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: March 30, 1999
LG&E ENERGY CORP.
220 West Main Street
P.O. Box 32030
Louisville, KY 40232
(502) 627-2000
Kentucky 1-10568 61 - 1174555
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
LOUISVILLE GAS AND ELECTRIC COMPANY
220 West Main Street
P.O. Box 32030
Louisville, KY 40232
(502) 627-2000
Kentucky 2-26720 61 - 0264150
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
KENTUCKY UTILITIES COMPANY
One Quality Street
Lexington, KY 40507-1428
(606) 255-2100
Kentucky and Virginia 1-3464 61 - 0247570
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
This combined Form 8-K is separately filed by LG&E Energy Corp., Louisville
Gas and Electric Company and Kentucky Utilities Company. Information
contained herein relating to any individual registrant is filed by such
registrant on its own behalf. Except for LG&E Energy Corp., each
registrant makes no representation as to information relating to the other
registrants. In particular, information contained herein related to LG&E
Energy Corp. contained in paragraph (b) of Item 5 and Exhibit 99.02 is
provided solely by LG&E Energy Corp. and shall not be deemed included in
the Form 8-K of Louisville Gas and Electric Company and Kentucky Utilities
Company.
<PAGE>
Item 5. Other Events.
a) On April 5, 1999, LG&E Energy Corp. ("LG&E Energy") announced the joint
agreement of its two utility subsidiaries, Louisville Gas and Electric
Company and Kentucky Utilities Company, with the Kentucky Attorney
General's Office regarding the companies' pending performance-based
ratemaking ("PBR") proposal. In a filing with the Kentucky Public
Service Commission, the parties amended the companies' PBR proposal to
request approval of an agreed-upon five-year rate reduction plan.
b) On March 30, 1999 LG&E Energy announced its acquisition of an indirect
ownership interest of approximately 20 percent in Gas Natural BAN, S.A.
("BAN"), a natural gas distribution company that serves 1.2 million
customers in the northern portion of the province of Buenos Aires,
Argentina. LG&E Energy acquired 28 percent of Invergas, S.A., the
controlling entity which holds a 70 percent interest in BAN.
Two news releases of LG&E Energy describing the above matters are filed
with this report as Exhibits 99.01 and 99.02, respectively, and are
incorporated herein by reference.
Item 7(c). Exhibits Filed.
Exhibit
Number Description
99.01 News Release dated as of April 5, 1999.
99.02 News Release dated as of March 30, 1999.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
LG&E ENERGY CORP.
Registrant
/s/ John R. McCall
John R. McCall
Executive Vice President, General
Counsel and Corporate Secretary
Date: April 6, 1999
LOUISVILLE GAS AND ELECTRIC COMPANY
Registrant
/s/ John R. McCall
John R. McCall
Executive Vice President, General
Counsel and Corporate Secretary
Date: April 6, 1999
- 1 -
<PAGE>
KENTUCKY UTILITIES COMPANY
Registrant
/s/ John R. McCall
John R. McCall
Executive Vice President, General
Counsel and Corporate Secretary
Date: April 6, 1999
- 2 -
<PAGE>
EXHIBIT INDEX
LG&E ENERGY CORP.
LOUISVILLE GAS AND ELECTRIC COMPANY
KENTUCKY UTILITIES COMPANY
Current Report on Form 8-K
Dated March 30, 1999
Exhibits
Exhibit No. Description
99.01 News Release dated as of April 5, 1999.
99.02 News Release dated as of March 30, 1999.
- 3 -
Exhibit 99.01
LG&E, KU Reach Agreement With Kentucky Attorney General,
File Amendment to PBR Proposal
LOUISVILLE, Ky., April 5 -- LG&E Energy Corp.'s (NYSE: LGE) two utility
subsidiaries, Louisville Gas and Electric Company and Kentucky Utilities
Company, and the Kentucky Attorney General's Office, today filed with the
Kentucky Public Service Commission (PSC) a joint agreement for regulation
of the utilities through June 30, 2004. The agreement results in an
amendment to the utilities' pending performance-based ratemaking
(PBR)proposal.
The amendment to the utilities' PBR application requests PSC approval of a
five-year rate reduction plan, which would reduce electric rates by $20
million in the first year (beginning July 1, 1999), and by $8 million
annually for each of the next four years (through June 30, 2004), for a
total five-year savings to customers of $52 million. The reductions will
be distributed between LG&E and KU customers based on the same methodology
the PSC approved in its previous merger order for allocating the merger
savings to the utilities' customers (53 percent to KU customers; 47 percent
to LG&E customers). The joint agreement includes adoption of the PBR
program as proposed by the companies.
"The joint regulation plan is the result of painstaking negotiations with
the Attorney General's office in recent weeks," said Victor A. Staffieri,
LG&E Energy's chief operating officer. "We are optimistic that this
agreement will move us closer to final resolution of this issue and to
eliminating the regulatory uncertainty for our shareholders. The agreement
also offers tremendous value to our customers by providing significant
immediate savings as well as long-term rate stability."
Kentucky's electric rates are already the third lowest in the nation, 38
percent below the national average, even without the additional LG&E and KU
rate reductions.
The proposal also includes the establishment of a $6 million program over
the five-year period to assist low-income customers in paying their energy
bills. This program, which will be administered by third parties, will
receive $2 million in the first year and $1 million annually for the
remaining four years.
In addition to the rate reductions and energy assistance program, the
proposal calls for LG&E and KU to extend for an additional year (through
June 30, 2004) both the rate cap and the merger-savings surcredit the
utilities established as part of their earlier merger plan. Under the rate
cap, the companies agreed, in the absence of extraordinary circumstances,
not to adjust base electric rates for five years following the merger.
They also agreed to a monthly surcredit to customers' bills reflecting the
50 percent share of the non-fuel merger savings allocated to the utilities'
customers in the first five years following the merger.
As part of the amended PBR filing, LG&E also agreed to refrain from filing
for an increase in natural gas rates over the five-year period (through
June 30, 2004).
In addition to the savings offered by the utilities' proposal, customers
will also share in performance incentives that are part of the pending PBR
filing. The PBR provides incentives to the utilities to achieve
performance targets established for power plant operations, fuel purchasing
and service quality.
LG&E Energy Corp., headquartered in Louisville, Ky., is a diversified
energy services company with businesses in power generation and project
development, retail gas and electric utility services, and asset-based
energy marketing. The company owns and operates Louisville Gas and
Electric Company, a regulated electric and gas utility and Kentucky
Utilities Company, a regulated electric utility, based in Lexington, Ky.,
which serves 77 Kentucky counties and five counties in Virginia. LG&E
Energy also owns equity in and operates power plants in six states as well
as in Spain, and owns interests in three natural gas distribution companies
in Argentina.
Exhibit 99.02
LG&E Energy Corp. Completes Acquisition in Argentina;
New Initiative Announced in Natural Gas Distribution Company
LOUISVILLE, Ky., March 30 -- LG&E Energy Corp. (NYSE: LGE) announced today
that it has acquired 28 percent of Invergas, S.A., the controlling entity
that holds 70 percent of Gas Natural BAN, S.A. (GasBAN). GasBAN is a
natural gas distribution company serving 1.1 million customers in the
northern part of the province of Buenos Aires, Argentina. This acquisition
marks LG&E Energy's third major investment in the Argentine gas
distribution market and advances the company's strategy of investing in low-
risk international developments with attractive earnings.
"Gas Natural BAN is a well-managed company and has been a strong financial
performer. The acquisition will be immediately accretive to LG&E Energy's
earnings in 1999 and is expected to provide solid earnings growth and an
attractive rate of return. We look for it to generate strong residential
customer growth in the suburban Buenos Aires area," said Roger W. Hale,
LG&E Energy chairman and chief executive officer. "Our other natural gas
distribution assets in Argentina have added significant value to LG&E
Energy shareholders, and we expect to continue leveraging our presence in
this fast-growing energy market."
GasBAN is the second largest gas distribution company in Argentina, with
most of the service being provided to customers in the greater Buenos Aires
metropolitan area. It has a market share of 13 percent of total volumes
sold and 18 percent of residential and commercial volumes. The company
sold 2.5 billion cubic meters of gas in 1998 and had gross revenues of
approximately $400 million.
Compania General de Combustibles, S.A. is selling its entire interest in
Invergas to LG&E Energy's global venture unit, LG&E International Inc. Gas
Natural SDG of Spain is GasBAN's majority owner and technical operator.
LG&E International Inc. will have one position on each of the boards of
directors of Invergas, S.A. and GasBAN.
In February 1997, LG&E Energy acquired a controlling interest and
management of Distribuidora de Gas del Centro, S.A. (Centro) and a minority
interest in Distribuidora de Gas Cuyana, S.A. (Cuyana). Centro, serving
approximately 390,000 natural gas customers in the Cordoba region, and
Cuyana, serving approximately 321,000 customers of the Mendoza region,
operate under the brand name of ECOGAS.
LG&E Energy Corp., headquartered in Louisville, Ky., is a diversified
energy services company with businesses in power generation and project
development, retail gas and electric utility services, and asset-based
energy marketing. The company owns and operates Louisville Gas and
Electric Company, a regulated electric and gas utility serving Louisville,
Ky., and 16 surrounding counties, and Kentucky Utilities Company, a
regulated electric utility, based in Lexington, Ky., which serves 77
Kentucky counties and five counties in Virginia. LG&E Energy also owns
equity in and operates power plants in six states as well as in Spain, and
now owns interests in three natural gas distribution companies in
Argentina.
Statements in this news release that state the Company's or management's
intentions, expectations or predictions of the future are forward-looking
statements. The Company's actual results could differ materially from
those projected in the forward-looking statements, and there can be no
assurance that estimates of future results will be achieved. The Company's
SEC filings contain additional information concerning factors that could
cause actual results to differ materially from those in the forward-looking
statements.
(END)
