PPL Corp. (NYSE:PPL) continues to expand its generation portfolio through adding traditional properties as well as renewable assets. The company announced that its subsidiaries Louisville Gas and Electric and Kentucky Utilities, LLC (“LG&E and KU Energy, LLC”) have filed for certificates of public convenience and necessity with the Kentucky Public Service Commission to build two projects. The current development plan was initially announced in October last year.
The first of these generation projects involves the construction of a natural gas combined-cycle generating unit (“NGCC”), with a capacity of 700 megawatts (“MW”). PPL Corp. plans to invest about $700 million to develop this NGCC unit, at its existing facility in Green River site in Muhlenberg County, KY. The new facility is expected to be online in 2018. This project is anticipated to generate approximately 40 permanent full-time jobs and several hundred construction jobs in western Kentucky.
For the second project, PPL Corp. plans to invest roughly $36 million at its Brown generating station to build an approximately 10-MW solar facility. The company expects this facility to start operations from 2016.
The current projects, if approved, will make up for the shortfall in generation from the idled plants.
We know that the U.S. government continues to roll out new mandates to control carbon emissions from power generation. In Sep 2013, the U.S. Environmental Protection Agency (“EPA”) proposed the Clean Air Act standards to curb carbon pollution from new power plants. The EPA plans to implement this new standard to back President Obama’s Climate Action Plan, announced in Jun 2013.
To meet government regulations, PPL Corp. continues to revamp its existing infrastructure and expand its renewable asset base. The company is currently withdrawing 800 MW of older coal-fired generation assets at Cane Run, Green River and Tyrone stations and is constructing a 640-MW NGCC unit at the Cane Run Generating Station in western Louisville.
In fact, investment in renewable assets is common for PPL Corp. The company has invested $245 million to replace an old powerhouse at the Ranibow Dam hydroelectric facility.
PPL Corp. currently has a Zacks Rank #3 (Hold). However, some better-ranked stocks in the same sector include Wisconsin Energy Corp. (NYSE:WEC), The AES Corp. (NYSE:AES) and ALLETE, Inc. (NYSE:ALE). While Wisconsin Energy holds a Zacks Rank #1 (Strong Buy), The AES Corp. and ALLETE carry a Zacks Rank #2 (Buy).