Recently, Bill Spence, chairman, president and CEO, sat down with Lehigh Valley Economic Development Corporation’s Colin McEvoy to discuss PPL’s strengths and clear focus for success.
PPL Corporation is one of the largest publicly-held electric utilities in the United States, and the spinoff of PPL’s competitive generation division, to form Talen Energy, has done nothing to change that.
Quite the contrary, the spinoff completed earlier this year has strengthened PPL’s focus, unlocked new value for PPL’s shareowners, given investors clear choices and positioned the company for a bright future of growth and success.
”We think the spinoff accomplished what we hoped it would accomplish, which really allows both companies to do what they do best, so they can acquire capital in a more efficient manner and they can operate with singular focuses,” said William H. Spence, PPL’s chairman, president and Chief Executive Officer. “That is really key to why we embarked on this strategy in the first place, as well as to reduce the risk profile of PPL.”
Anticipating significant challenges in the competitive generation market in the late 2000s, PPL increased the scale of its regulated utilities to more than 80 percent of its earnings from ongoing operations in 2014. In 2010 and 2011, the company acquired two major Kentucky utilities and two utilities in the United Kingdom. To further reduce risk and provide shareowners clear investment choices, PPL boldly spun off the competitive generation business in June 2015. This completed PPL’s transformation into a purely regulated utility company.
Today, PPL serves more than 10 million customers in the U.S. and United Kingdom. While the company has grown dramatically over the past two decades, its headquarters remain in the Lehigh Valley, where it was founded in 1920 and where nearly 3,000 of its 13,000 employees are located.
Investing in the future
With roughly $18 billion in infrastructure investment planned over the next five years, the company is rebuilding and modernizing its electricity distribution and transmission systems to better meet customers’ needs today and in the future.
“We’re improving our infrastructure by not only updating existing power lines and facilities but also improving the technology,” Spence said. “Making better use of digital technology will allow us to restore customers faster and provide a much more robust, safe, reliable and secure grid for the future.”
Among its many investments, in Pennsylvania PPL Electric Utilities this year energized the new 500-kv Susquehanna-Roseland transmission line, making electric service more reliable for millions of people in the Northeast. The company also is installing thousands of smart grid devices across its system that sense power outages and automatically alert operators who can reroute power around trouble spots. In areas where the equipment has been installed, it has reduced outage durations by an average of 30 percent.
And in Kentucky, PPL’s regulated utilities have made substantial upgrades to power plant environmental controls, while christening a new 640-megawatt natural gas combined-cycle generating unit, which began operation this summer and enabled the company to retire a number of older coal-fired generating units.
Investment in technology is key for the future of PPL and part of our commitment to customers, Spence said. PPL is one of the first utility companies to receive Federal Aviation Administration (FAA) approval to use drones in commercial applications. The company is now using drones as a proactive and efficient means to conduct routine line inspections and storm damage assessment in Pennsylvania.
Delivering safe, reliable affordable power
The company’s key to success is delivering safe, reliable and affordable power to its customers.
Its utilities in the U.K., under the umbrella of Western Power Distribution, are consistently the top performing utilities in the U.K. for reliability and customer satisfaction. Meanwhile, here in the U.S., its utilities, PPL Electric Utilities, Louisville Gas and Electric and Kentucky Utilities combined, have received 38 J.D. Power awards for customer satisfaction, among the most of any utility company in the nation.
PPL has positioned itself for future growth and best-in-class returns for its shareowners, with a solid financial position, strong dividend and attractive future growth prospects. As a result of its growth in recent years and the continued excellent performance of its utilities, PPL projects compound annual earnings growth of 6 percent through at least 2017.
“Having our roots here in the Lehigh Valley for now almost 100 years, one of the things that has impressed me is the high-quality workforce and resources we have in the Valley, like the infrastructure in terms of communications and transportation,” Spence said. “We look at the Valley as a great place to not only have done business for nearly 100 years, but hopefully as a great place to do business for the next 100 years, as well.”