Kentucky’s two largest electric utilities – Louisville Gas andElectric (LG&E) and Kentucky Utilities (KU) – announced theyclosed their merger deal yesterday, setting the stage for thecombined energy company to become a “more formidable” regionalutility competitor.
The successor company to the merger transaction is LG&EEnergy Corp., parent of LG&E, of Louisville, KY. The combinedutility concern has electric and natural gas assets worth more than$5 billion and a market capitalization of more than $3.3 billion,and will serve more than 1.1 million customers in Kentucky, as wellas a parts of Virginia and Tennessee.
Under the merger, LG&E Energy, an exempt holding company,will control both KU and LG&E. KU, which will continue tooperate in Lexington, KY, owns nine power plants in the state, 99%of which are coal fired, and has enough electric distribution andtransmission facilities to serve 77 of the state’s 120 counties. Itdoes not have any gas assets. LG&E, on the other hand, owns andoperates 3,600 miles of gas distribution, 178 miles of transmissionand five underground gas storage reservoirs in Kentucky, as well aselectric generation, transmission and distribution facilities. Themerger also includes LG&E Marketing, a power marketer.
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