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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) May 14, 1998
PP&L Resources, Inc.
___________________________________________________________________________
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 1-11459 23-2758192
___________________________________________________________________________
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification
No.)
PP&L, Inc.
___________________________________________________________________________
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 1-905 23-0959590
___________________________________________________________________________
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification
No.)
TWO NORTH NINTH STREET, ALLENTOWN, PA. 18101-1179
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 610-774-5151
___________________________________________________________________________
(Former name or former address, if changed since last report.)
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5. Other Events
PUC Restructuring Proceeding
Reference is made to PP&L Resources, Inc.'s (PP&L
Resources') and PP&L, Inc.'s (PP&L's) Annual Reports to the SEC
on Form 10-K for the year ended December 31, 1997, regarding
PP&L's April 1, 1997 filing of its restructuring plan with the
Pennsylvania Public Utility Commission (PUC) pursuant to the
Pennsylvania Electricity Generation Customer Choice and
Competition Act (Customer Choice Act).
On May 14, 1998, the PUC unanimously adopted a nonbinding
Motion approving a restructuring plan for PP&L (the Motion). The
Motion includes "a finding of stranded costs of $2.864 billion,
which, using a 10.86% return rate [on the unamortized balance of
stranded costs], computes to a CTC [Competitive Transition
Charge] estimated at 1.78 cents/kWh for 1999." These stranded
(or "transition") costs would be recovered through the CTC until
June 30, 2007. PP&L had requested permission to recover about $4
billion of its $4.5 billion of estimated transition costs through
2005. In addition, the Motion provides that, beginning on
January 1, 1999, PP&L would unbundle its retail electric rates to
reflect separate prices for the transmission and distribution
charge, the generation charge, and the CTC. Further, under the
Motion PP&L would provide its customers who choose to shop for
electricity with a system-average generation (or "shopping")
credit of 3.73 cents per kilowatt hour in 1999. Finally,
pursuant to a separate PUC nonbinding polling on the phase-in
period for customer choice, one-third of PP&L customers would be
able to choose their electricity supplier on January 1, 1999,
one-third on January 2, 1999, and the remainder on January 2,
2000.
The Company is still reviewing the Motion and assessing its
findings, and there remains uncertainty regarding the potential
effect of certain findings in the Motion on PP&L's restructuring
plan. The Company expects these issues to be clarified in the
PUC's final order in this proceeding.
The PUC is expected to issue its final order on June 4,
1998. The PUC's final order may result in changes to components
or assumptions in PP&L's restructuring plan that could have an
adverse effect on the level of the CTC, the amount of transition
costs that are recoverable through the CTC or the overall amount
of revenues to be collected from customers. Accordingly, PP&L
Resources and PP&L are unable to predict the ultimate effect of
the Customer Choice Act or the PUC's final order in the
restructuring proceeding on their financial position, their
results of operation, future PP&L rate levels, internally
generated funds or the need or ability to issue securities to
meet future capital requirements. However, if the final order is
consistent with the Motion, there could be a material adverse
financial impact on PP&L Resources and PP&L.
After the PUC issues its final order, PP&L Resources plans
to conduct an overall assessment of its financial position in
order to identify additional measures to be taken to meet the
challenges of the competitive marketplace. Among other things,
this assessment will include a review of operating expenses,
capital expenditures and the book value of generating assets. It
also will include an examination of the appropriate level of PP&L
Resources' common stock dividend to determine the dividend payout
ratio that allows PP&L Resources to properly balance current
returns to shareowners through dividends with the opportunity for
growth in shareowner value through the investment of retained
earnings. As a result of this examination, PP&L Resources may
reduce its common stock dividend.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
PP&L RESOURCES, INC.
PP&L, INC.
By: ________/s/John R. Biggar_______
Senior Vice President-Financial
Date: May 22, 1998
