PPL Taking Steps to Preserve Option to Build New Nuclear Unit

PPL Corporation (NYSE: PPL) has taken preliminary steps that would preserve the option to build a third nuclear generating unit at the company’s Susquehanna plant near Berwick, Pa.

“The steps we are taking would position us to apply for a combined construction and operating license for a third unit at Susquehanna,” said James H. Miller, PPL’s chairman, president and chief executive officer. “This effort is just one element of the company’s comprehensive plan to create options for future growth in our generating fleet.”

Those options, he said, also include the acquisition or construction of coal, hydro, natural gas and renewable energy facilities.

Miller emphasized that PPL would not undertake nuclear construction alone. “Given the market, construction and regulatory uncertainties, along with the large capital commitment for a nuclear project, we would proceed with construction only in a joint venture arrangement,” he said.

PPL has sent a letter to the U.S. Nuclear Regulatory Commission indicating the company’s intent to submit an application for a combined construction and operating license.

The company estimates that if it proceeds with the licensing phase it would cost about $70 million, most of which would be incurred by the end of 2008. Although the company continues to evaluate this issue, it expects to capitalize these costs and does not expect the expenditures to impact its forecasts of earnings from ongoing operations.

PPL also has filed a request with the PJM Interconnection for preliminary transmission interconnection studies for the Susquehanna site. This is one of many studies necessary for PPL to evaluate the feasibility of any expansion.

PPL filed the letter of intent with the NRC to ensure that PPL has a place in the NRC’s licensing process. By pursuing a license in this time frame, PPL will be preserving the potential for federal production tax credits and federal loan guarantees, Miller said. The PJM notice ensures that PPL is included in the regional power pool’s planning for future power plants.

“Given the growing concerns regarding climate change around the world and the growing need for power plants in the PJM, it absolutely makes sense to create this valuable option — for the electricity users in the mid-Atlantic region and for the shareowners of PPL,” Miller said.

PPL has not yet made a decision to move forward with construction. “A decision on construction could take as long as four years given the lengthy application process,” Miller said.

“As always, we will keep Susquehanna plant neighbors and others informed as this process goes forward,” he said.

The 2,360-megawatt, two-unit Susquehanna plant, located in Luzerne County about seven miles north of Berwick, is owned jointly by PPL Susquehanna, LLC and Allegheny Electric Cooperative Inc. and is operated by PPL Susquehanna.

Susquehanna is one of PPL Corporation’s generating facilities. Headquartered in Allentown, Pa., PPL Corporation controls more than 11,000 megawatts of generating capacity in the United States, sells energy in key U.S. markets and delivers electricity to more than 4 million customers in Pennsylvania, the United Kingdom and Latin America.