various processes identified below.
Risk Factors” for a discussion of cybersecurity risks affecting the Registrants. Oversight of Cybersecurity Risks by the Board of Directors and Management PPL’s Board of Directors oversees the Registrants’ management of cybersecurity risk through various processes identified below.
He is also a member of nationally and internationally recognized industry and security organizations, including the Information Systems Audit and Control Association, International Association of Privacy Professionals, and the Domestic Security Alliance Council. PPL’s VP – Cybersecurity is responsible for implementing and executing the cyber-risk management strategy.
He is also a member of nationally and internationally recognized industry and security organizations, including the Information Systems Audit and Control Association, International Association of Privacy Professionals, and the Domestic Security Alliance Council.
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The VP – Cybersecurity is a seasoned cybersecurity professional with a wealth of experience safeguarding digital assets across multiple industries. He maintains a globally recognized cyber certification and has held multiple certifications in the areas of cyber risk and information control, and actively contributes to industry advancement as a member of national and international industry groups.
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The VP – Cybersecurity chairs the Cybersecurity Governance Council, which governs actions to ensure that the Registrants are effectively managing cybersecurity risks, as well as the Cybersecurity Steering Committee, that drives accountability, establishes work priorities, and directs a portfolio of key cybersecurity projects and initiatives.
Removed
See “Risks Related to All Segments – Our business operations are continually subject to cyber-based security and data integrity risks from vulnerabilities related to our IT systems, operational technology infrastructure and supply chain relationships” in “Item 1A. Risk Factors” for a discussion of cybersecurity risks affecting the Registrants.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeBrown Units 8 - 11 (b) 484 100.00 484 Trimble County Units 5 - 6 318 29.00 92 71.00 226 Trimble County Units 7 - 10 636 37.00 235 63.00 401 Paddy's Run Unit 12 23 100.00 23 Paddy's Run Unit 13 147 53.00 78 47.00 69 Haefling - Units 1 - 2 24 100.00 24 Cane Run Unit 7 662 22.00 146 78.00 516 2,716 754 1,962 Hydro Ohio Falls - Units 1-8 64 100.00 64 Dix Dam - Units 1-3 32 100.00 32 96 64 32 Solar E.W.
Biggest changeBrown Units 8 - 11 (b) 484 100.00 484 Trimble County Units 5 - 6 318 29.00 92 71.00 226 Trimble County Units 7 - 10 636 37.00 235 63.00 401 Paddy's Run Unit 12 23 100.00 23 Paddy's Run Unit 13 147 53.00 78 47.00 69 Haefling - Units 1 - 2 24 100.00 24 Cane Run Unit 7 691 22.00 152 78.00 539 2,745 760 1,985 Hydro Ohio Falls - Units 1-8 64 100.00 64 Dix Dam - Units 1-3 32 100.00 32 96 64 32 26 Table of Contents LG&E KU Primary Fuel/Plant Total MW Capacity Summer % Ownership or Other Interest Ownership or Other Interest in MW % Ownership or Other Interest Ownership or Other Interest in MW Solar E.W.
Substantially all of PPL Electric's distribution properties and certain transmission properties are subject to the lien of the PPL Electric 2001 Mortgage Indenture. See Note 8 to the Financial Statements for additional information. Rhode Island Regulated Segment (PPL) For a description of RIE's service area, see "Item 1.
Substantially all of PPL Electric's distribution properties and certain transmission properties are subject to the lien of the PPL Electric 2001 Mortgage Indenture. See Note 8 to the Financial Statements for additional information. 27 Table of Contents Rhode Island Regulated Segment (PPL) For a description of RIE's service area, see "Item 1.
RIE also has distribution mains for its natural gas system with mileage of 3,227 miles. All of RIE's facilities are located in Rhode Island.
RIE also has distribution mains for its natural gas system with mileage of 3,223 miles. All of RIE's facilities are located in Rhode Island.
See Note 12 to the Financial Statements for additional information. (b) There is an inlet air cooling system attributable to these units.
See Note 11 to the Financial Statements for additional information. (b) There is an inlet air cooling system attributable to these units.
Brown - Unit 3 412 100.00 412 Trimble County - Unit 1 (a) 493 75.00 370 Trimble County - Unit 2 (a) 732 14.25 104 60.75 445 5,021 1,939 2,776 Natural Gas/Oil E.W. Brown Unit 5 (b) 130 53.00 69 47.00 61 E.W. Brown Units 6 - 7 292 38.00 111 62.00 181 E.W.
Brown - Unit 3 412 100.00 412 Trimble County - Unit 1 (a) 493 75.00 370 Trimble County - Unit 2 (a) 732 14.25 104 60.75 445 4,721 1,639 2,776 Natural Gas/Oil E.W. Brown Unit 5 (b) 130 53.00 69 47.00 61 E.W. Brown Units 6 - 7 292 38.00 111 62.00 181 E.W.
Brown Solar (c) 8 39.00 3 61.00 5 Total 7,841 2,760 4,775 (a) Trimble County Unit 1 and Trimble County Unit 2 are jointly owned with Illinois Municipal Electric Agency and Indiana Municipal Power Agency. Each owner is entitled to its proportionate share of the units' total output and funds its proportionate share of capital, fuel and other operating costs.
Brown Solar (c) 8 39.00 3 61.00 5 Total 7,570 2,466 4,798 (a) Trimble County Unit 1 and Trimble County Unit 2 are jointly owned with Illinois Municipal Electric Agency and Indiana Municipal Power Agency. Each owner is entitled to its proportionate share of the units' total output and funds its proportionate share of capital, fuel and other operating costs.
The electricity generating capacity at December 31, 2023 was: LG&E KU Primary Fuel/Plant Total MW Capacity Summer % Ownership or Other Interest Ownership or Other Interest in MW % Ownership or Other Interest Ownership or Other Interest in MW Coal Ghent - Units 1- 4 1,919 100.00 1,919 Mill Creek - Units 1- 4 1,465 100.00 1,465 E.W.
The electricity generating capacity at December 31, 2024 was: LG&E KU Primary Fuel/Plant Total MW Capacity Summer % Ownership or Other Interest Ownership or Other Interest in MW % Ownership or Other Interest Ownership or Other Interest in MW Coal Ghent - Units 1- 4 1,919 100.00 1,919 Mill Creek - Units 2- 4 1,165 100.00 1,165 E.W.
At December 31, 2023, PPL Electric's transmission system includes 52 substations with a total capacity of 32 million kVA and 5,295 circuit miles in service. PPL Electric's distribution system includes 353 substations with a total capacity of 15 million kVA, 36,569 circuit miles of overhead lines and 8,891 underground circuit miles. All of PPL Electric's facilities are located in Pennsylvania.
At December 31, 2024, PPL Electric's transmission system includes 52 substations with a total capacity of 32 million kVA and 5,286 circuit miles in service. PPL Electric's distribution system includes 355 substations with a total capacity of 15 million kVA, 36,628 circuit miles of overhead lines and 9,006 underground circuit miles. All of PPL Electric's facilities are located in Pennsylvania.
Business - General - Segment Information - Rhode Island Regulated Segment." At December 31, 2023, RIE's electric transmission system includes 44 substations with capacity of 33 kVA or higher, 342 circuit miles of overhead lines and 45 underground circuit miles. RIE's electric distribution system includes 59 substations, 5,328 circuit miles of overhead lines and 1,234 underground circuit miles.
Business - General - Segment Information - Rhode Island Regulated Segment." At December 31, 2024, RIE's electric transmission system includes 44 substations with capacity of 33 kVA or higher, 361 circuit miles of overhead lines and 49 underground circuit miles. RIE's electric distribution system includes 59 substations, 6,500 circuit miles of overhead lines and 1,229 underground circuit miles.
Business - General - Segment Information - Kentucky Regulated Segment." At December 31, 2023, LG&E's and KU's electricity transmission and distribution systems and LG&E's natural gas transmission and distribution systems were: 27 Table of Contents LG&E KU Distribution Transmission Distribution Transmission Electricity System Substations (a) 96 78 462 212 Capacity (in millions of kVA) 5 8 8 15 Overhead lines (circuit miles) 3,880 663 14,086 4,064 Underground lines (circuit miles) 2,824 6 2,789 4 Natural Gas System Distribution mains (miles) 4,447 — — — Transmission pipeline (miles) — 234 — — Transmission storage lines (miles) — 95 — — Combustion turbine lines (miles) — 19 — 11 Storage fields — 4 — — Storage field capacity (Bcf) — 11 — — (a) 191 substations (61 at LG&E and 130 at KU) are shared between the distribution and transmission systems.
Business - General - Segment Information - Kentucky Regulated Segment." At December 31, 2024, LG&E's and KU's electricity transmission and distribution systems and LG&E's natural gas transmission and distribution systems were: LG&E KU Distribution Transmission Distribution Transmission Electricity System Substations (a) 97 79 461 215 Capacity (in millions of kVA) 6 8 8 16 Overhead lines (circuit miles) 3,887 663 14,093 4,064 Underground lines (circuit miles) 2,876 6 2,840 4 Natural Gas System Distribution mains (miles) 4,463 — — — Transmission pipeline (miles) — 229 — — Transmission storage lines (miles) — 83 — — Combustion turbine lines (miles) — 19 — 11 Storage fields — 4 — — Storage field capacity (Bcf) — 11 — — (a) 195 substations (62 at LG&E and 133 at KU) are shared between the distribution and transmission systems.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePPL Electric paid common stock dividends to PPL of $323 million in 2023 and $340 million in 2022. Louisville Gas and Electric Company There is no established public trading market for LG&E's common stock, as LKE owns 100% of the outstanding common shares. Dividends paid to LKE on those common shares are determined by LG&E's Board of Directors.
Biggest changePPL Electric paid common stock dividends to PPL of $375 million in 2024 and $323 million in 2023. Louisville Gas and Electric Company There is no established public trading market for LG&E's common stock, as LKE owns 100% of the outstanding common shares. Dividends paid to LKE on those common shares are determined by LG&E's Board of Directors.
There were no purchases by PPL of its common stock during the fourth quarter of 2023. PPL Electric Utilities Corporation There is no established public trading market for PPL Electric's common stock, as PPL owns 100% of the outstanding common shares. Dividends paid to PPL on those common shares are determined by PPL Electric's Board of Directors.
There were no purchases by PPL of its common stock during the fourth quarter of 2024. PPL Electric Utilities Corporation There is no established public trading market for PPL Electric's common stock, as PPL owns 100% of the outstanding common shares. Dividends paid to PPL on those common shares are determined by PPL Electric's Board of Directors.
LG&E paid common stock dividends to LKE of $166 million in 2023 and $275 million in 2022. Kentucky Utilities Company There is no established public trading market for KU's common stock, as LKE owns 100% of the outstanding common shares. Dividends paid to LKE on those common shares are determined by KU's Board of Directors.
LG&E paid common stock dividends to LKE of $187 million in 2024 and $166 million in 2023. Kentucky Utilities Company There is no established public trading market for KU's common stock, as LKE owns 100% of the outstanding common shares. Dividends paid to LKE on those common shares are determined by KU's Board of Directors.
PPL Corporation Additional information for this item is set forth in the sections entitled "Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters" and "Shareowner and Investor Information" of this report. At January 31, 2024 there were 44,305 common stock shareowners of record.
PPL Corporation Additional information for this item is set forth in the sections entitled "Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters" and "Shareowner and Investor Information" of this report. At January 31, 2025 there were 42,122 common stock shareowners of record.
KU paid common stock dividends to LKE of $190 million in 2023 and $296 million in 2022.
KU paid common stock dividends to LKE of $232 million in 2024 and $190 million in 2023.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe changes in the components of the Rhode Island Regulated segment's results between these periods are due to the factors set forth below, which exclude the items that management considers special. 2023 vs. 2022 Operating Revenues $ 753 Energy purchases (293) Other operation and maintenance (180) Depreciation (67) Taxes, other than income (64) Other Income (Expense) - net (3) Interest Expense (43) Income Taxes (16) Earnings from Ongoing Operations 87 Special Items, after-tax 53 Net Income $ 140 • Higher operating revenues in 2023 compared with 2022, primarily due to $796 million resulting from the full year ended December 31, 2023 including a full year of RIE operations compared to the comparable period in 2022, which includes only operations beginning on the acquisition date of May 25, 2022, and a $23 million increase in capital investments, partially offset by a $63 million decrease in energy purchases and other recoveries. • Higher energy purchases in 2023 compared with 2022, primarily due to $354 million resulting from the full year ended December 31, 2023 including a full year of RIE operations compared to the comparable period in 2022, which includes only operations beginning on the acquisition date of May 25, 2022, partially offset by a $62 million decrease in commodity costs. 41 Table of Contents • Higher other operation and maintenance expense in 2023 compared with 2022, primarily due to $186 million resulting from the full year ended December 31, 2023 including a full year of RIE operations compared to the comparable period in 2022, which includes only operations beginning on the acquisition date of May 25, 2022 and a $13 million increase in energy efficiency program expenses, partially offset by $19 million of lower transmission costs. • Higher depreciation in 2023 compared with 2022, primarily due to the results for the full year ended December 31, 2023 including a full year of RIE operations compared to the comparable period in 2022, which includes only operations beginning on the acquisition date of May 25, 2022. • Higher taxes, other than income in 2023 compared with 2022, primarily due to the results for the full year ended December 31, 2023 including a full year of RIE operations compared to the comparable period in 2022, which includes only operations beginning on the acquisition date of May 25, 2022. • Higher interest expense in 2023 compared with 2022, primarily due to $29 million resulting from the full year ended December 31, 2023 including a full year of RIE operations compared to the comparable period in 2022, which includes only operations beginning on the acquisition date of May 25, 2022, and $14 million due to increased borrowings and higher interest rates. • Higher income taxes in 2023 compared to 2022 primarily due to the results for the full year ended December 31, 2023 including a full year of RIE operations compared to the comparable period in 2022, which includes only operations beginning on the acquisition date of May 25, 2022.
Biggest changeThe changes in the components of the Rhode Island Regulated segment's results between these periods are due to the factors set forth below, which exclude the items that management considers special. 2024 vs. 2023 Operating Revenues $ 183 Energy purchases (124) Other operation and maintenance (50) Depreciation (7) Taxes, other than income 12 Other Income (Expense) - net 6 Interest Expense (13) Income Taxes (4) Earnings from Ongoing Operations 3 Special Items, after-tax 10 Net Income $ 13 • Higher operating revenues in 2024 compared to 2023, primarily due to a $175 million increase due to the effects of conforming the presentation of RIE's net metering charges to that of PPL's other operating utilities beginning in 2024, a $46 million increase in recovery of gas maintenance related expenses, a $29 million increase related to capital investments, a $12 million increase related to recovery of transmission expenses and a $15 million increase of other items that were not individually significant, partially offset by a $51 million decrease in recovery of commodity costs, a $24 million decrease in recovery of pension expenses, a $14 million decrease in recovery of gross earnings taxes and a $10 million decrease related to ISR adjustments. • Higher energy purchases in 2024 compared to 2023, primarily due to a $175 million increase related to the effects of conforming the presentation of RIE's net metering charges to that of PPL's other operating utilities beginning in 2024, partially offset by a $51 million decrease in commodity costs. • Higher operation and maintenance expense in 2024 compared to 2023, primarily due to a $46 million increase in gas maintenance related expenses, an $18 million increase in bad debt expenses and a $12 million increase in transmission expenses, partially offset by a $24 million decrease in pension expenses. • Lower taxes, other than income in 2024 compared to 2023, primarily due to a decrease in gross earnings taxes. • Higher interest expense in 2024 compared to 2023, primarily due to increased borrowings. 40 Table of Contents Reconciliation of Earnings from Ongoing Operations The following tables contain after-tax gains (losses), in total, which management considers special items, that are excluded from Earnings from Ongoing Operations, and a reconciliation to PPL's "Net Income" for the years ended December 31. 2024 KY Regulated PA Regulated RI Regulated Corporate and Other Total Net Income (Loss) $ 620 $ 574 $ 109 $ (415) $ 888 Less: Special Items (expense) benefit: Talen litigation costs, net of tax of $1 (a) — — — (2) (2) Strategic corporate initiatives, net of tax of $0, $2, $2 (b) (1) (5) — (5) (11) Acquisition integration, net of tax of $13, $66 (c) — — (46) (250) (296) PPL Electric billing issue, net of tax of $5 (d) — (13) — — (13) FERC transmission credit refund, net of tax of $0 (e) 1 — — — 1 ECR beneficial reuse transition adjustment, net of tax of $2 (f) (4) — — — (4) DER projects impairment, net of tax of $6 (g) — (15) — — (15) IT transformation, net of tax of $5 (h) — — — (22) (22) Total Special Items (4) (33) (46) (279) (362) Earnings from Ongoing Operations $ 624 $ 607 $ 155 $ (136) $ 1,250 (a) PPL incurred legal expenses related to litigation associated with its former affiliate, Talen Montana, LLC and certain affiliated entities.
Circuit Court of Appeals regarding the FERC's orders on the elimination of the mitigation and required transition mechanism. In August 2022, the D.C. Circuit Court of Appeals issued an order remanding the proceedings back to the FERC.
Court of Appeals - D.C. Circuit (D.C. Circuit Court of Appeals) regarding the FERC's orders on the elimination of the mitigation and required transition mechanism. In August 2022, the D.C. Circuit Court of Appeals issued an order remanding the proceedings back to the FERC.
RIE's costs associated with derivatives instruments are recoverable through its RIPUC- approved cost recovery mechanisms. RIE is required to purchase electricity to fulfill its obligation to provide Last Resort Service (LRS). Potential commodity price risk is mitigated through its RIPUC-approved cost recovery mechanisms and full requirements service agreements to serve LRS customers, which transfer the risk to energy suppliers.
RIE's costs associated with derivatives instruments are recoverable through its RIPUC- approved cost recovery mechanisms. RIE is also required to purchase electricity to fulfill its obligation to provide Last Resort Service (LRS). Potential commodity price risk is mitigated through its RIPUC-approved cost recovery mechanisms and full requirements service agreements to serve LRS customers, which transfer the risk to energy suppliers.
(PPL) Advanced Metering Functionality (AMF) In 2021, RIE filed its Updated AMF Business Case and Grid Modernization Plan (GMP) with the RIPUC in accordance with the Amended Settlement Agreement (ASA) approved by the RIPUC in August 2018, and which among other things, sought approval to deploy smart meters throughout the service territory.
Advanced Metering Functionality (AMF) In 2021, RIE filed its Updated AMF Business Case and Grid Modernization Plan (GMP) with the RIPUC in accordance with the Amended Settlement Agreement (ASA) approved by the RIPUC in August 2018, and which among other things, sought approval to deploy smart meters throughout the service territory.
RIE is required to contract through long-term agreements for clean energy supply under the Rhode Island Renewable Energy Growth program and Long-term Clean Energy Standard. Potential commodity price risk is mitigated through its RIPUC-approved cost recovery mechanisms, which true-up cost differences between contract prices and market prices.
Additionally, RIE is required to contract through long-term agreements for clean energy supply under the Rhode Island Renewable Energy Growth program and Long-term Clean Energy Standard. Potential commodity price risk is mitigated through its RIPUC-approved cost recovery mechanisms, which true-up cost differences between contract prices and market prices.
These evaluations considered the excess of fair value over the carrying value of each reporting unit that was calculated during step one of the quantitative impairment tests performed in the fourth quarter of 2022, and the relevant events and circumstances that occurred since those tests were performed including: • current year financial performance versus the prior year, • changes in planned capital expenditures, • the consistency of forecasted free cash flows, • earnings quality and sustainability, • changes in market participant discount rates, • changes in long-term growth rates, • changes in PPL's market capitalization, and • the overall economic and regulatory environments in which these regulated entities operate.
These evaluations considered the excess of fair value over the carrying value of each reporting unit that was calculated during step one of the quantitative impairment tests performed in the fourth quarter of 2022, and the relevant events and circumstances that occurred since those tests were performed including: 59 Table of Contents • current year financial performance versus the prior year, • changes in planned capital expenditures, • the consistency of forecasted free cash flows, • earnings quality and sustainability, • changes in market participant discount rates, • changes in long-term growth rates, • changes in PPL's market capitalization, and • the overall economic and regulatory environments in which these regulated entities operate.
The Registrants can provide no assurances as to the ultimate outcome of future environmental or rate proceedings before regulatory authorities. See "Legal Matters" in Note 13 to the Financial Statements for a discussion of the more significant environmental claims. See "Financial Condition - Liquidity and Capital Resources - Forecasted Uses of Cash - Capital Expenditures" in "Item 7.
The Registrants can provide no assurances as to the ultimate outcome of future environmental or rate proceedings before regulatory authorities. See "Legal Matters" in Note 12 to the Financial Statements for a discussion of the more significant environmental claims. See "Financial Condition - Liquidity and Capital Resources - Forecasted Uses of Cash - Capital Expenditures" in "Item 7.
"Management's Discussion and Analysis of Financial Condition and Results of Operations" includes the following information: • "Overview" provides a description of each Registrant's business strategy and a discussion of important financial and operational developments. • "Results of Operations" for all Registrants includes a "Statement of Income Analysis," which discusses significant changes in principal line items on the Statements of Income, comparing 2023 with 2022.
"Management's Discussion and Analysis of Financial Condition and Results of Operations" includes the following information: • "Overview" provides a description of each Registrant's business strategy and a discussion of important financial and operational developments. • "Results of Operations" for all Registrants includes a "Statement of Income Analysis," which discusses significant changes in principal line items on the Statements of Income, comparing 2024 with 2023.
The Registrants and their subsidiaries have no credit rating triggers that would result in the reduction of access to capital markets or the acceleration of maturity dates of outstanding debt. The following table sets forth the Registrants' and their subsidiaries' credit ratings for outstanding debt securities or commercial paper programs as of December 31, 2023.
The Registrants and their subsidiaries have no credit rating triggers that would result in the reduction of access to capital markets or the acceleration of maturity dates of outstanding debt. The following table sets forth the Registrants' and their subsidiaries' credit ratings for outstanding debt securities or commercial paper programs as of December 31, 2024.
See Notes 1, 7 and 11 to the Financial Statements for additional information about the plans and the accounting for defined benefits. A summary of plan sponsors by Registrant and whether a Registrant or its subsidiaries sponsor (S) or participate in and receives allocations (P) from those plans is shown in the table below.
See Notes 1, 7 and 10 to the Financial Statements for additional information about the plans and the accounting for defined benefits. A summary of plan sponsors by Registrant and whether a Registrant or its subsidiaries sponsor (S) or participate in and receives allocations (P) from those plans is shown in the table below.
Subject to certain exceptions, PPL may not declare or pay any cash dividend or distribution on its capital stock during any period in which PPL Capital Funding defers interest payments on its 2007 Series A Junior Subordinated Notes due 2067. At December 31, 2023, no interest payments were deferred.
Subject to certain exceptions, PPL may not declare or pay any cash dividend or distribution on its capital stock during any period in which PPL Capital Funding defers interest payments on its 2007 Series A Junior Subordinated Notes due 2067. At December 31, 2024, no interest payments were deferred.
Valuation allowances are initially recorded and reevaluated each reporting period by assessing the likelihood of the ultimate realization of a deferred tax asset. Management considers several factors in assessing the expected realization of a deferred tax asset, including the reversal of temporary differences, future taxable income and ongoing prudent and feasible tax planning strategies.
Valuation allowances are initially recorded and reevaluated each reporting period by assessing the likelihood of the ultimate realization of a deferred tax asset. Management considers numerous factors in assessing the expected realization of a deferred tax asset, including the reversal of temporary differences, future taxable income and ongoing prudent and feasible tax planning strategies.
The amounts involved may be material. 54 Table of Contents Rating Agency Actions Moody's and S&P periodically review the credit ratings of the debt of the Registrants and their subsidiaries. Based on their respective independent reviews, the rating agencies may make certain ratings revisions or ratings affirmations.
The amounts involved may be material. 52 Table of Contents Rating Agency Actions Moody's and S&P periodically review the credit ratings of the debt of the Registrants and their subsidiaries. Based on their respective independent reviews, the rating agencies may make certain ratings revisions or ratings affirmations.
The plan-specific cash flows are matched against the coupons and expected maturity values of Aa-rated non-callable (or callable with make-whole provisions) bonds that could be purchased 59 Table of Contents for a hypothetical settlement portfolio.
The plan-specific cash flows are matched against the coupons and 57 Table of Contents expected maturity values of Aa-rated non-callable (or callable with make-whole provisions) bonds that could be purchased for a hypothetical settlement portfolio.
In selecting a rate of compensation increase, plan sponsors consider past experience, the potential impact of movements in inflation rates and expectations of ongoing compensation practices. See Note 11 to the Financial Statements for details of the assumptions selected for pension and other postretirement benefits.
In selecting a rate of compensation increase, plan sponsors consider past experience, the potential impact of movements in inflation rates and expectations of ongoing compensation practices. See Note 10 to the Financial Statements for details of the assumptions selected for pension and other postretirement benefits.
Failure to comply with the covenants after applicable grace periods could result in acceleration of repayment of borrowings and/or termination of the agreements. The Registrants monitor compliance with the covenants on a regular basis. At December 31, 2023, the Registrants were in compliance with these covenants.
Failure to comply with the covenants after applicable grace periods could result in acceleration of repayment of borrowings and/or termination of the agreements. The Registrants monitor compliance with the covenants on a regular basis. At December 31, 2024, the Registrants were in compliance with these covenants.
Additionally, the regulatory agencies can provide flexibility in the manner and timing of recovery of regulatory assets. See Note 7 to the Financial Statements for regulatory assets and regulatory liabilities recorded at December 31, 2023 and 2022, as well as additional information on those regulatory assets and liabilities.
Additionally, the regulatory agencies can provide flexibility in the manner and timing of recovery of regulatory assets. See Note 7 to the Financial Statements for regulatory assets and regulatory liabilities recorded at December 31, 2024 and 2023, as well as additional information on those regulatory assets and liabilities.
(d) The amounts include agreements to purchase goods or services that are enforceable and legally binding and specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction.
(c) The amounts include agreements to purchase goods or services that are enforceable and legally binding and specify all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction.
The following interest rate hedges were outstanding at December 31: 2023 2022 Exposure Hedged Fair Value, Net - Asset (Liability) (a) Effect of a 10% Adverse Movement in Rates (b) Maturities Ranging Through Exposure Hedged Fair Value, Net - Asset (Liability) (a) Effect of a 10% Adverse Movement in Rates (b) PPL and LG&E Economic hedges Interest rate swaps (c) $ 64 $ (7) $ (1) 2033 $ 64 $ (7) $ (1) (a) Includes accrued interest, if applicable.
The following interest rate hedges were outstanding at December 31: 2024 2023 Exposure Hedged Fair Value, Net - Asset (Liability) (a) Effect of a 10% Adverse Movement in Rates (b) Maturities Ranging Through Exposure Hedged Fair Value, Net - Asset (Liability) (a) Effect of a 10% Adverse Movement in Rates (b) PPL and LG&E Economic hedges Interest rate swaps (c) $ 64 $ (3) $ (1) 2033 $ 64 $ (7) $ (1) (a) Includes accrued interest, if applicable.
The unbilled revenue estimates reflect consideration of factors including daily load models, estimated usage for each customer class, the effect of current and different rate schedules, the meter read schedule, the billing schedule, actual weather data, and, where applicable, the impact of weather normalization or other regulatory provisions of rate structures.
The unbilled revenue 60 Table of Contents estimates reflect consideration of factors including daily load models, estimated usage for each customer class, the effect of current and different rate schedules, the meter read schedule, the billing schedule, actual weather data, and, where applicable, the impact of weather normalization or other regulatory provisions of rate structures.
With respect to other sustainability topics that PPL deems relevant to investors but that are not required to be reported under applicable securities law and SEC regulation, PPL will continue each spring to publish its annual sustainability report including tracking reductions related to the company's goal to reduce carbon emissions and post that report on its corporate website at www.pplweb.com and on www.pplsustainability.com.
With respect to other sustainability topics that PPL deems relevant to investors but that are not required to be reported under applicable securities law and SEC regulation, PPL will continue each spring to publish its annual sustainability report including tracking reductions related to the company's goal to reduce carbon emissions and post that report on its corporate website at 56 Table of Contents www.pplweb.com and on www.pplsustainability.com.
These and other environmental requirements led PPL, LG&E and KU to retire approximately 1,200 MW of coal-fired generating plants in Kentucky since 2010 .
These and other environmental requirements led PPL, LG&E and KU to retire approximately 1,500 MW of coal-fired generating plants in Kentucky since 2010 .
LG&E and KU currently receive recovery of certain 32 Table of Contents waivers and credits primarily through base rates increases, provided, however, that increases associated with the FERC's May 18, 2023 order are expected to be subject to future rate proceedings.
LG&E and KU currently receive recovery of certain waivers and credits primarily through base rates increases, provided, however, that increases associated with the FERC's May 18, 2023 order are expected to be subject to future rate proceedings.
As of October 1, 2023, PPL, for its reporting units, and individually, LG&E and KU, elected to perform the qualitative step zero evaluation of goodwill.
As of October 1, 2024, PPL, for its reporting units, and individually, LG&E and KU, elected to perform the qualitative step zero evaluation of goodwill.
Forecasted Sources of Cash (All Registrants) The Registrants expect to continue to have adequate liquidity available from operating cash flows, cash and cash equivalents, credit facilities and commercial paper issuances to meet their requirements with respect to their contractual obligations and anticipated capital expenditures.
Forecasted Sources of Cash (All Registrants) The Registrants expect to continue to have adequate liquidity available from operating cash flows, cash and cash equivalents, credit facilities, commercial paper issuances and debt, hybrid, and equity issuances to meet their requirements with respect to their contractual obligations and anticipated capital expenditures.
(c) Each company pays customary fees under its respective syndicated credit facility. Borrowings generally bear interest at applicable SOFR, plus an applicable margin. (d) Commercial paper issued reflects the undiscounted face value of the issuance. In addition to the financial covenants noted in the table above, the credit agreements governing the above credit facilities contain various other covenants.
(e) Each company pays customary fees under its respective syndicated credit facility. Borrowings generally bear interest at applicable SOFR, plus an applicable margin. (f) Commercial paper issued reflects the undiscounted face value of the issuance. In addition to the financial covenants noted in the table above, the credit agreements governing the above credit facilities contain various other covenants.
Potential commodity price risk is mitigated through its PAPUC-approved cost recovery mechanism and full-requirement supply agreements to serve its PLR customers which transfer the risk to energy suppliers. • LG&E's and KU's rates include certain mechanisms for fuel, fuel-related expenses and energy purchases. In addition, LG&E's rates include a mechanism for natural gas supply costs.
Potential commodity price risk is mitigated through its PAPUC-approved cost recovery mechanism and full-requirement supply agreements to serve its PLR customers which transfer the risk to energy suppliers. 54 Table of Contents • LG&E's and KU's rates include certain mechanisms for fuel, fuel-related expenses and energy purchases. In addition, LG&E's rates include a mechanism for natural gas supply costs.
In 2019, the FERC granted LG&E's and KU's request to remove the ongoing credits, conditioned upon the implementation by LG&E and KU of a transition mechanism for certain existing power supply arrangements, which was subsequently filed, modified, and approved by the FERC in 2020 and 2021. In 2020, LG&E and KU and other parties filed appeals with the D.C.
In 2019, the FERC granted LG&E's and KU's request to remove the ongoing credits, conditioned upon the implementation by LG&E and KU of a transition mechanism for certain existing power supply arrangements, which was subsequently filed, modified, and approved by the FERC in 2020 and 2021. In 2020, LG&E and KU and other parties filed appeals with the U.S.
(PPL, LG&E and KU) Environmental Considerations for Coal-Fired Generation The businesses of LG&E and KU are subject to extensive federal, state and local environmental laws, rules and regulations, including those pertaining to CCRs, GHG, and ELGs. See Notes 7 , 13 and 19 to the Financial Statements for a discussion of these significant environmental matters.
(PPL, LG&E and KU) Environmental Considerations for Coal-Fired Generation The businesses of LG&E and KU are subject to extensive federal, state and local environmental laws, rules and regulations, including those pertaining to CCRs, GHG, and ELGs. See Notes 7 , 12 and 18 to the Financial Statements for a discussion of these significant environmental matters.
Neither the information in such annual sustainability report nor the information at such websites is incorporated in this Form 10-K by reference, and it should not be considered a part of this Form 58 Table of Contents 10-K.
Neither the information in such annual sustainability report nor the information at such websites is incorporated in this Form 10-K by reference, and it should not be considered a part of this Form 10-K.
Primarily includes, as applicable, the purchase obligations of electricity, coal, natural gas and limestone, as well as certain construction expenditures, which are also included in the Capital Expenditures discussion above. (e) Represents contracts to purchase coal, natural gas and natural gas transportation. See Note 13 to the Financial Statements for additional information.
Primarily includes, as applicable, the purchase obligations of electricity, coal, natural gas and limestone, as well as certain construction expenditures, which are also included in the Capital Expenditures discussion above. (d) Represents contracts to purchase coal, natural gas and natural gas transportation. See Note 12 to the Financial Statements for additional information.
See Note 17 to the Financial Statements for a discussion of "Credit Risk-Related Contingent Features," including a discussion of the potential additional collateral requirements for derivative contracts in a net liability position at December 31, 2023. Guarantees for Subsidiaries (PPL) PPL guarantees certain consolidated affiliate financing arrangements.
See Note 16 to the Financial Statements for a discussion of "Credit Risk-Related Contingent Features," including a discussion of the potential additional collateral requirements for derivative contracts in a net liability position at December 31, 2024. Guarantees for Subsidiaries (PPL) PPL guarantees certain consolidated affiliate financing arrangements.
For comparison of the Registrants’ results of operations and cash flows for the years ended December 31, 2022 to December 31, 2021, refer to “Item 7. Combined Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the 2022 Form 10-K, filed with the SEC on February 17, 2023.
For comparison of the Registrants’ results of operations and cash flows for the years ended December 31, 2023 to December 31, 2022, refer to “Item 7. Combined Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the 2023 Form 10-K, filed with the SEC on February 16, 2024.
(f) Represents future minimum payments under OVEC power purchase agreements through June 2040. See Note 13 to the Financial Statements for additional information. (g) Represents construction commitments, which are also reflected in the Capital Expenditures table presented above.
(e) Represents future minimum payments under OVEC power purchase agreements through June 2040. See Note 12 to the Financial Statements for additional information. (f) Represents construction commitments, which are also reflected in the Capital Expenditures table presented above.
(b) The decreases were primarily due to weather, along with other lower usage in 2023 at PPL Electric. (c) The decrease was primarily due to the result of fewer PLR customers, lower customer volumes due to weather and other lower usage, partially offset by higher energy prices.
(b) The increases were primarily due to weather, along with other higher usage in 2024 at PPL Electric. (c) The decrease was primarily the result of lower energy prices and fewer PLR customers, partially offset by higher customer volumes due to weather and other higher usage.
See "Long-Lived and Intangible Assets - Asset Retirement Obligations" in Note 1, Note 7 and Note 19 to the Financial Statements for additional information on AROs. At December 31, 2023, the total recorded balances and information on the most significant recorded AROs were as follows.
See "Long-Lived and Intangible Assets - Asset Retirement Obligations" in Note 1, Note 7 and Note 18 to the Financial Statements for additional information on AROs. At December 31, 2024, the total recorded balances and information on the most significant recorded AROs were as follows.
A variance in the assumptions could significantly impact accrued defined benefit liabilities or assets, reported annual net periodic defined benefit costs and AOCI or regulatory assets and liabilities. The following tables reflect changes in certain assumptions based on the Registrants' primary defined benefit plans.
A variance in the assumptions could significantly impact accrued defined benefit liabilities or assets, reported annual net periodic defined benefit costs and AOCI or regulatory assets and liabilities. The following tables reflect changes in certain assumptions based on the Registrants' primary qualified defined benefit pension and other postretirement benefit plans.
Senior Unsecured Senior Secured Commercial Paper Issuer Moody's S&P Moody's S&P Moody's S&P PPL PPL Capital Funding Baa1 BBB+ P-2 A-2 Rhode Island Energy A3 A- P-2 A-2 PPL and PPL Electric PPL Electric A1 A+ P-2 A-1 PPL, LG&E and KU LG&E A1 A P-2 A-2 KU A1 A P-2 A-2 The rating agencies have taken the following actions related to the Registrants and their subsidiaries.
Senior Unsecured Senior Secured Commercial Paper Issuer Moody's S&P Moody's S&P Moody's S&P PPL PPL Capital Funding Baa1 BBB+ P-2 A-2 Rhode Island Energy A3 A- P-2 A-2 PPL and PPL Electric PPL Electric A1 A+ P-2 A-1 PPL, LG&E and KU LG&E A1 A P-2 A-2 KU A1 A P-2 A-2 Since June 2023, the rating agencies have not taken rating actions related to the Registrants and their subsidiaries.
Results of Operations (PPL) The "Statement of Income Analysis" discussion below describes significant changes in principal line items on the Statements of Income, comparing 2023 with 2022. The "Segment Earnings" discussions provides a review of results by reportable segment.
Results of Operations (PPL) The "Statement of Income Analysis" discussion below describes significant changes in principal line items on the Statements of Income, comparing 2024 with 2023. The "Segment Earnings" discussions provide a review of results by reportable segment.
Circuit Court of Appeals, and provided refunds in accordance with the FERC order on December 1, 2023. The FERC issued an order on LG&E and KU’s compliance filing on November 16, 2023, and LG&E and KU filed a petition for review of this November 16 order on February 14, 2024. The proceedings at the D.C.
Circuit Court of Appeals and provided refunds in accordance with the FERC order on December 1, 2023. The FERC issued an order on LG&E's and KU's compliance filing on November 16, 2023, and LG&E and KU filed a petition for review of this November 16, 2023 order on February 14, 2024.
RIE’s borrowing sublimit is adjustable, at the borrowers’ option, from $0 to $600 million, with the remaining balance of the $1.25 billion available under the facility allocated to PPL Capital Funding. At December 31, 2023, PPL Capital Funding had $365 million of commercial paper outstanding and RIE had $25 million of commercial paper outstanding.
RIE’s borrowing sublimit is adjustable, at the borrowers’ option, from $0 to $600 million, with the remaining balance of the $1.25 billion available under the facility allocated to PPL Capital Funding. At December 31, 2024, PPL Capital Funding had $138 million of commercial paper outstanding and RIE had no commercial paper outstanding.
As a result of environmental requirements and aging infrastructure, LG&E has sought and obtained approval to retire two older coal-fired units at the Mill Creek Plant. Mill Creek Unit 1, with 300 MW of capacity, is expected to be retired in 2024.
As a result of environmental requirements and aging infrastructure, LG&E has sought and obtained approval to retire two older coal-fired units at the Mill Creek Plant. Mill Creek Unit 1, with 300 MW of capacity, was retired in 2024. Mill Creek Unit 2, with 297 MW of capacity, is expected to be retired in 2027, subject to certain conditions.
On February 16, 2024, PPL announced a quarterly common stock dividend of 25.75 cents per share, payable April 1, 2024, to shareowners of record as of March 8, 2024. Future dividends will be declared at the discretion of the Board of Directors and will depend upon future earnings, cash flows, financial and legal requirements and other factors.
On February 13, 2025, PPL announced a quarterly common stock dividend of 27.25 cents per share, payable April 1, 2025, to shareowners of record as of March 10, 2025. Future dividends will be declared at the discretion of the Board of Directors and will depend upon future earnings, cash flows, financial and legal requirements and other factors.
Combined Management's Discussion and Analysis of Financial Condition and Results of Operations" for information on projected environmental capital expenditures for 2024 through 2026. See Note 19 to the Financial Statements for information related to the impacts of CCRs on AROs. See "Item 1. Business - Environmental Matters" for additional information.
Combined Management's Discussion and Analysis of Financial Condition and Results of Operations" for information on projected environmental capital expenditures for 2025 through 2027. See Note 18 to the Financial Statements for information related to the impacts of CCRs on AROs. See "Item 1. Business - Environmental Matters" for additional information.
Dividends/Distributions (PPL) PPL views dividends as an integral component of shareowner return and expects to continue to pay dividends in amounts intended to maintain a capitalization structure that supports investment grade credit ratings. In November 2023, PPL declared its quarterly common stock dividend, payable January 2, 2024, at 24.00 cents per share (equivalent to $0.96 per annum).
Dividends/Distributions (PPL) PPL views dividends as an integral component of shareowner return and expects to continue to pay dividends in amounts intended to maintain a capitalization structure that supports investment grade credit ratings. In November 2024, PPL declared its quarterly common stock dividend, payable January 2, 2024, at 25.75 cents per share (equivalent to $1.03 per annum).
(d) Primarily final closing and other related adjustments for the sale of Safari Holdings. (e) Certain expenses related to billing issues. See Note 7 to the Financial Statements for additional information. (f) Prior period impact related to a FERC refund order. See Note 7 to the Financial Statements for additional information.
(d) Primarily final closing and other related adjustments for the sale of Safari Holdings. (e) Certain expenses related to billing issues. See Note 7 to the Financial Statements for additional information. (f) Prior period impact related to a FERC refund order. (g) Prior period impact of a methodology change in determining unbilled revenues.
Capital Expenditures The table below shows the Registrants' current capital expenditure projections for the years 2024 through 2026. Expenditures for the domestic regulated utilities are expected to be recovered through rates, pending regulatory approval.
Capital Expenditures The table below shows the Registrants' current capital expenditure projections for the years 2025 through 2027. Expenditures for the regulated utilities are expected to be recovered through rates, pending regulatory approval.
In addition, certain of these private groups have advocated that the SEC promulgate regulations requiring specific sustainability reporting under the Securities Exchange Act of 1934, as amended (the ’34 Act), or that issuers voluntarily include certain sustainability disclosure in their ’34 Act reports. In March 2022, the SEC proposed broad-based climate disclosure requirements for public companies.
In addition, certain of these private groups have advocated that the SEC promulgate regulations requiring specific sustainability reporting under the Securities Exchange Act of 1934, as amended (the ’34 Act), or that issuers voluntarily include certain sustainability disclosure in their ’34 Act reports. In March 2024, the SEC finalized climate disclosure rules for public companies.
See "Long-Lived and Intangible Assets - Asset Impairment (Excluding Investments)" in Note 1 to the 61 Table of Contents Financial Statements for further discussion of goodwill impairment tests. See Note 18 to the Financial Statements for information on goodwill balances by reportable segment at December 31, 2023.
See "Long-Lived and Intangible Assets - Asset Impairment (Excluding Investments)" in Note 1 to the Financial Statements for further discussion of goodwill impairment tests. See Note 17 to the Financial Statements for information on goodwill balances by reportable segment at December 31, 2024.
At this time, the Registrants believe that these covenants and other borrowing conditions will not limit access to these funding sources. See Note 8 to the Financial Statements for further discussion of the Registrants' credit facilities.
As of December 31, 2024, the Registrants believe that these covenants and other borrowing conditions will not limit access to these funding sources. See Note 8 to the Financial Statements for further discussion of the Registrants' credit facilities.
As has been PPL’s practice, to the extent sustainability issues have or may have a material impact on the Registrants’ financial condition or results of operation, PPL discloses such matters in accordance with applicable securities law and SEC regulations.
PPL cannot predict the final legal requirements or when the requirements will be effective. As has been PPL’s practice, to the extent sustainability issues have or may have a material impact on the Registrants’ financial condition or results of operation, PPL discloses such matters in accordance with applicable securities law and SEC regulations.
See Note 13 to the Financial Statements for additional information about guarantees. 55 Table of Contents Other Contingent Obligations (All Registrants) The Registrants have entered into certain agreements that may contingently require payment to a guaranteed or indemnified party. See Note 13 to the Financial Statements for a discussion of these agreements.
See Note 12 to the Financial Statements for additional information about guarantees. Other Contingent Obligations (All Registrants) The Registrants have entered into certain agreements that may contingently require payment to a guaranteed or indemnified party.
At December 31, 2023, a 10% increase to retirement cost would increase these ARO liabilities by $7 million at LG&E and $11 million at KU.
At December 31, 2024, a 10% increase to retirement cost would increase these ARO liabilities by $8 million at LG&E and $8 million at KU.
Most Significant AROs Total ARO Recorded Amount Recorded % of Total Description LG&E $ 85 $ 63 74 Ponds, landfills and natural gas mains KU 66 37 56 Ponds and landfills The most significant assumptions surrounding AROs are the forecasted retirement costs (including settlement dates and the timing of cash flows), discount and inflation rates.
Most Significant AROs Total ARO Recorded Amount Recorded % of Total Description LG&E $ 84 $ 63 75 Ponds, landfills and natural gas mains KU 64 35 55 Ponds and landfills The most significant assumptions surrounding AROs are the forecasted retirement costs (including settlement dates and the timing of cash flows), discount and inflation rates.
(b) The decrease was primarily due to weather and other lower usage in 2023. 43 Table of Contents (c) The decrease was primarily due to the result of fewer PLR customers, lower customer volumes due to weather and other lower usage, partially offset by higher energy prices.
(b) The increase was primarily due to weather, along with other higher usage in 2024. (c) The decrease was primarily the result of lower energy prices and fewer PLR customers, partially offset by higher customer volumes due to weather and other higher usage.
Reconciliation of Earnings from Ongoing Operations The following tables contain after-tax gains (losses), in total, which management considers special items, that are excluded from Earnings from Ongoing Operations, and a reconciliation to PPL's "Net Income" for the years ended December 31. 2023 KY Regulated PA Regulated RI Regulated Corporate and Other Total Net Income (Loss) $ 552 $ 519 $ 96 $ (427) $ 740 Less: Special Items (expense) benefit: Talen litigation costs, net of tax of $26 (a) — — — (99) (99) Strategic corporate initiatives, net of tax of $0, $1, $3 (b) (1) (2) — (10) (13) Acquisition integration, net of tax of $14, $58 (c) — — (56) (218) (274) Sale of Safari Holdings, net of tax of $0 (d) — — — (4) (4) PPL Electric billing issue, net of tax of $10 (e) — (24) — — (24) FERC transmission credit refund, net of tax of $2 (f) (6) — — — (6) Unbilled revenue estimate adjustment, net of tax of $2 (g) (5) — — — (5) Other non-recurring charges, net of tax of $1, $0 (h) — (3) — (15) (18) Total Special Items (12) (29) (56) (346) (443) Earnings from Ongoing Operations $ 564 $ 548 $ 152 $ (81) $ 1,183 (a) PPL incurred legal expenses related to litigation and settlement with its former affiliate, Talen Montana.
(h) Costs associated with PPL’s restructuring and rebuilding of its IT infrastructure, organization and systems. 2023 KY Regulated PA Regulated RI Regulated Corporate and Other Total Net Income (Loss) $ 552 $ 519 $ 96 $ (427) $ 740 Less: Special Items (expense) benefit: Talen litigation costs, net of tax of $26 (a) — — — (99) (99) Strategic corporate initiatives, net of tax of $0, $1, $3 (b) (1) (2) — (10) (13) Acquisition integration, net of tax of $14, $58 (c) — — (56) (218) (274) Sale of Safari Holdings, net of tax of $0 (d) — — — (4) (4) PPL Electric billing issue, net of tax of $10 (e) — (24) — — (24) FERC transmission credit refund, net of tax of $2 (f) (6) — — — (6) Unbilled revenue estimate adjustment, net of tax of $2 (g) (5) — — — (5) Other non-recurring charges, net of tax of $1, $0 (h) — (3) — (15) (18) Total Special Items (12) (29) (56) (346) (443) Earnings from Ongoing Operations $ 564 $ 548 $ 152 $ (81) $ 1,183 (a) PPL incurred legal expenses related to litigation and settlement with its former affiliate, Talen Montana, LLC and certain affiliated entities.
In addition, costs may increase significantly if the requirements or scope of environmental laws or regulations, or similar rules, are expanded or changed. Costs may take the form of increased capital expenditures or operating and maintenance expenses, monetary fines, penalties or other restrictions.
The costs of compliance or alleged non-compliance cannot be predicted with certainty but could be significant. In addition, costs may increase significantly if the requirements or scope of environmental laws or regulations, or similar rules, are expanded or changed. Costs may take the form of increased capital expenditures or operating and maintenance expenses, monetary fines, penalties or other restrictions.
The following commercial paper programs were in place at: December 31, 2023 Capacity Commercial Paper Issuances (b) Unused Capacity PPL Capital Funding (a) $ 1,350 $ 365 $ 985 Rhode Island Energy (a) 400 25 375 PPL Electric 650 510 140 LG&E 500 — 500 KU 400 93 307 Total PPL $ 3,300 $ 993 $ 2,307 (a) Issuances under the PPL Capital Funding and RIE commercial paper programs are supported by the PPL Capital Funding syndicated credit facility, which has a total capacity of $1.25 billion, with a $250 million borrowing sublimit for RIE and a $1 billion sublimit for PPL Capital Funding at December 31, 2023.
The following commercial paper programs were in place at: December 31, 2024 Capacity Commercial Paper Issuances (b) Unused Capacity PPL Capital Funding (a) $ 1,350 $ 138 $ 1,212 Rhode Island Energy (a) 250 — 250 PPL Electric 650 — 650 LG&E 500 25 475 KU 400 140 260 Total PPL $ 3,150 $ 303 $ 2,847 (a) Issuances under the PPL Capital Funding and RIE commercial paper programs are supported by the PPL Capital Funding syndicated credit facility, which at December 31, 2024, had a total capacity of $1.25 billion, with a $250 million borrowing sublimit for RIE and a $1 billion sublimit for PPL Capital Funding at December 31, 2024.
At December 31, 2023, the total committed borrowing capacity under credit facilities and the borrowings under these facilities were: External Committed Capacity Borrowed Letters of Credit and Commercial Paper Issued (d) Unused Capacity PPL Capital Funding Credit Facilities (a) $ 1,350 $ — $ 390 $ 960 PPL Electric Credit Facilities 650 — 511 139 LG&E Credit Facilities 500 — — 500 KU Credit Facilities 400 — 93 307 Total Credit Facilities (b) (c) $ 2,900 $ — $ 994 $ 1,906 (a) Includes a $1.25 billion syndicated credit facility with a $250 million borrowing sublimit for RIE and a $1 billion sublimit for PPL Capital Funding at December 31, 2023.
At December 31, 2024, the total committed borrowing capacity under credit facilities and the borrowings under these facilities were: External Committed Capacity Borrowed Letters of Credit and Commercial Paper Issued (f) Unused Capacity PPL Capital Funding Credit Facilities (a) $ 1,350 $ — $ 138 $ 1,212 PPL Electric Credit Facilities (b) 650 — 1 649 LG&E Credit Facilities (c) 500 — 25 475 KU Credit Facilities (c) 400 — 140 260 Total Credit Facilities (d) (e) $ 2,900 $ — $ 304 $ 2,596 (a) Includes a $1.25 billion syndicated credit facility with a $250 million borrowing sublimit for RIE and a $1 billion sublimit for PPL Capital Funding at December 31, 2024.
See "Forecasted Sources of Cash" for a discussion of the Registrants' plans to issue debt and equity securities, as well as a discussion of credit facility capacity available to the Registrants.
See "Long-term Debt and Equity Securities" below for additional information on current year activity. See "Forecasted Sources of Cash" for a discussion of the Registrants' plans to issue debt and equity securities, as well as a discussion of credit facility capacity available to the Registrants.
Projected Total 2024 (a) 2025 2026 PPL Generating facilities $ 2,200 $ 625 $ 850 $ 725 Electric distribution facilities 3,275 1,075 1,125 1,075 Gas distribution facilities 1,050 300 375 375 Transmission facilities 3,700 1,000 1,275 1,425 Other 350 125 125 100 Total Capital Expenditures $ 10,575 $ 3,125 $ 3,750 $ 3,700 52 Table of Contents Projected Total 2024 (a) 2025 2026 PPL Electric Electric distribution facilities $ 1,325 $ 500 $ 425 $ 400 Transmission facilities 2,300 675 800 825 Total Capital Expenditures $ 3,625 $ 1,175 $ 1,225 $ 1,225 LG&E Generating facilities $ 1,050 $ 250 $ 450 $ 350 Electric distribution facilities 500 150 175 175 Gas distribution facilities 300 75 125 100 Transmission facilities 150 50 50 50 Other 125 50 50 25 Total Capital Expenditures $ 2,125 $ 575 $ 850 $ 700 KU Generating facilities $ 1,150 $ 375 $ 400 $ 375 Electric distribution facilities 625 175 225 225 Transmission facilities 450 75 125 250 Other 225 75 75 75 Total Capital Expenditures $ 2,450 $ 700 $ 825 $ 925 (a) The 2024 total excludes amounts included in accounts payable as of December 31, 2023.
Projected Total 2025 (a) 2026 2027 PPL Generating facilities $ 3,875 $ 975 $ 1,200 $ 1,700 Electric distribution facilities 4,925 1,400 1,825 1,700 Gas distribution facilities 1,125 400 350 375 Transmission facilities 4,475 1,300 1,600 1,575 Other 600 250 225 125 Total Capital Expenditures $ 15,000 $ 4,325 $ 5,200 $ 5,475 PPL Electric Electric distribution facilities $ 2,525 $ 650 $ 975 $ 900 Transmission facilities 2,550 850 875 825 Total Capital Expenditures $ 5,075 $ 1,500 $ 1,850 $ 1,725 50 Table of Contents Projected Total 2025 (a) 2026 2027 LG&E Generating facilities $ 2,275 $ 475 $ 625 $ 1,175 Electric distribution facilities 600 175 200 225 Gas distribution facilities 400 175 100 125 Transmission facilities 275 75 75 125 Other 300 125 125 50 Total Capital Expenditures $ 3,850 $ 1,025 $ 1,125 $ 1,700 KU Generating facilities $ 1,600 $ 500 $ 575 $ 525 Electric distribution facilities 750 225 275 250 Transmission facilities 875 175 350 350 Other 300 125 100 75 Total Capital Expenditures $ 3,525 $ 1,025 $ 1,300 $ 1,200 (a) The 2025 total excludes amounts included in accounts payable as of December 31, 2024.
RIE’s borrowing sublimit is adjustable, at the borrowers’ option, from $0 to $600 million, with the remaining balance of the $1.25 billion available under the facility allocated to PPL Capital Funding. On January 5, 2024, the borrowing sublimits under the facility were reallocated to $400 million at RIE and $850 million at PPL Capital Funding.
RIE’s borrowing sublimit is adjustable, at the borrowers’ option, from $0 to $600 million, with the remaining balance of the $1.25 billion available under the facility allocated to PPL Capital Funding.
Intercompany (LG&E and KU) Committed Capacity Borrowed Commercial Paper Issued Unused Capacity LG&E Money Pool (a) $ 750 $ — $ — $ 750 KU Money Pool (a) 650 — 93 557 (a) LG&E and KU participate in an intercompany money pool agreement whereby LKE and/or KU make available to LG&E, and LKE and/or LG&E make available to KU funds up to the difference between LG&E's and KU's FERC borrowing limit and LG&E's and KU's commercial paper capacity limit, at an interest rate based on the lower of a market index of commercial paper issues and two additional rate options based on the lower of a market index of commercial paper issues and two additional rate options based on SOFR.
Intercompany (LG&E and KU) Committed Capacity Borrowed Commercial Paper Issued Unused Capacity LG&E Money Pool (a) $ 750 $ 43 $ 25 $ 682 KU Money Pool (a) 650 73 140 437 (a) LG&E and KU participate in an intercompany money pool agreement whereby LKE and/or KU make available to LG&E, and LKE and/or LG&E make available to KU funds up to the difference between LG&E's and KU's FERC borrowing limit and LG&E's and KU's commercial paper capacity limit, at an interest rate based on the lower of a market index of commercial paper issues and two additional rate options based on the lower of a market index of commercial paper issues and two additional rate options based on SOFR. 49 Table of Contents See Note 13 to the Financial Statements for further discussion of intercompany credit facilities.
See Note 13 to the Financial Statements for additional information. (b) Represents costs primarily related to PPL's centralization efforts and other strategic efforts. (c) Rhode Island Regulated primarily includes certain TSA costs for IT systems that will not be part of PPL's ongoing operations. Corporate and Other primarily includes integration and related costs associated with the acquisition of RIE.
(b) Represents costs primarily related to PPL's centralization and other strategic efforts. (c) Rhode Island Regulated primarily includes certain transition services agreement costs for IT systems that will not be part of PPL's ongoing operations. Corporate and Other primarily includes integration and related costs associated with the acquisition of RIE. (d) Certain expenses related to billing issues.
The payments herein are subject to change, as payments for debt that is or becomes variable-rate debt have been estimated. (c) See Note 10 to the Financial Statements for additional information.
The payments herein are subject to change, as payments for debt that is or becomes variable-rate debt have been estimated.
Long-term Debt and Equity Securities Long-term debt and equity securities activity for 2023 included: Debt Stock Issuances (a) Retirements Issuances (b) Repurchases Cash Flow Impact: PPL $ 3,252 $ 1,854 $ 5 $ — PPL Electric 1,329 1,240 — — LG&E 464 300 — — KU 459 313 — — (a) Issuances are net of pricing discounts, where applicable, and exclude the impact of debt issuance costs.
Long-term Debt and Equity Securities Long-term debt and equity securities activity for 2024 included: Debt Stock Issuances (a) Retirements Issuances (b) Repurchases Cash Flow Impact: PPL $ 1,894 $ — $ 9 $ — PPL Electric 649 — — — LG&E — — — — KU — — — — (a) Issuances are net of pricing discounts, where applicable, and exclude the impact of debt issuance costs.
See Note 14 to the Financial Statements for further discussion of intercompany credit facilities. Commercial Paper (All Registrants) The Registrants maintain commercial paper programs to provide an additional financing source to fund short-term liquidity needs, as necessary. Commercial paper issuances, included in "Short-term debt" on the Balance Sheets, are supported by the respective Registrant's credit facilities.
Commercial Paper (All Registrants) The Registrants, PPL Capital Funding and RIE maintain commercial paper programs to provide an additional financing source to fund short-term liquidity needs, as necessary. Commercial paper issuances, included in "Short-term debt" on the Balance Sheets, are supported by the respective Registrant's credit facilities.
FERC Transmission Rate Filing In 2018, LG&E and KU applied to the FERC requesting elimination of certain on-going waivers and credits to a sub-set of transmission customers relating to the 1998 merger of LG&E's and KU's parent entities and the 2006 withdrawal of LG&E and KU from the Midcontinent Independent System Operator, Inc.
See Note 7 to the Financial Statements for additional information on the Mill Creek Unit 1 RAR rider application. 31 Table of Contents FERC Transmission Rate Filing In 2018, LG&E and KU applied to the FERC requesting elimination of certain on-going waivers and credits to a sub-set of transmission customers relating to the 1998 merger of LG&E's and KU's parent entities and the 2006 withdrawal of LG&E and KU from the Midcontinent Independent System Operator, Inc.
New Accounting Guidance There has been no new accounting guidance adopted in 2023, please refer to Note 21 for discussion of significant accounting guidance pending adoption as of December 31, 2023. Application of Critical Accounting Policies Financial condition and results of operations are impacted by the methods, assumptions and estimates used in the application of critical accounting policies.
New Accounting Guidance See Note 1 and Note 20 for a discussion of significant new accounting guidance adopted and pending adoption as of December 31, 2024. Application of Critical Accounting Policies Financial condition and results of operations are impacted by the methods, assumptions and estimates used in the application of critical accounting policies.
(b) Prior period impact related to a FERC refund order. See Note 7 to the Financial Statements for additional information. (c) Prior period impact of a methodology change in determining unbilled revenues.
(b) Prior period impact related to a FERC refund order. (c) Prior period impact of a methodology change in determining unbilled revenues.
The estimated impact of a 10% adverse movement in interest rates on the fair value of debt and interest expense at December 31 is shown below. 10% Adverse Movement in Rates on Fair Value of Debt 10% Adverse Movement in Rates on Interest Expense For Floating Exposure 2023 2022 2023 2022 PPL $ 593 $ 495 $ 8 $ 16 PPL Electric 250 178 3 6 LG&E 95 84 — 3 KU 137 127 1 2 56 Table of Contents Commodity Price Risk PPL is exposed to commodity price risk through its subsidiaries as described below. • PPL Electric is required to purchase electricity to fulfill its obligation as a PLR.
The estimated impact of a 10% adverse movement in interest rates on the fair value of debt at December 31 is shown below. 10% Adverse Movement in Rates on Fair Value of Debt 2024 2023 PPL $ 622 $ 593 PPL Electric 262 250 LG&E 89 95 KU 131 137 Commodity Price Risk PPL is exposed to commodity price risk through its subsidiaries as described below. • PPL Electric is required to purchase electricity to fulfill its obligation as a PLR.
The Registrants had the following at: 46 Table of Contents PPL PPL Electric LG&E KU December 31, 2023 Cash and cash equivalents $ 331 $ 51 $ 18 $ 14 Short-term debt 992 509 — 93 Long-term debt due within one year 1 — — — Notes payable with affiliates — — — December 31, 2022 Cash and cash equivalents $ 356 $ 25 $ 93 $ 21 Short-term debt 985 145 179 101 Long-term debt due within one year 354 340 — 13 Notes payable with affiliates — — — (PPL) The Statements of Cash Flows separately report the cash flows of discontinued operations.
The Registrants had the following at: PPL PPL Electric LG&E KU December 31, 2024 Cash and cash equivalents $ 306 $ 24 $ 8 $ 13 Short-term debt 303 — 25 140 Long-term debt due within one year 551 — 300 250 Notes payable with affiliates — 43 73 December 31, 2023 Cash and cash equivalents $ 331 $ 51 $ 18 $ 14 Short-term debt 992 509 — 93 Long-term debt due within one year 1 — — — Notes payable with affiliates — — — (PPL) The Statements of Cash Flows separately report the cash flows of discontinued operations.
Increase (Decrease) Actuarial assumption Discount Rate (0.25 %) Expected Return on Plan Assets (0.25 %) Rate of Compensation Increase 0.25 % Increase (Decrease) Increase (Decrease) (Increase) Decrease Increase (Decrease) Increase (Decrease) Actuarial assumption Defined Benefit Asset Defined Benefit Liabilities AOCI (pre-tax) Net Regulatory Assets Defined Benefit Costs PPL Discount rates $ (21) $ (80) $ 27 $ 74 $ — Expected return on plan assets n/a n/a n/a n/a 10 Rate of compensation increase (3) (7) 3 7 1 PPL Electric Discount rates — (35) — 35 (1) Expected return on plan assets n/a n/a — n/a 4 Rate of compensation increase — (3) — 3 — LG&E Discount rates (9) 1 n/a 10 1 Expected return on plan assets n/a n/a n/a n/a 1 Rate of compensation increase (1) — n/a 1 — KU Discount rates (7) 1 n/a 8 — Expected return on plan assets n/a n/a n/a n/a 1 Rate of compensation increase (1) — n/a 1 — Income Taxes (All Registrants) Significant management judgment is required in developing the Registrants' provision for income taxes, primarily due to the uncertainty related to tax positions taken or expected to be taken on tax returns and valuation allowances on deferred tax assets. 60 Table of Contents Additionally, significant management judgment is required to determine the amount of benefit recognized related to an uncertain tax position.
Increase (Decrease) Actuarial assumption Discount Rate (0.25 %) Expected Return on Plan Assets (0.25 %) Rate of Compensation Increase 0.25 % Increase (Decrease) (Increase) Decrease (Increase) Decrease Increase (Decrease) Increase (Decrease) Actuarial assumption Defined Benefit Asset Defined Benefit Liabilities AOCI (pre-tax) Net Regulatory Assets Defined Benefit Costs PPL Discount rates $ (19) $ (73) $ 26 $ 66 $ 7 Expected return on plan assets n/a n/a n/a n/a 10 Rate of compensation increase (2) (6) 2 6 1 PPL Electric Discount rates — (31) — 31 2 Expected return on plan assets n/a n/a — n/a 4 Rate of compensation increase — (2) — 2 1 LG&E Discount rates (8) 1 n/a 9 1 Expected return on plan assets n/a n/a n/a n/a 1 Rate of compensation increase (1) — n/a 1 — KU Discount rates (6) 1 n/a 7 1 Expected return on plan assets n/a n/a n/a n/a 1 Rate of compensation increase (1) — n/a 1 — Income Taxes (All Registrants) Significant management judgment is required in developing the Registrants' provision for income taxes, primarily due to valuation allowances on deferred tax assets. 58 Table of Contents The need for valuation allowances to reduce deferred tax assets requires significant management judgment.
RIE filed with the RIPUC (i) an updated electric Service Quality Plan on December 27, 2023 for RIPUC approval and (ii) additional compliance tariff provisions regarding recovery and updated cost schedules to reflect the RIPUC's decision on December 22, 2023 for RIPUC approval. RIE cannot predict the outcome of these matters.
RIE filed with the RIPUC for approval of (i) an updated electric Service Quality Plan on December 27, 2023, (ii) additional compliance tariff provisions regarding recovery and updated cost schedules to reflect the RIPUC's decision on December 22, 2023, and (iii) electric and gas tariff advice filings for RIPUC Automatic Meter Reading/AMF meter opt-out tariff provision on September 19, 2024.
(g) See Note 9 to the Financial Statements for additional information. 34 Table of Contents Fuel Fuel expense decreased $198 million in 2023 compared with 2022, primarily due to a decrease in commodity costs of $46 million at LG&E and $89 million at KU and a decrease in volumes due to weather of $15 million at LG&E and $50 million at KU.
See Note 3 to the Financial Statements for additional information. 34 Table of Contents Fuel Fuel expense increased $50 million in 2024 compared with 2023, primarily due to an increase of $22 million at LG&E primarily due to an increase in commodity costs and an increase in volumes due to weather of $37 million at KU, partially offset by a decrease in commodity costs of $8 million at KU.
Any tax planning strategy utilized in this assessment must meet the recognition and measurement criteria utilized to account for an uncertain tax position. When evaluating the need for valuation allowances, the uncertainty posed by political risk on such factors is also considered by management.
Any tax planning strategy considered in this assessment must meet the recognition and measurement criteria for the valuation of a deferred tax asset. When evaluating the need for valuation allowances, the uncertainty posed by potential or expected legislative change on such factors is also considered by management.
Net Income (Loss) and Earnings from Ongoing Operations include the following results: 40 Table of Contents Change 2023 2022 2023 vs. 2022 Operating Revenues $ 1,851 $ 1,038 $ 813 Energy purchases 658 365 293 Other operation and maintenance 705 531 174 Depreciation 156 92 64 Taxes, other than income 156 92 64 Total operating expenses 1,675 1,080 595 Other Income (Expense) - net 19 23 (4) Interest Expense 83 39 44 Income Taxes 16 (14) 30 Net Income (Loss) 96 (44) 140 Less: Special Items (56) (109) 53 Earnings from Ongoing Operations $ 152 $ 65 $ 87 The following after-tax gains (losses), which management considers special items, impacted the Rhode Island Regulated segment's results and are excluded from Earnings from Ongoing Operations: Income Statement Line Item 2023 2022 Acquisition integration, net of tax of $17, $18 (a) Other operation and maintenance $ (65) $ (70) Acquisition integration, net of tax of $0 Other Income (Expense) - net — 1 Acquisition integration, net of tax of ($2), $10 (b) Operating Revenues 8 (40) Acquisition integration, net of tax of ($1) Depreciation 2 — Acquisition integration, net of tax of $0 Interest Expense (1) — Total Special Items $ (56) $ (109) (a) Primarily includes certain TSA costs for IT systems that will not be part of PPL's ongoing operations. 2022 also includes costs for certain commitments made during the acquisition process.
Net Income and Earnings from Ongoing Operations include the following results: Change 2024 2023 2024 vs. 2023 Operating Revenues $ 2,024 $ 1,851 $ 173 Energy purchases 782 658 124 Other operation and maintenance 731 705 26 Depreciation 165 156 9 Taxes, other than income 144 156 (12) Total Operating Expenses 1,822 1,675 147 Other Income (Expense) - net 24 19 5 Interest Expense 95 83 12 Income Taxes 22 16 6 Net Income 109 96 13 Less: Special Items (46) (56) 10 Earnings from Ongoing Operations $ 155 $ 152 $ 3 39 Table of Contents The following after-tax gains (losses), which management considers special items, impacted the Rhode Island Regulated segment's results and are excluded from Earnings from Ongoing Operations: Income Statement Line Item 2024 2023 Acquisition integration, net of tax of $13, $17 (a) Other operation and maintenance $ (45) $ (65) Acquisition integration, net of tax of $0 Other Income (Expense) - net (1) — Acquisition integration, net of tax of ($2) (b) Operating Revenues — 8 Acquisition integration, net of tax of ($1) Depreciation — 2 Acquisition integration, net of tax of $0 Interest Expense — (1) Total $ (46) $ (56) (a) Primarily includes certain transition services agreement costs for IT systems that will not be part of PPL's ongoing operations.
(LG&E) LG&E's cash provided by operating activities in 2023 increased $66 million compared with 2022. • Net income decreased $6 million between the periods and included a decrease in non-cash components of $6 million.
(LG&E) LG&E's cash provided by operating activities in 2024 decreased $55 million compared with 2023. • Net income increased $31 million and included an increase in non-cash components of $26 million.
The increase in non-cash charges was primarily due to an increase in depreciation (primarily due to the acquisition of RIE) and an increase in deferred income taxes and investment tax credits (primarily due to book versus tax plant timing differences), partially offset by an increase in defined benefit plans income (primarily due to a higher expected return) and loss on sale of Safari Holdings in 2022. • The $253 million increase in cash from changes in working capital was primarily due to a decrease in unbilled revenues (primarily due to weather and rate recovery mechanisms) and an increase in other current liabilities, partially offset by a decrease in accounts payable (primarily due to timing and pricing). • The $331 million decrease in cash provided by other operating activities was driven by a decrease in non-current liabilities (primarily related to the purchase of renewable tax credits in 2023).
The decrease in non-cash components was primarily due to an increase in deferred income taxes and investment tax credits (primarily due to book versus tax plant timing differences). • The $132 million increase in cash from changes in working capital was primarily due to a decrease in accounts receivable (primarily due to timing of payments), partially offset by an increase in unbilled revenues (primarily due to weather) and an increase in other current liabilities. • The $377 million increase in cash provided by other operating activities was driven by an increase in non-current liabilities (primarily related to the purchase of renewable tax credits in the prior year).
(d) Rhode Island Regulated includes costs incurred primarily related to certain TSA costs for IT systems that will not be part of PPL’s ongoing operations and costs for certain commitments made during the acquisition process. Corporate and Other primarily includes integration and related costs associated with the acquisition of RIE. (e) Impact of Pennsylvania state tax reform.
(b) Costs incurred primarily in connection with corporate centralization efforts. (c) Rhode Island Regulated includes costs incurred primarily related to certain transition services agreement costs for IT systems that will not be part of PPL’s ongoing operations. Corporate and Other primarily includes integration and related costs associated with the acquisition of RIE.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

47 edited+0 added−1 removed24 unchanged
Biggest changeWe identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management in continually assessing whether the regulatory assets are probable of future recovery by considering factors such as changes in the applicable regulatory environments, the ability to recover costs through regulated rates, and recent rate orders.
Biggest changeWhile KU has indicated that it expects to recover costs from customers through regulated rates, there is a risk that the regulatory commissions will not approve full recovery of and return on such costs or approve recovery on a timely basis in future regulatory decisions. 68 Table of Contents We identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management in continually assessing whether the regulatory assets and liabilities are probable of future recovery or refund by considering factors such as changes in the applicable regulatory environments, the ability to recover costs through regulated rates, and recent rate orders.
Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits.
Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits.
Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
As a result, the financial statements are subject to the accounting for certain types of regulation as prescribed by generally accepted accounting principles and reflect the effects of regulatory actions. Regulatory assets are recognized for the effect of transactions or events where future recovery of underlying costs is probable in regulated customer rates.
As a result, the financial statements are subject to the accounting for certain types of regulation as prescribed by generally accepted accounting principles and reflect the effects of regulatory actions. Regulatory assets are recognized for the effect of transactions or events where future recovery of underlying costs is probable in regulated customer rates.
Auditing these judgments required specialized knowledge of accounting for rate regulation due to its inherent complexities.
Auditing these judgments required specialized knowledge of accounting for rate regulation due to its inherent complexities.
How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the uncertainty of future decisions by regulatory commissions included the following, among others: • We tested the effectiveness of management’s internal controls over evaluating the likelihood of recovery or refund in future rates of costs deferred as regulatory assets and liabilities.
How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the uncertainty of future decisions by regulatory commissions included the following, among others: • We tested the effectiveness of management’s internal controls over evaluating the likelihood of recovery or refund in future rates of costs deferred as regulatory assets and liabilities.
Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits.
Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits.
We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
As a result, the financial statements are subject to the accounting for certain types of regulation as prescribed by generally accepted accounting principles and reflect the effects of regulatory actions. Regulatory assets are recognized for the effect of transactions or events where future recovery of underlying costs is probable in regulated customer rates.
As a result, the financial statements are subject to the accounting for certain types of regulation as prescribed by generally accepted accounting principles and reflect the effects of regulatory actions. Regulatory assets are recognized for the effect of transactions or events where future recovery of underlying costs is probable in regulated customer rates.
Auditing these judgments required specialized knowledge of accounting for rate regulation due to its inherent complexities.
Auditing these judgments required specialized knowledge of accounting for rate regulation due to its inherent complexities.
How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the uncertainty of future decisions by regulatory commissions included the following, among others: • We tested the effectiveness of management’s internal controls over evaluating the likelihood of recovery or refund in future rates of costs deferred as regulatory assets and liabilities.
How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the uncertainty of future decisions by regulatory commissions included the following, among others: • We tested the effectiveness of management’s internal controls over evaluating the likelihood of recovery or refund in future rates of costs deferred as regulatory assets and liabilities.
Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits.
Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits.
We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
As a result, the financial statements are subject to the accounting for certain types of regulation as prescribed by generally accepted accounting principles and reflect the effects of regulatory actions. Regulatory assets are recognized for the effect of transactions or events where future recovery of underlying costs is probable in regulated customer rates.
As a result, the financial statements are subject to the accounting for certain types of regulation as prescribed by generally accepted accounting principles and reflect the effects of regulatory actions. Regulatory assets are recognized for the effect of transactions or events where future recovery of underlying costs is probable in regulated customer rates.
The effect of such accounting is to defer certain or qualifying costs that would otherwise currently be charged to expense. Regulatory liabilities are recognized for amounts expected to be returned through future regulated customer rates.
The effect of such accounting is to defer certain or qualifying costs that would otherwise currently be charged to expense. Regulatory liabilities are recognized for amounts expected to be returned through future regulated customer rates.
Auditing these judgments required specialized knowledge of accounting for rate regulation due to its inherent complexities.
Auditing these judgments required specialized knowledge of accounting for rate regulation due to its inherent complexities.
How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the uncertainty of future decisions by regulatory commissions included the following, among others: • We tested the effectiveness of management’s internal controls over evaluating the likelihood of recovery or refund in future rates of costs deferred as regulatory assets and liabilities.
How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the uncertainty of future decisions by regulatory commissions included the following, among others: • We tested the effectiveness of management’s internal controls over evaluating the likelihood of recovery or refund in future rates of costs deferred as regulatory assets and liabilities.
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
We tested the effectiveness of management’s internal controls over the recognition of amounts as regulatory assets or liabilities and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates. • We obtained and read relevant regulatory orders issued by the regulatory commissions for the Company and other publicly available information to assess the likelihood of recovery in future rates or of a future reduction in rates based on precedents of the treatment of similar costs under similar circumstances. • We evaluated the Company’s disclosures related to the impacts of rate-regulation, including the balances recorded and regulatory developments. /s/ Deloitte & Touche LLP Morristown, New Jersey February 16, 2024 We have served as the Company's auditor since 2015. 65 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareowner and the Board of Directors of PPL Electric Utilities Corporation Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of PPL Electric Utilities Corporation and subsidiaries (the "Company") as of December 31, 2023 and 2022, the related consolidated statements of income, equity, and cash flows, for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the "financial statements").
We tested the effectiveness of management’s internal controls over the recognition of amounts as regulatory assets or liabilities and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates. • We obtained and read relevant regulatory orders issued by the regulatory commissions for the Company and other publicly available information to assess the likelihood of recovery in future rates or of a future reduction in rates based on precedents of the treatment of similar costs under similar circumstances. • We evaluated the Company’s disclosures related to the impacts of rate-regulation, including the balances recorded and regulatory developments. /s/ Deloitte & Touche LLP Morristown, New Jersey February 13, 2025 We have served as the Company's auditor since 2015. 63 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareowner and the Board of Directors of PPL Electric Utilities Corporation Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of PPL Electric Utilities Corporation and subsidiaries (the "Company") as of December 31, 2024 and 2023, the related consolidated statements of income, equity, and cash flows, for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the "financial statements").
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
We tested the effectiveness of management’s internal controls over the recognition of amounts as regulatory assets or liabilities and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates. • We obtained and read relevant regulatory orders issued by the regulatory commissions for PPL Electric and other publicly available information to assess the likelihood of recovery in future rates or of a future reduction in rates based on precedents of the treatment of similar costs under similar circumstances. • We evaluated PPL Electric’s disclosures related to the impacts of rate-regulation, including the balances recorded and regulatory developments. /s/ Deloitte & Touche LLP Morristown, New Jersey February 16, 2024 We have served as the Company's auditor since 2015. 67 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholder and the Board of Directors of Louisville Gas and Electric Company Opinion on the Financial Statements We have audited the accompanying balance sheets of Louisville Gas and Electric Company (the "Company") as of December 31, 2023 and 2022, the related statements of income, equity, and cash flows, for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the "financial statements").
We tested the effectiveness of management’s internal controls over the recognition of amounts as regulatory assets or liabilities and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates. • We obtained and read relevant regulatory orders issued by the regulatory commissions for PPL Electric and other publicly available information to assess the likelihood of recovery in future rates or of a future reduction in rates based on precedents of the treatment of similar costs under similar circumstances. • We evaluated PPL Electric’s disclosures related to the impacts of rate-regulation, including the balances recorded and regulatory developments. /s/ Deloitte & Touche LLP Morristown, New Jersey February 13, 2025 We have served as the Company's auditor since 2015. 65 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholder and the Board of Directors of Louisville Gas and Electric Company Opinion on the Financial Statements We have audited the accompanying balance sheets of Louisville Gas and Electric Company (the "Company") as of December 31, 2024 and 2023, the related statements of income, equity, and cash flows, for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the "financial statements").
We tested the effectiveness of management’s internal controls over the recognition of amounts as regulatory assets or liabilities and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates. • We obtained and read relevant regulatory orders issued by the regulatory commissions for LG&E and other publicly available information to assess the likelihood of recovery in future rates or of a future reduction in rates based on precedents of the treatment of similar costs under similar circumstances. • We evaluated LG&E’s disclosures related to the impacts of rate-regulation, including the balances recorded and regulatory developments. /s/ Deloitte & Touche LLP Louisville, Kentucky February 16, 2024 We have served as the Company’s auditor since 2015. 69 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholder and the Board of Directors of Kentucky Utilities Company Opinion on the Financial Statements We have audited the accompanying balance sheets of Kentucky Utilities Company (the "Company") as of December 31, 2023 and 2022, the related statements of income, equity, and cash flows, for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the "financial statements").
We tested the effectiveness of management’s internal controls over the recognition of amounts as regulatory assets or liabilities and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates. • We obtained and read relevant regulatory orders issued by the regulatory commissions for LG&E and other publicly available information to assess the likelihood of recovery in future rates or of a future reduction in rates based on precedents of the treatment of similar costs under similar circumstances. • We evaluated LG&E’s disclosures related to the impacts of rate-regulation, including the balances recorded and regulatory developments. /s/ Deloitte & Touche LLP Louisville, Kentucky February 13, 2025 We have served as the Company’s auditor since 2015. 67 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholder and the Board of Directors of Kentucky Utilities Company Opinion on the Financial Statements We have audited the accompanying balance sheets of Kentucky Utilities Company (the "Company") as of December 31, 2024 and 2023, the related statements of income, equity, and cash flows, for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the "financial statements").
We identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management in continually assessing whether the regulatory assets are probable of future recovery by considering factors such as changes in the applicable regulatory environments, the ability to recover costs through regulated rates, and recent rate orders.
We identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management in continually assessing whether the regulatory assets and liabilities are probable of future recovery or refund by considering factors such as changes in the applicable regulatory environments, the ability to recover costs through regulated rates, and recent rate orders.
We identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management in continually assessing whether the regulatory assets are probable of future recovery by considering factors such as changes in the applicable regulatory environments, the ability to recover costs through regulated rates, and recent rate orders.
We identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management in continually assessing whether the regulatory assets and liabilities are probable of future recovery or refund by considering factors such as changes in the applicable regulatory environments, the ability to recover costs through regulated rates, and recent rate orders.
We identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management in continually assessing whether the regulatory assets are probable of future recovery by considering factors such as changes in the applicable regulatory environments, the ability to recover costs through regulated rates, and recent rate orders.
We identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management in continually assessing whether the regulatory assets and liabilities are probable of future recovery or refund by considering factors such as changes in the applicable regulatory environments, the ability to recover costs through regulated rates, and recent rate orders.
Combined Management's Discussion and Analysis of Financial Condition and Results of Operations." 63 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareowners and the Board of Directors of PPL Corporation Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of PPL Corporation and subsidiaries (the "Company") as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, equity, and cash flows, for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the "financial statements").
Combined Management's Discussion and Analysis of Financial Condition and Results of Operations." 61 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareowners and the Board of Directors of PPL Corporation Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of PPL Corporation and subsidiaries (the "Company") as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, equity, and cash flows, for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the "financial statements").
While LG&E has indicated that it expects to recover costs 68 Table of Contents from customers through regulated rates, there is a risk that the regulatory commissions will not approve full recovery of and return on such costs or approve recovery on a timely basis in future regulatory decisions.
While LG&E has indicated that it expects to recover costs from customers through regulated rates, there is a risk that the regulatory commissions will not approve full recovery of and return on such costs or approve recovery on a timely basis in future regulatory decisions.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 16, 2024, expressed an unqualified opinion on the Company's internal control over financial reporting.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 13, 2025, expressed an unqualified opinion on the Company's internal control over financial reporting.
The accounting for regulatory assets and regulatory liabilities is based on specific rate orders or, in certain 70 Table of Contents cases, regulatory commission precedent for transactions or events.
The accounting for regulatory assets and regulatory liabilities is based on specific rate orders or, in certain 62 Table of Contents cases, regulatory commission precedent for transactions or events.
The effect of such accounting is to defer certain or qualifying costs that would otherwise currently be charged to expense. Regulatory liabilities are recognized for amounts expected to be returned through future regulated 64 Table of Contents customer rates.
The effect of such accounting is to defer certain or qualifying costs that would otherwise currently be charged to expense. Regulatory liabilities are recognized for amounts expected to be returned through future regulated customer rates.
We tested the effectiveness of management’s internal controls over the recognition of amounts as regulatory assets or liabilities and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates. • We obtained and read relevant regulatory orders issued by the regulatory commissions for KU and other publicly available information to assess the likelihood of recovery in future rates or of a future reduction in rates based on precedents of the treatment of similar costs under similar circumstances. • We evaluated KU’s disclosures related to the impacts of rate-regulation, including the balances recorded and regulatory developments. /s/ Deloitte & Touche LLP Louisville, Kentucky February 16, 2024 We have served as the Company’s auditor since 2015. 71 Table of Contents (THIS PAGE LEFT BLANK INTENTIONALLY.) 72 Table of Contents
We tested the effectiveness of management’s internal controls over the recognition of amounts as regulatory assets or liabilities and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates. • We obtained and read relevant regulatory orders issued by the regulatory commissions for KU and other publicly available information to assess the likelihood of recovery in future rates or of a future reduction in rates based on precedents of the treatment of similar costs under similar circumstances. • We evaluated KU’s disclosures related to the impacts of rate-regulation, including the balances recorded and regulatory developments. /s/ Deloitte & Touche LLP Louisville, Kentucky February 13, 2025 We have served as the Company’s auditor since 2015. 69 Table of Contents (THIS PAGE LEFT BLANK INTENTIONALLY.) 70 Table of Contents
The accounting for regulatory assets and regulatory liabilities is based on specific rate orders or, in certain cases, regulatory commission precedent for transactions or events.
The accounting for regulatory assets and regulatory liabilities is based on specific rate orders or, in certain 64 Table of Contents cases, regulatory commission precedent for transactions or events.
Removed
While KU has indicated that it expects to recover costs from customers through regulated rates, there is a risk that the regulatory commissions will not approve full recovery of and return on such costs or approve recovery on a timely basis in future regulatory decisions.

Other PPL 10-K year-over-year comparisons