KU Energy and LG&E Energy have announced a merger agreement that could save the companies more than $760 million over 10 years and result in a rate cut of almost 2 percent for each of the next five years.
KU Energy, the parent company of Kentucky Utilities Co., and LG&E Energy, the parent of Louisville Gas & Electric Co., on May 21 announced the agreement to merge into a new holding company called LG&E Energy. The transaction is valued at more than $3 billion, with the combined companies holding assets of more than $4.7 billion.
The predicted $760-million nonfuel savings would come from integration of the companies' operations and joint planning and purchasing. The companies will freeze rates over the next five years and estimate the merger will result in rate cuts of almost 2 percent each of those years.
Roger W. Hale, chair and CEO of LG&E Energy will serve in the same capacity at the new company. Michael R. Whitley, chair and CEO of KU Energy, will become vice-chair, president and COO. "This transaction will, no doubt, further secure our rank in Kentucky and Virginia as one of the lowest cost areas for energy supply," Whitley said.