(LOUISVILLE, Ky. - November 10, 2005) As a result of recent significant downward movement in natural gas prices, Louisville Gas and Electric Company (LG&E) has asked the Kentucky Public Service Commission (KPSC) to approve lower natural gas rates effective Dec. 1, thus reducing a residential customer's typical natural gas bill by about 12 Percent.

This unprecedented action by LG&E is designed to help customers immediately offset the high cost of natural gas at the start of the 2005 - 2006 heating season. LG&E adjusts the natural gas portion of its bills on a quarterly basis and was authorized by the KPSC only last month to increase the natural gas portion of its bill for the November through January quarter, resulting in an increase of 64 percent in the typical residential gas bill. In view of recent pricing developments, however, LG&E is asking the KPSC to approve a revision to natural gas rates to reflect lower-than-expected natural gas costs. While gas costs will be higher this winter than last, this request should offer some relief and, following KPSC approval, will allow lower-than-expected gas costs to be reflected in customer rates for gas service beginning Dec. 1.

Expected natural gas prices [as reflected on the New York Mercantile Exchange (NYMEX)] have decreased significantly in the last several days. At the time LG&E made its filing for rates to become effective Nov.1, expected natural gas prices were about $15/MMBtu and have now decreased to about $12/MMBtu. The decrease in expected prices is due, in large measure, to increased supply availability as hurricane-damaged facilities are restored to service and decreased demand as a result of milder temperatures. At the time LG&E had proposed rates to become effective Nov.1, 80 percent of the natural gas production in the Gulf area was off-line due to damage caused by Hurricanes Katrina and Rita. Currently, only about 45 percent of production remains off-line. Recovery efforts, combined with warmer-than-normal weather have caused expected natural gas prices to decrease.

If the new adjustment is approved by the KPSC, a typical residential customer with average usage of 80 Ccf per month will pay about $126 per month. That amount compares to about $88 per month based on the costs for the same quarter one year ago - but will be lower than the natural gas charges of $144 per month that took effect on Nov. 1.

LG&E's gas supply costs are passed directly to customers on a dollar-for-dollar basis following review by the KPSC. If gas supply costs increase, so do natural gas bills. Likewise, if costs decrease, bills are reduced. Any over-collection or under-collection is adjusted in subsequent billing periods to eliminate any company gain or loss from the pass-through.

"Although natural gas prices are still at record levels nationally, we want to pass along the savings associated with an improving situation in the Gulf and warmer-than-normal weather," said Vic Staffieri, LG&E Energy's Chairman, CEO and President. "While these savings will provide some relief, we understand that any increase places a burden on our customers and urge them to take measures to control usage this winter."

LG&E uses its gas in storage as a hedge to protect customers from price volatility. The savings to customers from the requested adjustment could not have been realized if the company had been locked into higher prices for the supply it must purchase this winter. Historically, LG&E's natural gas costs have been lower than the state and national average due to storage and economic purchasing strategies.

Customers should contact LG&E prior to their bill due date if they know they will not be able to pay their bill so the company can establish satisfactory payment arrangements. For more information on energy-saving programs, heating tips, or available financial assistance, visit www.lgeenergy.com.

LG&E Energy LLC, headquartered in Louisville, Ky., is a diversified energy services company. LG&E Energy owns and operates Louisville Gas and Electric Company, a regulated utility that serves 318,000 natural gas and 390,000 electric customers in Louisville and 16 surrounding counties, and Kentucky Utilities Company, a regulated electric utility in Lexington, Ky., that serves 518,000 customers in 77 Kentucky counties and five counties in Virginia.