PPL 10-Q 2009
Documents found in this filing:
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Indicate by check mark whether the Registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the Registrants have submitted electronically and posted on their corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrants were required to submit and post such files).
Indicate by check mark whether the Registrants are large accelerated filers, accelerated filers, non-accelerated filers, or a smaller reporting company. See definition of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Indicate by check mark whether the Registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act).
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:
This document is available free of charge at the Investor Center on PPL's Web site at www.pplweb.com. However, information on this Web site does not constitute a part of this Form 10-Q.
PPL ENERGY SUPPLY, LLC
PPL ELECTRIC UTILITIES CORPORATION
FOR THE QUARTER ENDED SEPTEMBER 30, 2009
Table of Contents
PPL Corporation and its current and former subsidiaries
Hyder> - Hyder Limited, a subsidiary of WPDL that was the previous owner of South Wales Electricity plc. In March 2001, South Wales Electricity plc was acquired by WPDH Limited and renamed WPD (South Wales). The Hyder non-electricity delivery businesses are substantially liquidated.
PPL> - PPL Corporation, the parent holding company of PPL Electric, PPL Energy Funding and other subsidiaries.
PPL Capital Funding - PPL Capital Funding, Inc., a wholly owned financing subsidiary of PPL.
PPL Electric> - PPL Electric Utilities Corporation, a regulated utility subsidiary of PPL that transmits and distributes electricity in its service territory and provides electric supply to retail customers in this territory as a PLR.
PPL Energy Funding> - PPL Energy Funding Corporation, a subsidiary of PPL and the parent company of PPL Energy Supply.
PPL EnergyPlus> - PPL EnergyPlus, LLC, a subsidiary of PPL Energy Supply that markets and trades wholesale and retail electricity and gas, and supplies energy and energy services in deregulated markets.
PPL Energy Supply> - PPL Energy Supply, LLC, a subsidiary of PPL Energy Funding and the parent company of PPL Generation, PPL EnergyPlus, PPL Global and other subsidiaries.
PPL Gas Utilities> - PPL Gas Utilities Corporation, a regulated utility that provided natural gas distribution, transmission and storage services, and the competitive sale of propane, which was a subsidiary of PPL until its sale in October 2008.
PPL Generation> - PPL Generation, LLC, a subsidiary of PPL Energy Supply that owns and operates U.S. generating facilities through various subsidiaries.
PPL Global> - PPL Global, LLC, a subsidiary of PPL Energy Supply that primarily owns and operates a business in the U.K. that is focused on the regulated distribution of electricity.
PPL Investment Corp. - PPL Investment Corporation, a subsidiary of PPL Energy Supply.
PPL Maine> - PPL Maine, LLC, a subsidiary of PPL Generation that owns generating operations in Maine.
PPL Martins Creek> - PPL Martins Creek, LLC, a subsidiary of PPL Generation that owns generating operations in Pennsylvania.
PPL Montana> - PPL Montana, LLC, an indirect subsidiary of PPL Generation that generates electricity for wholesale sales in Montana and the Pacific Northwest.
PPL Services> - PPL Services Corporation, a subsidiary of PPL that provides shared services for PPL and its subsidiaries.
PPL Susquehanna - PPL Susquehanna, LLC, a nuclear generating subsidiary of PPL Generation.
WPD - refers collectively to WPDH Limited and WPDL.
WPD LLP> - Western Power Distribution LLP, a wholly owned subsidiary of WPDH Limited, which owns WPD (South West) and WPD (South Wales).
WPD (South Wales)> - Western Power Distribution (South Wales) plc, a British regional electric utility company.
WPD (South West)> - Western Power Distribution (South West) plc, a British regional electric utility company.
WPDH Limited> - Western Power Distribution Holdings Limited, an indirect, wholly owned subsidiary of PPL Global. WPDH Limited owns WPD LLP.
WPDL> - WPD Investment Holdings Limited, an indirect wholly owned subsidiary of PPL Global. WPDL owns 100% of the common shares of Hyder.
Other terms and abbreviations
£ - British pounds sterling.
2008 Form 10-K - Annual Report to the SEC on Form 10-K for the year ended December 31, 2008.
A.M. Best> - A.M. Best Company, a company that reports on the financial condition of insurance companies.
AMT - alternative minimum tax.
AOCI - accumulated other comprehensive income or loss.
ARO - asset retirement obligation.
Baseload generation> - includes the output provided by PPL's nuclear, coal, hydroelectric and qualifying facilities.
Basis> - when used in the context of derivatives and commodity trading, the commodity price differential between two locations, products or time periods.
Bcf - billion cubic feet.
CAIR - the EPA's Clean Air Interstate Rule.
Clean Air Act> - federal legislation enacted to address certain environmental issues related to air emissions, including acid rain, ozone and toxic air emissions.
CTC> - competitive transition charge on customer bills to recover allowable transition costs under the Customer Choice Act.
Customer Choice Act> - the Pennsylvania Electricity Generation Customer Choice and Competition Act, legislation enacted to restructure the state's electric utility industry to create retail access to a competitive market for generation of electricity.
DDCP - Directors Deferred Compensation Plan.
DEP - Department of Environmental Protection, a state government agency.
DOE - Department of Energy, a U.S. government agency.
DRIP - Dividend Reinvestment Plan.
Economic Stimulus Package> - The American Recovery and Reinvestment Act of 2009, generally referred to as the federal economic stimulus package, which was signed into law in February 2009.
EMF - electric and magnetic fields.
EPA - Environmental Protection Agency, a U.S. government agency.
EPS - earnings per share.
ESOP - Employee Stock Ownership Plan.
FASB> - Financial Accounting Standards Board, a rulemaking organization that establishes financial accounting and reporting guidance.
FERC> - Federal Energy Regulatory Commission, the federal agency that regulates, among other things, interstate transmission and wholesale sales of electricity, hydroelectric power projects and related matters.
Fitch - Fitch, Inc.
FTR> - financial transmission rights, which are financial instruments established to manage price risk related to electricity transmission congestion. They entitle the holder to receive compensation or require the holder to remit payment for certain congestion-related transmission charges that arise when the transmission grid is congested.
GAAP - generally accepted accounting principles in the U.S.
GWh - gigawatt-hour, one million kilowatt-hours.
ICP - Incentive Compensation Plan.
ICPKE - Incentive Compensation Plan for Key Employees.
Intermediate and peaking generation> - includes the output provided by PPL Energy Supply's oil- and natural gas-fired units.
IRS - Internal Revenue Service, a U.S. government agency.
IRC Sec. 481> - the Internal Revenue Code Section that identifies the tax year in which accounting method change differences are recognized in federal taxable income.
ISO - Independent System Operator.
ITC> - intangible transition charge on customer bills to recover intangible transition costs associated with securitizing stranded costs under the Customer Choice Act.
LIBOR - London Interbank Offered Rate.
Long Island generation business >- includes a 79.9 MW gas-fired plant in the Edgewood section of Brentwood, New York and a 79.9 MW oil-fired plant in Shoreham, New York.
MACT - maximum achievable control technology.
Montana Power> - The Montana Power Company, a Montana-based company that sold its generating assets to PPL Montana in December 1999. Through a series of transactions consummated during the first quarter of 2002, Montana Power sold its electricity delivery business to NorthWestern.
Moody's - Moody's Investors Service, Inc.
MW - megawatt, one thousand kilowatts.
MWh - megawatt-hour, one thousand kilowatt-hours.
NDT - nuclear plant decommissioning trust.
NERC - North American Electric Reliability Corporation.
NorthWestern> - NorthWestern Corporation, a Delaware corporation, and successor in interest to Montana Power's electricity delivery business, including Montana Power's rights and obligations under contracts with PPL Montana.
NPNS> - the normal purchases and normal sales exception as permitted by derivative accounting rules.
NUGs> (Non-Utility Generators) - generating plants not owned by public utilities, whose electrical output must be purchased by utilities under the PURPA if the plant meets certain criteria.
OCI - other comprehensive income or loss.
Ofgem> - Office of Gas and Electricity Markets, the British agency that regulates transmission, distribution and wholesale sales of electricity and related matters.
PEDFA - Pennsylvania Economic Development Financing Authority.
PJM> (PJM Interconnection, L.L.C.) - operator of the electric transmission network and electric energy market in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia.
PLR> (Provider of Last Resort) - the role of PPL Electric in providing default electricity supply to retail customers within its delivery territory who have not chosen to select an alternative electricity supplier under the Customer Choice Act.
PP&E - property, plant and equipment.
PUC> - Pennsylvania Public Utility Commission, the state agency that regulates certain ratemaking, services, accounting and operations of Pennsylvania utilities.
PUC Final Order> - final order issued by the PUC on August 27, 1998, approving the settlement of PPL Electric's restructuring proceeding.
PURPA> - Public Utility Regulatory Policies Act of 1978, legislation passed by the U.S. Congress to encourage energy conservation, efficient use of resources and equitable rates.
Regulation S-X> - SEC regulation governing the form and content of and requirements for financial statements required to be filed pursuant to the federal securities laws.
RFC> - ReliabilityFirst Corporation (the regional reliability entity that replaced the Mid-Atlantic Area Coordination Council).
RMC - Risk Management Committee.
Sarbanes-Oxley Act of 2002> - sets requirements for management's assessment of internal controls for financial reporting. It also requires an independent auditor to make its own assessment.
SCR - selective catalytic reduction, a pollution control process.
Scrubber> - an air pollution control device that can remove particulates and/or gases (such as sulfur dioxide) from exhaust gases.
SEC> - Securities and Exchange Commission, a U.S. government agency whose primary mission is to protect investors and maintain the integrity of the securities markets.
S&P - Standard & Poor's Ratings Services.
Smart grid> - an electricity distribution system that allows information to flow from a customer's electric meter in two directions. The goal of a smart grid is to use technologies to increase power grid efficiency, reliability, and flexibility.
Smart meter - an electric meter that utilizes smart metering technology.
Smart metering technology> - technology that can measure, among other things, time of electricity consumption to permit offering rate incentives for usage during lower cost or demand intervals.
Superfund> - federal environmental legislation that addresses remediation of contaminated sites; states also have similar statutes.
Tolling agreement> - agreement whereby the owner of an electric generating facility agrees to use that facility to convert fuel provided by a third party into electric energy for delivery back to the third party.
VaR> - value-at-risk.
Statements contained in this Form 10-Q report concerning expectations, beliefs, plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements which are other than statements of historical fact are "forward-looking statements" within the meaning of the federal securities laws. Although PPL, PPL Energy Supply and PPL Electric believe that the expectations and assumptions reflected in these statements are reasonable, there can be no assurance that these expectations will prove to be correct. Forward-looking statements are subject to many risks and uncertainties, and actual results may differ materially from the results discussed in forward-looking statements. In addition to the specific factors discussed in "Item 1A. Risk Factors" in the companies' 2008 Form 10-K and in "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Form 10-Q report, the following are among the important factors that could cause actual results to differ materially from the forward-looking statements.
Any such forward-looking statements should be considered in light of such important factors and in conjunction with other documents of PPL, PPL Energy Supply and PPL Electric on file with the SEC.
New factors that could cause actual results to differ materially from those described in forward-looking statements emerge from time to time, and it is not possible for PPL, PPL Energy Supply or PPL Electric to predict all such factors, or the extent to which any such factor or combination of factors may cause actual results to differ from those contained in any forward-looking statement. Any forward-looking statement speaks only as of the date on which such statement is made, and PPL, PPL Energy Supply and PPL Electric undertake no obligation to update the information contained in such statement to reflect subsequent developments or information.