LOUISVILLE, Ky. — Only one major hurdle remains in the "unwind" transaction that would return the maintenance and operation of four electric generating stations in western Kentucky back to Big Rivers Electric Corporation and deliver $670 million to that region's economy.

E.ON U.S. notified the Kentucky Public Service Commission today that it would accept the added condition imposed on it in the KPSC's March 6 order associated with the early termination of the lease agreements between E.ON U.S.'s subsidiary, Western Kentucky Energy Corp., Big Rivers and related transactions. In that order, the KPSC required E.ON U.S. to pay an additional $60.9 million to benefit residential and certain other rural customers. Big Rivers also notified the KPSC today that it will accept the conditions placed upon them.

However, consent from Henderson Municipal Power and Light is still needed. Without it, the "unwind" will not be completed.

Commenting on the HMP&L situation, Paul W. Thompson, E.ON U.S. senior vice president of Energy Services, said "We have had several conversations with HMP&L management this week to secure their consent. Even though the KPSC acknowledged that E.ON has proven HMP&L's plants to be in good working order and the proposed consent payments reasonable, E.ON U.S. has now very substantively increased the cash payment to address all of HMP&L's stated concerns.

"Under the proposed "unwind," HMP&L would retain all of the contractual protections from the existing contracts, plus receive i) compensation that is larger than under the current contracts for all future excess energy production and ii) a substantial cash payment from E.ON U.S. at closing. HMP&L receives absolutely none of this should the "unwind" not proceed," added Thompson.

The "unwind" helps secure affordable electricity for the area's aluminum smelters, Rio Tinto Alcan and Century Aluminum, thereby enhancing the preservation of the nearly 5,000 jobs in western Kentucky dependent on the smelter operation. And, with E.ON U.S. agreeing to the KPSC's condition to pay an additional $60.9 million to a reserve account, potential future rate increases for most customers will be reduced.

Based upon schedules of all the parties involved, HMP&L's consent is needed on or before March 23.



E.ON U.S., headquartered in Louisville, Ky., is a subsidiary of E.ON A.G., the world's largest investor-owned energy services provider. E.ON U.S. is a diversified energy services company that owns and operates Louisville Gas and Electric Company, a regulated utility that serves 326,000 natural gas and 401,000 electric customers in Louisville and 16 surrounding counties, and Kentucky Utilities Company, a regulated electric utility in Lexington, Ky., that serves 536,000 customers in 77 Kentucky counties and five counties in Virginia.