UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of
Report (Date of earliest event reported): June 30, 2006
Commission
File
Number
|
Registrant;
State of Incorporation;
Address
and Telephone Number
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IRS
Employer
Identification
No.
|
|
|
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1-11459
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PPL
Corporation
(Exact
name of Registrant as specified in its charter)
(Pennsylvania)
Two
North Ninth Street
Allentown,
PA 18101-1179
(610)
774-5151
|
23-2758192
|
|
|
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333-74794
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PPL
Energy Supply, LLC
(Exact
name of Registrant as specified in its charter)
(Delaware)
Two
North Ninth Street
Allentown,
PA 18101-1179
(610)
774-5151
|
23-3074920
|
|
|
|
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[ ]
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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[ ]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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[ ]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR
240.14d-2(b))
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[ ]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR
240.13e-4(c))
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Section
1 - Registrant's Business and Operations
Item
1.01 Entry into a Material Definitive Agreement
On
July
5, 2006, PPL Montana, LLC ("PPL Montana") entered into a new seven-year power
purchase and sale agreement (the "Agreement") with NorthWestern Corporation
("NorthWestern") pursuant to which PPL Montana will provide wholesale
electricity supply to NorthWestern as follows:
(i) |
Beginning
July 1, 2007 and continuing through June 30, 2010, PPL Montana will
provide 325 megawatts of on-peak supply and 175 megawatts of off-peak
supply;
|
(ii) |
From
July 1, 2010 through June 30, 2012, PPL Montana will provide 275
megawatts
of on-peak supply and 150 megawatts of off-peak supply;
and
|
(iii) |
From
July 1, 2012 through June 30, 2014, PPL Montana will provide 200
megawatts
of on-peak supply and 125 megawatts of off-peak
supply.
|
The
price
for this electricity supply starts at $44.95 per megawatt-hour in July 2007
and
increases to $52.95 per megawatt-hour by the end of the term of the Agreement.
On-peak supply is Monday through Saturday, 6:00 a.m. to 10:00 p.m.
PPL
Montana’s electricity supply obligations under the Agreement
are conditioned upon it continuing to have the requisite authority from the
Federal Energy Regulatory Commission ("FERC") to charge market-based rates
for
all sales under the Agreement, and PPL Montana may terminate the Agreement
if
the FERC or any court of competent jurisdiction issues an order or decision
that
terminates, invalidates or suspends its market-based rate authority. PPL
Montana
also may terminate the Agreement if it is required by any governmental entity
in
the State of Montana (through exercise of rights of eminent domain or otherwise)
to divest any power generation facility that it then owns, in whole or in
part,
in the State of Montana.
The
Confirmation Letter (the "Confirmation Letter") reflecting the Agreement
is
attached to this Form 8-K as Exhibit 10(a). The Confirmation Letter incorporates
the Master Power Purchase and Sale Agreement dated October 15, 2001, between
PPL
Montana and NorthWestern.
PPL
Montana currently has agreements to sell 450 megawatts of wholesale electricity
supply to NorthWestern. These agreements will expire on June 30,
2007.
PPL
Montana is an indirect, wholly owned subsidiary of PPL Energy Supply, LLC
("PPL
Energy Supply"), which is an indirect, wholly owned subsidiary of PPL
Corporation ("PPL").
The
terms
of the Agreement are consistent with the assumptions in PPL’s long-term earnings
forecast of $3.50 per share in 2010.
Section
8 - Other Events
Item
8.01 Other Events
On
June
30, 2006, PPL Southwest Generation Holdings, LLC ("PPL Southwest") and LS
Power
Generation II, LLC ("LS Power") completed the previously announced sale by
PPL
Southwest to LS Power of its 50% ownership interest in the 600-megawatt Griffith
power plant in Kingman, Arizona for approximately $115 million in cash. PPL
Southwest is an indirect, wholly owned subsidiary of PPL Energy Supply, which
is
an indirect, wholly owned subsidiary of PPL.
The
Griffith plant began commercial operation in January 2002 and was jointly
owned
by PPL Southwest and a subsidiary of Duke Energy Corporation. LS Power acquired
Duke’s interest in the Griffith plant on May 4, 2006.
PPL
and
PPL Energy Supply will record an unusual, non-cash charge related to this
transaction of approximately $15 million (or $0.04 per share for PPL) after
taxes in the second quarter of 2006. Proceeds of the sale are expected to
be
used to fund a portion of the companies’ capital expenditure
requirements.
Section
9 - Financial Statements and Exhibits
Item
9.01 Financial Statements and Exhibits
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(d)
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Exhibits
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10(a)
-
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Confirmation
Letter dated July 5, 2006, between PPL Montana and NorthWestern
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Statements
made in this Form 8-K report, including statements with respect to future
earnings and energy supply, are "forward-looking statements" within the meaning
of the federal securities laws. Although PPL Corporation and PPL Energy Supply,
LLC (together, “PPL”) believe that the expectations and assumptions reflected in
these forward-looking statements are reasonable, these statements involve
a
number of risks and uncertainties, and actual results may differ materially
from
the results discussed in the statements. The following are among the important
factors that could cause actual results to differ materially from the
forward-looking statements: market demand and prices for energy, capacity
and
fuel; market prices for crude oil and the potential impact on synthetic fuel
operations, synthetic fuel purchases from third parties and the phase-out
of
synthetic fuel tax credits; weather conditions affecting generation production,
customer energy usage and operating costs; competition in retail and wholesale
power markets; liquidity of wholesale power markets; the effect of any business
or industry restructuring; the profitability and liquidity of PPL and its
subsidiaries, including access to capital markets and credit facilities;
new
accounting requirements or new interpretations or applications of existing
requirements; operation and availability of generation facilities and operating
costs; transmission and distribution system conditions and operating costs;
current and future environmental conditions and requirements and the related
costs of compliance, including environmental capital expenditures and emission
allowance and other expenses; significant delays in the planned installation
of
pollution control equipment at PPL’s coal-fired generating units in Pennsylvania
due to weather conditions, contractor performance or other reasons; development
of new projects, markets and technologies; performance of new ventures; asset
acquisitions and dispositions; political, regulatory or economic conditions
in
states, regions or countries where PPL or its subsidiaries conduct business;
any
impact of hurricanes or other severe weather on PPL’s business, including any
impact on fuel prices; receipt of necessary governmental permits, approvals
and
rate relief; new state, federal or foreign legislation, including new tax
legislation; state, federal and foreign regulatory developments, including
any
adverse decisions regarding the market-based rate authority of PPL Montana,
LLC
or PPL’s other generation subsidiaries; any impact of state, federal or foreign
investigations applicable to PPL and its subsidiaries and the energy industry;
capital markets conditions, including changes in interest rates, and decisions
regarding capital structure; stock price performance of PPL Corporation;
the
market prices of equity securities and the impact on pension costs and resultant
cash funding requirements for defined benefit pension plans; securities and
credit ratings; foreign currency exchange rates; the outcome of litigation
against PPL and its subsidiaries; potential effects of threatened or actual
terrorism or war or other hostilities; and commitments and liabilities of
PPL
and its subsidiaries. Any such forward-looking statements should be considered
in light of such important factors and in conjunction with PPL’s Form 10-K and
other reports on file with the Securities and Exchange
Commission.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrants
have
duly caused this report to be signed on their behalf by the undersigned hereunto
duly authorized.
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PPL
CORPORATION
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By:
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/s/
Matt Simmons
Matt
Simmons
Vice
President and Controller
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PPL
ENERGY SUPPLY, LLC
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By:
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/s/
Matt Simmons
Matt
Simmons
Vice
President and Controller
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Dated: July
6,
2006