Environmental, Transmission Spending Keep PPL Capex Rolling

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Researched by Industrial Info Resources (Sugar Land, Texas)--Utility holding company PPL Corporation (NYSE:PPL) (Allentown, Pennsylvania) reported earnings of $483 million for the second quarter of 2016, compared with a loss of $757 million in second-quarter 2015, which included a $1 billion loss from the spinoff of PPL's competitive supply business. Industrial Info is tracking more than $2 billion of active capital and maintenance projects belonging to PPL.

One of the largest areas of spending for the company is on environmental compliance projects in Kentucky. In a conference call regarding the earnings, Chief Financial Officer Vince Sorgi said the company planned to spend between $350 million and $400 million a year on continued environmental investment in the state. "Over the four years, we expect to spend about $1.5 billion of environmental capex in Kentucky," said Sorgi.

Among these projects is the installation of a wastewater treatment system at the company's Mill Creek coal-fired power station in Louisville, Kentucky. Construction consists of the installation of a wet flue gas desulfurization wastewater treatment system, plus balance of plant equipment, to comply with the coal combustion residuals (CCR) rule, mercury and air toxics standards (MATS) rule and other environmental regulations in order to extend the service life of the 1,589-megawatt (MW) plant. The same facility is also in the process of wrapping up construction of an SO2 particulate reduction addition. Construction on this project began in late 2012 and cost an estimated $1.48 billion.

Other environmental projects are planned for the company's Trimble County coal-fired power plant in Kentucky, including a wastewater treatment system and ash-handling project, which have a combined total investment value of more than $200 million.

One of the company's other main spending endeavors is for transmission projects in Pennsylvania, which includes construction of the $10.4 million Lauschtown Substation near Bowmansville. Construction on the project kicked off late last year and is expected to be completed early in the third quarter of this year. Industrial Info has been tracking this project since 2012.

Outside of Pennsylvania and Kentucky, a substantial portion of the company's business is in the United Kingdom. With the recent "Brexit" vote, President, Chairman and CEO Bill Spence stated that company's business in the country remained strong. "The vote to leave the EU has created broader economic uncertainty in the U.K. and is clearly a unique event that has led to significant volatility in the currency and worldwide markets. Despite this reaction, there is no change in our underlying business in the U.K.," said Spence.

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