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PPL to defer Clean Power Plan spending at Ky. operations, for now

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PPL to defer Clean Power Plan spending at Ky. operations, for now

is unlikely to spendon compliance with the U.S. EPA's Clean Power Plan at its Kentucky utilityoperations in the near term after the Supreme Court stayed the federalcarbon-cutting rule in early February.

The utility has sought approval from Kentucky regulators torecover $1 billion for upcoming environmental improvement projects in thestate, largely to comply with EPA's coal ash management rule that took effectin 2015.

Those projects include capping and closing remaining ashponds at its coal-fired plants in the state, building processed waterfacilities and completing the second phase of a dry storage landfill at theE.W. Brown plant.PPL will also complete a final baghouse installation at its plant in June, thesame month the company expects to finish work on a at theBrown station, which will be the largest solar generating facility in Kentucky.

But none of the $1 billion is tagged for the Clean PowerPlan, which established state-specific carbon emissions rate limits forexisting power plants. Spending on the rule for the utility's Kentucky assets "wouldbe incremental should that come back into play, but with the stay at theSupreme Court level … we're not anticipating to update the capital[expenditures target] at this time," PPL Chairman, President and CEOWilliam Spence said on an April 28 earningscall.

States can voluntarily work toward compliance with the CleanPower Plan, but many — particularly coal-reliant states — are opting tohalt work on the ruleuntil court challenges are decided. Kentucky is among the nearly 30 states thatfiled lawsuits to overturn the Clean Power Plan, saying the rule provisions of the CleanAir Act and would allow EPA to overstep its regulatory authority. Ahead of therule's stay in February, Kentucky had asked EPA for a two-year to submit its statecompliance plan, which at the time was due Sept. 6, 2016.

PPL did not provide guidance on the earnings call on CleanPower Plan spending for its Pennsylvania operations. Pennsylvania did not sueEPA over the rule and has vowed to continueplanning and engagement on the regulation pending a final decision by theSupreme Court.

PPL's LouisvilleGas and Electric Co. and KentuckyUtilities Co. regulated subsidiaries serve 1.2 million natural gasand electric customers in Kentucky and parts of Virginia. Subsidiary serves about 1.4 million customers in Pennsylvania. The company's division distributes electricity in the U.K.

In addition to environmental upgrades for its Kentuckyfleet, PPL is moving ahead on transmission projects in the Northeast. PPLElectric activatedthe $350 million Northeast-Pocono transmission line in northeast Pennsylvaniathis month, a year ahead of schedule. The company is also waiting to hear backfrom the New York ISOon an interconnection requestfor the first 95-mile segment of its Compass transmission line. If PPL obtainsthat approval, the company will proceed with an Article 7 siting application,PPL Electric President Greg Dudkin said. The first portion of Compass should befinished in the 2021-2023 time frame, with other parts of the line to becompleted during or a little after that, he added.