October 14, 2005

State, fed may seek damages from PPL

NEW YORK (Reuters) - Power company PPL Corp. on Friday said
several state and federal agencies are considering
environmental damage claims due to a leak at a Pennsylvania
power plant.

The company also cut its estimate for reported earnings in
2005 due to a third-quarter charge from clean-up operations
from the leak.

In August, about 100 million gallons of ash and water
poured out of an ash basin at its Martins Creek power plant
into the Delaware River and on to surrounding roadways and

PPL said in a regulatory filing that the leak has been
stopped and it is working on the removal of ash from the river.

It received a Notice of Violation from the Pennsylvania
Department of Environmental Protection (DEP) in September, and
the company said the DEP is considering various information to
determine the penalty.

The Commonwealth of Pennsylvania, the State of New Jersey,
the U.S. Fish and Wildlife Service and the National Oceanic and
Atmospheric Administration have also indicated that they are
considering natural resource damage claims against the company,
PPL said.

It may also face lawsuits from the Delaware Riverkeeper
Network and the Delaware Riverside Conservancy.

The company said it was still working with the Pennsylvania
DEP to assess the extent of the environmental damage from the
spill, but said independent analysts hired by PPL have found
drinking water in the area to be safe and no short-term damage
to aquatic life in the river.

PPL said it could not predict the final cost of legal and
regulatory actions against the company. The company said it now
expects reported earnings in the range of $1.73 to $1.83 per
share in 2005 as a result of the $33 million charge for
expected costs relating to the Martins Creek leak.

PPL said that it is maintaining its 2005 and 2006 earnings
forecasts from ongoing operations. It expects earnings of $2 to
$2.10 per share this year and $2.15 to $2.25 in 2006.

Analysts currently expect earnings in 2005 of $2.06 in 2005
and $2.24 in 2006, according to Reuters Estimates.