PPL Corp. delivered a solid earnings year, its chairman said Thursday, promising more of the same in 2015 as it transitions out of its energy supply business.
But customers could face an increase in their electric bills.
Speaking Thursday to financial analysts, Chairman and CEO William Spence said the company plans to file a distribution base rate request later this year with the state Public Utility Commission. He did not disclose details or specify that it would be a hike, and company officials would not comment beyond his statement.
@nwotnella I believe that any advertisement that PPL currently does is through the unregulated energy portion of their business (PPL Energy Plus). If so, then the name on the Allentown Center, as well as at the Philly Soccer Stadium, should change from PPL to Talen Energy after the spinoff from…
at 2:25 PM February 06, 2015
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A utility’s distribution rate covers operating costs – everything from equipment to maintenance. The PUC granted PPL Electric Utilities a $71 million annual increase that took effect Jan. 1, 2013, spokesman Bryan Hay said. The hike increased the bill of a typical residential customer by 3 percent.
A distribution rate case does not include energy costs, Hay said. A separate default rate for energy supply can change quarterly, and it covers customers who do not shop for electricity.
As for earnings, PPL posted better-than-expected results in its fourth quarter on sharply higher revenue in its unregulated wholesale energy segment. For the latest period, PPL reported net income of $695 million, or $1.04 a share, compared with a year-earlier loss of $98 million, or 16 cents a share.
For the year, PPL posted a profit of $1.74 billion, or $2.61 per share, compared with $1.13 billion, or $1.76 per share in 2013. Sales throughout PPL’s Pennsylvania, Kentucky and United Kingdom operations fell by 6.2 percent for the fourth quarter and 26.8 percent during 2014.
Spence also gave little in the way of an update on the Allentown-based electric company’s plans to spin off its PPL Supply electric generation and marketing division. He noted the company is in a so-called quiet period associated with U.S. Securities and Exchange Commission marketing rules and said the deal is moving forward.
PPL announced plans last year to combine with New York-based Riverstone Holdings to create a company called Talen Energy that focuses on generating and marketing electricity. The deal is scheduled to close in the second quarter of this year. Last month, PPL said it and Riverstone have accepted the Federal Energy Regulatory Commission’s additional requirements regarding the divestiture of certain power plants.
PPL spokesman George Lewis said the decision on divesting plants to meet federal competitiveness requirements won’t be made until after closing of the deal. Talen Energy will have 12 months from the date of closing to enter into deals for the divestiture of plants.
Paul Patterson, an analyst who follows PPL for Glenrock Associates in New York, said PPL appears to be making headway during its restructuring.
“It looks to me like things are progressing,” said Patterson. “The Talen spin-off looks like it’s on target.”
He also called PPL’s earnings guidance for 2015 “reasonable.” It includes achieving compound annual earnings of 4 to 6 percent following the spinoff of the supply division.
PPL’s Electric Utilities division sells power to 1.4 million customers in 29 counties, including Lehigh and Northampton.