LG&E Energy said yesterday it plans to reduce its5,500-employee workforce by 250 positions (5%) over the next fewmonths in an effort to streamline and further integrate its twoutility operations, Louisville Gas and Electric and KentuckyUtilities. Enhanced early retirement and severance programs will beoffered to company employees to achieve the reduction. The companyhopes to achieve these reductions through voluntary means and willuse involuntary separation only as a last resort.

“While the decision to reduce our work force is difficult, it isconsistent with our goal to continue to integrate the operations ofKU and LG&E…,” said Victor A. Staffieri, president ofLG&E Energy. LG&E and KU, Kentucky’s two largest electriccompanies, merged in spring of 1998. The combined utility haselectric and gas assets worth more than $5 billion and serves morethan 1.1 million customers in Kentucky, as well as a parts ofVirginia and Tennessee.

As part of the continued streamlining process, LG&E Energywill step up its efforts to consolidate many of its smallerbusiness offices throughout the Commonwealth and replace them withenhanced telephone services and extended hour walk-up pay stations.Ultimately, the company plans to offer customers the option ofdoing business from their homes.

“By further integrating our utility operations and utilizingadvanced technology we can offer customers more options,” Staffierisaid.

In another announcement by the company yesterday, subsidiaryLouisville Gas and Electric Co. released plans to file forincreased rates at the end of the first quarter with the KentuckyPublic Service Commission (PSC). It hasn’t had a rate increase in adecade and plans to raise gas rates between $15 and $20 million inorder to recover higher costs for providing distribution services.Implementation is expected before this fall.

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