(LOUISVILLE, Ky. – December 17, 2004) Today, LG&E Energy announced a series of facility improvements to enhance electric reliability for customers and cleaner air for all Kentuckians. The total investment value from LG&E Energy and others will exceed $2.3 billion. The new improvements include: $659 million for new sulfur dioxide (SO2) removal equipment (scrubbers) at KU's Brown and Ghent plants; $76 million in upgrades for LG&E's Ohio Falls hydroelectric facility; an estimated $450 million in potential investment for three new hydroelectric facilities at the existing Smithland, Cannelton and Meldahl dams; and today's filing for a Certificate of Convenience and Necessity (CCN) with the Kentucky Public Service Commission for a $1.2 billion state of the art generator addition at the company's Trimble County Generating Station.

New SO2 scrubbers will be added to existing coal fired generating units at KU's Brown and Ghent generating stations if approved by the Kentucky Commission. These will supplement existing scrubbers at Ghent and other LG&E Energy facilities. The investment will promote cleaner air and guarantee further SO2 reductions in the company's service territory. LG&E Energy has been a pioneer in the electric power industry in the use of SO2 scrubbers since the 1970s. As planned, these environmental equipment upgrades will be completed by 2009. A CCN for these SO2 scrubbers will be filed with the Kentucky Commission next week.

The company also will perform a major overhaul and upgrade of LG&E's existing Ohio Falls hydroelectric facility at McAlpine Dam in Louisville. The upgrade, to be performed over the next eight years, will extend the life of this 1920s-era renewable energy facility and expand its output from 80 MW to 100 MW. The upgraded plant will have no air emissions and no impact on the flow of the river.

The company's plans include a long-term electric supply agreement with WV Hydro, Inc., a respondent to the company's April 2003 Request for Proposals for additional power supplies. Subject to completion of detailed agreements and regulatory approvals, WV Hydro would construct 240 MWs of new renewable hydroelectric stations at three existing dams on the Ohio River and would sell the power to LG&E Energy. The facilities could be operational in stages from 2010 to 2013, and would have no air emissions and no effect on the flow of the river.

Also under the CCN filed today, LG&E Energy is requesting approval from the Kentucky Commission to construct a new 750 MW generating unit (TC2) at LG&E's existing Trimble County Station. The support of LG&E Energy's parent company, E.ON AG, for this investment was reported last month. This new TC2 unit will be powered by an advanced super-critical pulverized coal boiler that includes the latest technological advances in efficiency and environmental controls. TC2 will be the most environmentally friendly coal-fired unit in Kentucky with lower permit limits for SO2 and nitrogen oxide (NOx) emissions than any other existing or currently planned coal unit in the Commonwealth. With other adjustments to the existing Trimble County generating unit, SO2 and NOx emissions from the entire facility will not exceed currently permitted limits for the Trimble County site, even after the addition of the new unit. TC2 will be owned 75% by LG&E Energy and 25% by Illinois Municipal Electric Agency (12.1%) and Indiana Municipal Power Agency (12.9%), which together also own 25% of the current Trimble County generator unit. LG&E Energy's portion of TC2 will primarily serve the KU service territory. The new unit is scheduled for completion in 2010.

These announced air quality and electric reliability enhancements are all in addition to recent improvements in two other areas. SO2 scrubbers and NOx removal equipment have either been completed or are currently under construction by LG&E Energy at other Kentucky plants for a cost of $629 million. Six low-emission, gas fired combustion turbines for peak demand power were completed late last year, also at the company's Trimble County plant, for an additional $340 million. These improvements, including those announced today, will also better position the company to meet federal proposed limits on air emissions for mercury and to address carbon dioxide restrictions when imposed in the future.

"LG&E Energy takes its responsibility to safeguard the environment seriously," said Vic Staffieri, Chairman, CEO and President. "That's why we've embarked on this plan to enhance the environmental performance of our plants and further expand and diversify our energy sources to promote electric reliability. Our customers deserve no less."



Members of the E.ON family of companies, LG&E serves 312,000 natural gas and 384,000 electric customers in Louisville, Ky., and 16 surrounding counties, while Lexington, Ky.-based KU serves 512,000 customers in 77 Kentucky counties and five counties in Virginia.