PPL Corp 8-K

What Happened
On February 16, 2026, the Kentucky Public Service Commission (KPSC) issued orders in the LG&E and KU rate proceedings that approve portions of an October 2025 stipulation with modifications. The orders authorize increases in annual electricity revenues of $59 million at Louisville Gas & Electric (LG&E) and $128 million at Kentucky Utilities (KU), and an increase in LG&E annual gas revenues of $46 million. The KPSC set authorized returns on equity at 9.775% for base rate purposes and 9.675% for capital rate adjustment mechanisms. The commission approved a temporary Pilot Generation Recovery Adjustment Clause (Adjustment Clause PGR) covering planned projects (Mill Creek Unit 5, Brown battery energy storage, Mercer County Solar, Marion County Solar) and included possible stay‑open cost recovery for Mill Creek Unit 2; it excluded Mill Creek Unit 6 and Brown Unit 12 from the pilot. The orders are retroactive to January 1, 2026, and refunds for amounts above final approved rates must be made within 60 days. PPL reaffirmed its previously disclosed long‑term earnings growth targets.

Key Details

• Annual revenue impacts approved: +$59M (LG&E electricity), +$128M (KU electricity), +$46M (LG&E gas).
• Authorized ROE: 9.775% (base) and 9.675% (capital rate adjustments).
• Adjustment Clause PGR is a pilot (limited term) covering Mill Creek Unit 5, Brown BESS, Mercer & Marion solar; Mill Creek Unit 2 potential stay‑open costs included; Mill Creek Unit 6 and Brown Unit 12 excluded for now.
• Orders retroactive to Jan 1, 2026; customer refunds for any overcharges to be issued within 60 days. KPSC did not approve the proposed earnings‑sharing mechanism; parties may seek rehearing/appeal or withdraw from the stipulation.

Why It Matters
These KPSC orders affect PPL’s regulated utilities’ near‑term revenue and recovery mechanisms and set precise ROE levels that influence future earnings. The pilot recovery mechanism permits expedited cost recovery for several planned generation and storage projects but is time‑limited and excludes some later projects, leaving open future recovery proceedings. The retroactive effective date and refund requirement mean billing adjustments will be made to customers, and the orders’ modifications give the parties rights to seek rehearing or appeal—so outcomes remain subject to change. PPL’s reaffirmation of long‑term earnings growth targets is notable but dependent on final outcomes of any appeals or future rate proceedings.