Good morning, and welcome to the PPL Corporation Fourth Quarter 2013 Earnings Conference Call. (Operator Instructions). Please note this event is being recorded. I would now like to turn the conference over to Joe Bergstein, Vice President of Investor Relations. Please go ahead.

Thank you. Good morning, everyone and thank you for joining the PPL conference call on fourth quarter results and our general business outlook. We are providing slides to this presentation on our website at www.pplweb.com. Any statements made in this presentation about future operating results or other future events are forward-looking statements under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from such forward-looking statements. A discussion of the factors that could cause actual results or events to vary is contained in the appendix to this presentation and in the company's SEC filings. At this time, I'd like to turn the call over to Bill Spence, PPL's Chairman, President and CEO.

Thanks Joe. Good morning everyone and thanks for joining us today. On the call with me are Paul Farr, PPL's Executive Vice President and Chief Financial Officer, and three of our four Presidents for our business segments; Rick Klingensmith was unable to join us today. My opening remarks will cover 2013 earnings, our 2014 earnings forecast and operational highlights. I will ask Paul to cover our financial results in more detail, including the performance by segment, and of course, we look forward to your questions at the end. Let's start with the announced dividend increase effective with the April 1 payment. The new annualized rate will be $1.49 per share, up from $1.47 per share previously. This increase represents the twelfth increase in 13 years, and reflects a 181% increase over that period. Turning to earnings; today we announced 2013 reported earnings of $1.76 per share compared to $2.60 a share a year ago. Adjusting for special items are earnings from ongoing operations were $2.45 per share, exceeding both the top end of our 2013 forecast and our 2012 earnings from ongoing operations. The most significant special item was a fourth quarter after tax charge of $0.62 per share related to the termination of a lease agreement for the Colstrip power plant in Montana. That lease termination will facilitate the previously announced sale of our Montana hydroelectric assets to Northwestern Energy. For the fourth quarter, I reported loss of $0.16 per share, including the Colstrip lease termination charge. Quarterly earnings from ongoing operations were $0.60 per share, an increase from $0.49 per share a year ago. We exceeded the top end of our 2013 ongoing earnings forecast range, because of the exceptional performance of each business segment. We saw increased earnings from each of the three regulated segments, and continued…

Thanks Bill and good morning everyone. Let's move to slide 10; our strong fourth quarter reflects higher earnings from each of our operating segments compared to 2012. Quarterly earnings at our regulated businesses increased, driven by improved gross margins due to higher base rates in Kentucky, higher U.K. revenues on higher prices, and higher transmission margins in Pennsylvania, due to capital investments in grid infrastructure. In the Supply business, we experienced improved quarterly earnings, primarily due to higher nuclear generation output and higher capacity prices, partially offset by lower baseload energy prices. Full year 2013 earnings from ongoing operations increased over last year, due to strong performance from our domestic and U.K. utilities. This performance was partially offset by the expected lower supply segment earnings, and dilution of $0.27 per share. Let's move now to a more detailed review of 2013 segment earnings drivers, starting with Kentucky on slide 11. Kentucky earned $0.48 per share in 2013, a $0.15 increase compared to 2012. This increase was due to higher retail margins, primarily due to higher base rates, that went into effect on January 1 last year for LG&E and KU, and higher earnings from environmental CapEx. These positive margin drivers were partially offset by higher depreciation and dilution of $0.04 per share. Moving to slide 12; our U.K. business earned $1.32 per share in 2013, a $0.13 increase over 2012. This increase was due to higher utility revenue, primarily due to the April 1 price increase that impacted all four of our utilities, and lower U.K. income taxes as a result of a lower effective tax rate; partially offset by higher O&M expense, largely due to higher network maintenance costs, higher depreciation due to higher network investments and dilution of $0.14 per share. Turning now to slide 13; our Pennsylvania…

Thank you, Paul, and operator, we are now ready to accept questions.

Thank you. We will now begin the question-and-answer session. (Operator Instructions). And our first question comes from Kit Konolige of BGC. Please go ahead.

Good morning gentlemen.

Good morning Kit.

So to follow a little bit on the projection of cash flow and CapEx. So in 2014, as you have described Paul, the proceeds from the sale of the hydro assets, gets you into positive territory on free cash flow before dividends. In our projections, going forward after 2014, you would continue to have a pretty significant deficit in that free cash flow before dividends. Can you talk a little bit about your financing plans for the significant rate base growth that you are talking about?

Sure. I think we have covered this in prior calls. We have front-ended quite a bit of the equity with the converged securities. We had the $1.150 billion that converted this past year, mid year, and we have got another almost $1 billion plus the equity forward that we did this past year. And then we have got almost $1 billion that's converting mid-year this year. You talked about the $900 million pre-tax that's expected from the sale of the hydro facilities. So as we look at our target credit metrics, we look at the internal cash flow which, as we move towards the back end of the plan from a domestic regulated utility perspective, gets much improved from where we sit today, given that we are starting to harvest cash from these significant investments that we are making in the infrastructure. We do get real time recovery of a very significant majority of the CapEx across the regulated utility space, the regulated utility segment. So, at this point in time, we don't forecast the need for equity beyond basically, what we have already got submitted to the company.

Okay. And can you talk to us a little bit about the outlook for rate cases in Kentucky and Pennsylvania, and the latest on the RIO proceedings? I think we had that update at the end of February I think on RIO on the ROE issue?

Yeah, starting with the U.K. on that point, Kit, we do expect the week of February 17 to have some signal on the ROE issue, and then final determination for our fast tracking by the end of the month. I will ask Vic Staffieri to cover the Kentucky rate case outlook, and then following that Greg Dudkin for the PA outlook.

Sure. Kit, we are looking at a rate case. We are analyzing the notion of the rate case filing some time in 2014, and we are in the process of that analysis right now. We are taking into account of what the capital construction, and are not otherwise covered by our (inaudible), as well as this test period that we are looking at right now. We haven't made a determination, when we would final the amount, but its something we are certainly considering for 2014.

Okay.

And this is Greg Dudkin on Pennsylvania. We do not intend to file our rate case in 2014, and we will continue to look at the needs beyond 2014.

Okay. Thank you.

And from Dan Eggers of Credit Suisse. Please go ahead.

Hey good morning guys.

Good morning Dan.

Hey good morning guys. Wrong phone. Just I guess real quick on the filing of the fast track decision. What information do you guys expect Ofgem to provide, as far as detailed financials and rate structure, and kind of the transparency into what that full package looks like, relative to what you guys gave last July, when you provided the earnings outlook?

Well I think just as a general proposition, we don't expect a lot of changes, because the plans themselves have been deemed as accepted as filed. So the key piece that we are looking for is, what they may decide on an ROE basis. So we do expect that to be a constructive outcome. We know that, based on our past experience, that they have been very balanced. They recognize our need to finance these companies and maintain strong financial metrics across the board, both for equity, as well as for the debt side. So we are hopeful that the outcome, when we get it, the week of February 17 will be a constructive one.

Then I guess Bill, just on the $0.04 drag this year because of the customer rebate. Do we add $0.04 on to next year, so this is the one time recalibration down and then you guys should earn that back, so we should -- to normalize where the U.K. is?

Yes. This is Paul. It will be spread over a couple of years, but yeah, we will get full recovery of that, including an equity carry component to the charge.

It's really just pulling forward some of the benefit of the rate reduction that was otherwise going to happen with the shaping of revenues. And as long as we are able to get that full carry, we were economically neutral, and we were happy to do it.

Got it. I guess just you know, maybe Paul or Bill, could you give an update on the thought process around Supply, kind of evaluating your options and where you see that business setting out and maybe, when we will hear the decision on strategic future?

Sure. As you know, our current plan is to optimize the plants, and we are continuing to aggressively look at our cost structure and our operations to optimize the value of the fleet. Having said that, we are certainly open to other opportunities and routinely assess the potential for adding further value in the supply business and with the overall portfolio in total. So, we are willing to execute on opportunities, as evidenced by our decision to sell the Montana hydroelectric plants.

Do you think there is a point, Bill, where you guys make an affirmative decision, whether Supply is part of PPL on a long run basis, or whether its not part of PPL -- I guess for a lack of a better word, is this just going to be a wait and see and we are going to bug you with this question every quarter?

I do get this question every quarter. We do think there is inherent value in this high quality fleet that we operate in upside potential, when we see the energy markets begin to recover. We are continuing on the plan to maintain a positive EPS contribution from that business to the company, and continue to believe that can be accomplished. But we are looking for opportunities to enhance the value all the time, and continue to assess options. I think its an ongoing process. There is no end date in mind, its continuous and we will continue to assess options for that business.

Okay. Got it. Thank you guys.

Our next question is from Julien Dumoulin-Smith of UBS. Please go ahead.

Hi good morning. Can you hear me?

Yes. Good morning.

Excellent. Is this the implied ROEs on your 2014 guidance for the Pennsylvania and Kentucky utilities? Can you talk about that for a quick second?

For 2014, we will look at between 8.5% and 9%.

And Greg, in Pennsylvania?

From a regulatory perspective, both, combining T&D, its about 10.8%.

Excellent. And then, going back to the supply business, could you talk a little bit more about the blade situation, just what the game plan is (inaudible) spring, in terms of outage timing and impact. Perhaps you could talk about that?

Sure. I will ask Dave DeCampli to cover that.

Yes Julien, there is two outages planned for this spring. We will be taking one unit off, just to do some modifications for the turbine blade situation. That will be a relatively short outage, during the month of March. Basically, we are going inside the turbine housings and removing some of the riveting in there, that disrupts the seam flow. We will also be replacing the turbine blades in that unit, to assure that we can get a full year run, till it connects refuel cycle in the spring of 2015. Unit 1 comes off for its refill outage, and within the scope of the refill outage, we will actually be doing a different modification to the -- this last rope of [suspect] turbine blades, will be installing a shorter redefined blade, that we believe will be likely part of the permanent solution. So the shorter blades will be installed, and it would be done inside the confines of the refuel outage duration in April and into early May. So we are doing two modifications, one on one unit, one on the other unit, both of which we think will contribute to the permanent solution to run two years, cycle to cycle.

Great, excellent. Could you talk about how much that costs, in terms of -- in your CapEx budget, and perhaps from a DTH perspective, if we were to normalize that out in 15 hours [27:42], just to make sure, we are not capturing that on a go forward basis?

Sure. The impact last year with the multiple outages we had to take, was about $30 million net income after tax impact. Forecast going forward for 2014 would be, a little more than half of that, and then of course, in performance year 2015, we expect to run full cycle.

The maintenance CapEx around those (inaudible) is not significant, relative to the normal budget for Susquehanna.

Excellent. And actually, since we are on the subject of CapEx, could you talk about a little bit, the shift in your 2014 CapEx budget? What exactly drove that? It looks like its WPD?

WPD was a small amount. We provided that update, at the time we filed the business plan in July. It's gone up a small amount. Most of the rest of it is relatively consistent with what the prior expected spending was. We did add, as I said earlier, between 14 and 17, $650 million of transmission CapEx. So the maroon bar on slide 17, that's a little more back ended. But we do some level of increased spending, starting in 2014.

Great. And then just lastly from a CapEx perspective, on timing of Susquehanna-Roseland CapEx. Should we expect a very disproportionate jump in earnings at the Pennsylvania utility? Just so you can just try to make sure we capture that project coming online and all that?

Its about -- of the improvements, the significant increase in margins, what I talked about for 2014 on that earnings log slide. Susquehanna to Roseland was about $0.04 to $0.05 of that total amount. So it’s the single biggest driver, and then the DISC program was about $0.02.

Great. And this should be continuing every year, right? To be clear?

Yes. That's correct.

Great. Thank you guys.

Our next question is from Neil Mitra of Tudor Pickering. Please go ahead.

Hi. Good morning.

Good morning Neel.

Paul, you referenced the $650 million in CapEx for transmission. Could you talk more about what those projects entail, as there are smaller projects, and whether you need approval or you can just file them through your formula rates?

Sure. Let me have Greg address that.

Yeah. These are all projects on our existing facility, so its basically rebuilding our older facilities. We had some transmission lines that were built in the 1920s, so its basically rebuilding those lines, reconductoring those lines. As well as, about $400 million for improving reliability, which means things like having automated switches, transmission switches, better relays, that type of thing. They are all going to be recovered through the formula rate.

And what ROE are you assuming you get on these?

Now it is 11.68.

And then, are there more projects on the horizon that you think you can add or is this kind of the -- and with the $650 million?

Well, this is our best look right now at our plant. So this is what we see as prudent investment. If there are other opportunities that arise, we will take a look at those.

Got it. And then around O&M optimization at the Supply business, could you talk about what you are specifically targeting, whether its reducing O&M around Susquehanna, and maybe what the normalized O&M inflation will be, going forward, at Supply?

Sure, as I indicated earlier, we did take out $40 million in costs last year in 2013. The items are really more related to the Fossil Fleet than they are to Susquehanna. We are not reducing O&M costs at Susquehanna. And on an ongoing basis, we are expecting flat O&M at the moment. But having said that, we are going to continue to look aggressively at ways we can reduce costs (inaudible), taking out the inflationary pressure.

Okay great. Thank you.

Sure.

Our next question is from Paul Patterson of Glenrock Associates. Please go ahead.

Good morning.

Good morning Paul.

A lot of questions have been asked and answered. I just wanted to -- just in terms of the trading volume that you guys see in 2014 versus 2013, just the -- call it vortex or what have you, some more volatility. Any change in the outlook or anything that you could share with us?

I would say, the only change there is more volatility obviously in the forwards, which to some degree, we have taken advantage of by layering some more hedges for 2015. We are already fairly highly hedged coming into 2014. But we were able to take advantage of that at hedge price levels that are at or above our business plan. So that had a positive impact. If you look at the overall mix between our generation of retail, the net effect of the weather in January, we expect to be positive, although we have not closed the books yet for January, but on a net basis, we still expect January to be positive to our EPS.

Okay. And then what sort of a forecast for trading volume in 2014 versus 2013? Has there been a change in that, or how should we feel about that?

No. Pretty much the same, no change. As you know, for us it’s a fairly immaterial part of the overall earnings and business mix.

Okay. Now, with respect to the transmission spend, should we expect any significant change in transmission capability, or is this just pretty much reliability kind of spending, when you are talking about this, reconductoring or what have you?

Well I think from a capability, Susquehanna-Roseland is a big piece. The other ones are, improved reliability of our system. So its improving the reliability supply within our system, within PJM.

Okay. Then finally, the RPM outlook. Given that we now have that GR ruling, plan parameters come out, MOPR exemptions, could you -- would you like to share with us what your thoughts are, about what's going to be coming after (inaudible)?

Well, with the planning parameters having just come out, we are still in the process of assessing and modeling what does it mean for PPL and the poll in general. So we haven't completed that work year, but we are continuing to take a look at what all this is likely to mean. So unfortunately, I can't give you even a best guess at this point about what we think, until we finish that modeling.

Okay. Great. Thanks a lot.

Our next question is from Paul Ridzon of KeyBanc. Please go ahead.

Thank you. Can you just -- I don't want to beat on Montana too much, but have you had expressions of interest, have you shopped it around, and where in the process are we?

Well, on the hydro asset sale, let me just start there. That process is moving ahead as we had anticipated. Both state and federal applications have been filed. Back in late December, Northwestern Energy submitted their application to the Montana PSC and there will be a discovery process, followed by a public hearing, which is scheduled for early July at this point. We would expect the final FERC order by June, which is what we have requested, and we expect the Montana PSC to rule, hopefully by around the September timeframe. For the rest of the assets remaining out there, we are just continuing to assess what options we have for those, and there is really no new update on that front at the moment.

All [parties] have touched on this a little bit, but how much did the volatility hurt the retail business?

Again on a net basis for us, with the fleet that we have and with the retail, it’s a net positive for us. But clearly, there is a drag on the retail end. I don't really have figures on exactly, as I mentioned, we haven't closed the books yet for January, so its really premature to give you a number. But clearly, we expect it to be a net drag on the retail front, offset by a very positive outcome on the generating fleet side.

In between load following and retail, only a couple of thousand megawatts. If you go back to the, kind of 2008 shopping timeframe experience and everything that happened in that window, when the liquidity kind of drained up; retail and load following is a relatively small component of the total hedge book, and we expect -- to keep it at those levels growing organically and modestly. So you probably are -- you may be trying to triangulate what others are experiencing, but it’s a small piece of PPL.

Got it. So (inaudible) that long?

Yes.

Okay. Thank you very much.

Our next question is from Steven Fleishman of Wolfe Research. Please go ahead.

Yeah. Hi guys. Just a question on the CapEx and rate base slide. It looks like your CapEx over the next four years is up over $1 billion, but the rate base numbers are actually pretty much the same, or even a little lower in the initial years. Could you explain that?

I am just kind of taking a quick look at those slides right now. The U.K. is up a bit in terms of kind of improved FX assumptions and other things that we have layered on. I talked about, at the front-end, the $650 million -- actually, when you wrap in 18, versus where we originally thought 18 was going to be at, transmission and distribution reliability in Pennsylvania is up by almost $1 billion. We will have to get back to you in terms of that net increase, and looking at 17. We were at roughly 28. Some of this transmission spend does go in more towards the back end, so you wouldn't start to see that, until we are being [gathered] in, till we get closer to the back end. But we can get back to you on the differential on the net rate base.

Okay. Great. And then on the -- could you just may be update us on your currency hedge position?

Yes. So for 2014, between the actuals and the books and where we sit with hedges, we are in excess of 92% actually hedged for the current year, and we are very materially hedged in the 70% to 80% range for 2015 as well. Right around $1.59 for this year hedges, and close t o$1.61 on next years.

Okay. Great. Thank you.

Thank you, Steve.

Sure.

The next question is from Michael Lapides of Goldman Sachs. Please go ahead.

Hey guys, congrats on a good quarter. Got a question for you, how are you thinking about O&M and cost management? Once you kind of get the final ruling out of Ofgem in the U.K. I mean, over the years, you have been one of the -- you've been basically the best operator from an O&M and cost per megawatt hour and other metric performance. How are you thinking about the ability and kind of the direction O&M will take over the next seven or eight years in the U.K.?

Sure, I will let Paul answer on that one.

Yeah, I would expect that we maintain the spending kind of for our plans, including what was filed with the RIO-ED1 plan. A lot of the costs, the efficiency that we are able to get out of the Midlands has been taken out. So I am certain, that there are some modest things that we can do around, continued supply chain optimization and other things. But we spend the dollars on the network to create the reliability, which drives our opportunity to outperform the bonus revenue targets. And so, everything that we look at, is done on a complete cost benefit basis, not for short term drivers and spending that we are doing in the Midlands now, some of it is literally catch-up spending that EON hadn't performed, and we will continue through that, through the end of the DPCR5 period. And then again, the plan is to spend, pursuant to the things that we are driving the net income numbers at -- that we provided on July 1 last year. We will update those numbers, once we can internalize the final RIO-ED1 outcome from a fast track perspective. But I wouldn't see cost reduction efforts being material in the U.K., as we move forward.

Okay. I wanted to ask a question about lag in Kentucky. I know you get the environmental costs are covered via the ECR, what about the cost recovery on the two combined cycles? Is that only recovered via traditional GRCs or rate cases or given that some of that is being built to replace some of the retiring coal units, any chance to eventually get recovery via a path to return mechanism?

No. Today, they are only recoverable through general rate case.

Okay. Thanks guys.

Sure.

Our next question is from Gregg Orrill of Barclays. Please go ahead.

Thanks. I guess you've really touched on this already, but in Kentucky, just drivers for the rate case filing that you are going to be making?

I mean, the driver is the new construction, the combined cycles that we just discussed very briefly there. Its going to be the -- how much capital investment we will spend between now and the end of the year, we want to recover that obviously, and so we are looking at what's the optimum time to file a case, given the stream of expenditures, as well as the test periods and what are the future rate years in the offerings. So those are the analysis. But it really will be driven by the capital investment that's not recoverable through the ECR.

Thanks.

You're welcome.

Our next question is from Nathan Judge if Atlantic Equities. Please go ahead.

Hi. I just had a question on Kentucky as well. What's the current ROE for the last 12 months?

10.2.

10.2. So is the reduction in earned ROE that you expect in 2014 related to regulatory lag, or is it -- because that sounds quite a bit?

It has got a log, it has got increased OEM expenses, because we have inflation, we have wage increases. We have got some additional outages that we didn't have in the 12 months ended, 12/31/2013. And then of course, the additional capital spend, that's otherwise recoverable through the ECR. Those are the drivers. As well as, we have modest load growth. We are using about 0.5%. So we don't have that much load growth to offset inflation and wage increases and the like. That's what's really driving it.

Okay. And so, kind of speaking beyond through 2015 and the flow-through of rate case. I mean, if you file this in 2014, when would we see returns get back to those levels, that would be more acceptable?

We generally look to file rate cases when we (inaudible) 9% on an ROE basis, so we would -- if we filed in say June of 2014, new rates would go in effect on 1/1/2015. So its about a six month lag between filing the case and the new rates going into effect.

Just generally on overall company, could you just give us an idea of the swing in pension expense this year versus last?

Yeah. So for 2014, we'd expect across all the segments, about a $0.07 improvement in pension, running through the P&L, about a nickel of that in the U.K., and then about $0.02, pretty much evenly split between Kentucky, and then the balance of EU and Supply.

Okay. Thank you. Just finally, on the Supply business, especially on the retail. Given that it is a small part, we have seen from your peers that, its not providing the kind of return to invested capital that other opportunities are posing for them. How do you think of that business, given how small it is, and the kind of returns its obviously providing right now?

Well, the biggest value for us is really on the ability to hedge the output of some of our fleet. So we look at it really as a tool, that we can use among other tools, to place the generation into the marketplace. So that's the primary purpose of it. I think, in terms of incremental investments to go beyond that, its not something that we are focused on. We are obviously, very focused on the regulated side of the business, and incremental capital that we have is going into the regulated side of the business.

Is the capital employed and not (inaudible) business is more or less than what it would be, if you went on and hedged it?

It would be less than if we went out and just get straightforwards or collars where we'd -- on a mark-to-market basis to the extent that prices go against us and rise after we lay in those hedges. We are posting collateral at the ICE and NYMEX and the exchanges, given that the OTC side of things is pretty much kind of dried up. So if we use the traditional hedges, and we do -- as we do expect to see a rising price environment, we'd be joint on LCs and cash postings to be able to meet those calls. So on a working capital basis, it consumes less.

So how much of your retail provides hedge to your overall generation then?

Less than 20% I guess -- 9% and 14%.

Converging that, it would make sense for you to increase that business, right?

Well yeah, we have lived through. We just got then, answering a couple of questions on, what retail load experienced here in the month of January, which has clearly been negative; because the weather has been -- we forecast normal weather ranges around the volatility in that load, plus volatility around things like shopping. The weather has truly been exceptional in January, and even in the front part of February here. So as I said earlier in my comments, we have lived through some of this volatility in the past, in 2008 and 2009, when shopping levels were high. We will plan to keep this business to be relatively modest in size. It’s a good natural hedge, because most of the hedging we are doing, is to customers' right in the same neighborhood, that this generation has been hedging, since it has been built. So we've looked for us to be aggressive in adding to that. But there will be periods of time when that retail book provides better return opportunities than agendas and periods like in January and February, where the gen provides the better value proposition if you will of the total margins. But we will continue to modest in retail.

I would just add that, when we look at retail, you have got to look at of course, what are the margins that that business can achieve, based on the competition in the marketplace, and is that incremental margin compared to your opportunities worth the incremental risk that you are picking up. So as Paul mentioned, on the positive side, you can lock in basis, but you can't necessarily lock with standard products. You don't have the collateral. It’s a good for us, a good match to our generation. So those are the positives. But on the negative side, your margins may not be commensurate with the risks that you are taking on. So we have to balance all of that, and then assess what's the proper and appropriate level of hedging we want to do, via the retail market.

Okay. Thank you very much.

Our next question is from Anthony Crowdell of Jefferies. Please go ahead.

Hey good morning. I just want to ask the 100th question on Supply and O&M. Just trying to get more granularity on may be how you can manage this and how low it could go. What's a good, range to use for -- if I wanted to model out for the power plants, a good like say, O&M per KW for like nuclear and coal assets that you guys have?

Well, on the nuclear side, as I mentioned earlier, we are not looking to necessarily cut the O&M. That's the unique asset and we don't want to take any chances with not fully supporting the plant. So when you look at the O&M on a KW basis, on the other facilities, the fossil and hydro, that's something we continue to benchmark and look at best practices. I don't have the number off the top of my head that I can give you, so I will just say that we are going to continue to look for opportunities to aggressively cut costs where we can, and I think what we did in 2013 with the $40 million, it was an appropriate level and its probably in that kind of a range that you are going to see going forward, that may be, we can continue to target taking out. But beyond that, really hard to answer that question without more benchmarking.

We do have verified, on our nuclear assets that we benchmark extremely well in O&M costs per KWH or KW as compared to other fleet units, new unit fleets and [new] unit standalone facilities as well. So we are really well in the game with our O&M costs, with the nuclear facility.

How about kind of like taking a second bite at the same question? When I look at say, 2012 OEM for Supply was like $1.40 billion. You knocked out $40 million. So 2013 is about $1 billion. How much of that is for like power plant and maintenance, versus may be other stuff that's in that line item?

Its about an 80-20 split. Between 80% being that applied more direct to the supply business, 20% being more of the corporate and other overheads. And of that 80%, probably, I would say about $600 million to $700 million of that is direct O&M, associated with plant operations.

Great. Thank you.

You're welcome.

Our next question is from Jonathan Arnold of Deutsche Bank. Please go ahead.

Good morning guys.

Good morning.

Just quickly on the U.K., you said that -- you are hopeful of a constructive outcome on cost of equity. Can you give us a sense of -- does that mean, it is constructive in your mind, no change from what you filed, or it is constructive, sort of in line with the suggested 80 basis points that they talked about, when they -- I guess, came out with the initial fast tracking. Any color on that, relative to your guidance range (inaudible)?

Constructive to me would be something less than the outcome that they saw on Ireland, and I would say that, our expectations -- its hard to gauge, but would be that, Ofgem would take a look at our specific performance and accordingly, grant us something that's reasonable. But I would say, if it came out somewhere in between, we'd just have to kind of assess. But I would expect if its not the status quo meaning no change, its going to be something -- I would hope, its something less, and we just have to assess, once we get to that point what that means, and what actions, if any, we would take as a result.

And when you say, less, as in less significant a reduction?

Yes.

Yes. Okay. Then just in terms of -- to understand the process, have you effectively been fast tracked to a pending, accepting an outcome on the ROE piece, sort of in your court, when that decision comes out, or has that decision already been taken, you are sort of -- and I can't remember whether -- what your options are at that point?

We could -- depending right now, we are waiting for the February 17, that week for an outcome on the ROE. We will then assess what our options are at the end of that period. However, my understanding is, that we could go the slow tracker out, if we weren't happy with the outcome. But I think that might be unlikely, given the value and the benefit of the incremental revenues that you get by fast tracking. So I would think that that's a low probability, but again, we have to wait and see what Ofgem tells us in the outcome, on the week of the 17th, and assess where we are at that point.

Thank you, Bill.

Our next question is from Brian Chin of Merrill Lynch. Please go ahead.

Hi good morning.

Good morning.

Just to follow-up on John's question. In the -- let's hope unlikely event, that the ROE decision is not as constructive as you deem. Can you give a sense about how long your assessment period might be, before you notify what your course of action is going to be?

I think it would be relatively quick, probably within a week.

Okay. And then, I did hear your -- as a second separate question. I did hear your answer to Paul Patterson on RPM. Just one small question on RPM still. We did notice that the PPL region was broken out separately by PJM, and they have indicated that regions that were broken out separately, were due to potential future generator deactivations in each LDA. Now, it doesn't look like the PPL region is particularly transmission constrained, so it would seem as though, potential future generator deactivations is what they are concerned about. Any color as to why the PPL region was one of the three regions that PPL broke out, because of that thought process?

I really don't know why I would not think that its bigger than, at least not predominantly, by generator deactivations. I am not aware of any significant generators that are planning to retire, and its certainly, none of the PPL generators. So until we get more clarity on that, I am not exactly sure why they believe it could break out.

Very helpful. Thank you.

Sure.

The next question is from Shar Pourreza of Citigroup. Please go ahead.

Good morning everyone.

Good morning.

Most of my questions have been answered, but let me ask you on your fuel hedges. Despite the move that we have seen in gas, you've seen coal prices kind of come off, but your hedge profile hasn't really changed, at least at the long end of the curve. Could you may be just comment on, whether you've been able to layer on, some more fuel hedges, at least on the coal side post Q4?

Sure. Dave?

Our coal hedges for 2014 are standing at about 94% and in 2015, about 63%. Beyond that, we are just continuing to take a look at the price of coal, market prices for energy, and we will hedge in, as appropriate. But we stand currently at 94% and 63% for 2014 and 2015.

Okay. And your fuel hedges -- your coal hedges haven't changed for 2015, right? Since EEI?

No. Not materially. But for the last couple of years, we have also rolled some coal in contracts and pile into the subsequent year. So again, depending upon where we see capacity factors, especially this spring and fall, you could see some movement, ultimately between the years as well. The value of the hedge is the value of the hedge, so we have captured that. But we are cognizant of the decline or the trending in the decline in coal prices, and we will monitor that. But I don't think, we are going to be actively pursuing significant increases in these hedges in the near term.

Got you. Got you. And just one last question, have you and your native load around the service territory, have you seen any third party retail providers exit the system? Given the recent volatility?

I don't know that we have seen any material ones. I think we have heard a few, very small providers going out of business. But we don't really have a lot of data points, to be honest.

Okay. Thanks very much.

Operator, we are coming up on the 60 minute mark here, so we will take one more question please?

Our last question is from Brian Russo of Ladenburg Thalmann. Please go ahead.

Hi good morning.

Hi.

Just, could you update on the Colstrip Unit 4 repairs, have they been concluded, and is the unit back online?

Yeah, this is David DeCampli. Colstrip Unit 4 came back online full power in late January. So it is returned to service.

Great. Thank you.

Okay, you're welcome. Okay, operator, I believe that's it, and thanks everyone for joining us today.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.