01—Abstract
Summary
Summary of the 8-K filed February 17, 2026. Cited figures are marked; the original filing is the authoritative source.
On February 16, 2026, the Kentucky Public Service Commission (KPSC) issued orders in the rate proceedings that Louisville Gas and Electric Company (LG&E) and Kentucky Utilities Company (KU) commenced in May 2025.
The orders approve portions of the Companies' October 2025 stipulation with a majority of intervenors, with modifications. They provide for annual electricity revenue increases of $59 milliona at LG&E and $128 million at KU, and an annual gas revenue increase of $46 million at LG&E. Authorized returns on equity are 9.775% for base rates and 9.675% for capital rate adjustment mechanisms.
PPL Corporation reaffirmed its previously disclosed long-term earnings growth targets in connection with the orders. The orders create a temporary Pilot Generation Recovery Adjustment Clause (Adjustment Clause PGR) covering planned generation and storage projects, including Mill Creek Unit 5, the Brown Battery Energy Storage System, and the Mercer County and Marion County solar projects. The KPSC also allowed potential stay-open costs for LG&E's Mill Creek Unit 2 to be recovered through this clause, which runs until the earlier of ten months after the Companies' next base rate filing or the effective date of new rates in that proceeding.
Costs for Mill Creek Unit 6 and Brown Unit 12 were excluded from the clause, without prejudice to future recovery requests. The KPSC did not approve the requested earnings-sharing mechanism, and the conditional stay-out offer, which would have deferred base rate increases until August 2028, was part of the stipulation the orders modified. The rate changes take effect retroactively on January 1, 2026, and the Companies will refund amounts collected above final approved rates within sixty days.
The Companies and all intervenors may seek rehearing or appeal. Because the orders modified or denied terms of the stipulation, the Companies and all stipulating parties may withdraw from it. The Companies are evaluating the orders and PPL Corporation states it cannot predict the outcome of the matter.
02—Key points
Key Highlights
- KPSC orders dated February 16, 2026 approve portions of the October 2025 LG&E and KU rate stipulation, with modifications.
- Approved annual electricity revenue increases of $59 million for LG&E and $128 million for KU; annual gas revenue increase of $46 million for LG&E.
- Authorized return on equity of 9.775% for base rates and 9.675% for capital rate adjustment mechanisms.
- New temporary Pilot Generation Recovery Adjustment Clause covers Mill Creek Unit 5, Brown Battery Energy Storage System, and Mercer County and Marion County solar projects, and includes potential Mill Creek Unit 2 stay-open costs.
- Mill Creek Unit 6 and Brown Unit 12 costs excluded from the clause, without prejudice to future recovery requests.
- Rate changes are retroactive to January 1, 2026, with refunds of amounts above final approved rates due within sixty days.
- PPL Corporation reaffirmed its previously disclosed long-term earnings growth targets; the KPSC did not approve the requested earnings-sharing mechanism.
03—Questions
Frequently Asked Questions
What rate increases did the KPSC approve for LG&E and KU?
The orders provide for annual electricity revenue increases of $59 million at LG&E and $128 million at KU, and an annual gas revenue increase of $46 million at LG&E.
What returns on equity were authorized?
The orders authorize a return on equity of 9.775% for base rate purposes and 9.675% for capital rate adjustment mechanisms.
When do the new rates take effect, and will customers receive refunds?
The rate changes are retroactive to January 1, 2026. The Companies will refund amounts collected in excess of final approved rates within sixty days.
Did PPL change its earnings outlook?
No. PPL Corporation reaffirmed its previously disclosed long-term earnings growth targets in connection with the orders.
Could the stipulation be terminated, and can the decision be appealed?
Because the KPSC modified or denied terms of the stipulation, the Companies and all stipulating parties have the right to withdraw from it. The Companies and all intervenors may request rehearing or appeal. PPL states it cannot predict the outcome.
04—Continue