Delivering today for a brighter tomorrow

PPL CORPORATION 2017 SUSTAINABILITY REPORT PPL 2017 SUSTAINABILITY REPORT Girls inTrade Fair. fields duringthecompany’s annual opportunities forwomen intechnical high schoolstudentsabout career lineworker forPPLElectric, speaks to (Front cover) Ashley Harris,a responsible, reliable way thatbenefitscustomers,shareowners, employees andsociety asawhole. The following sustainabilitycommitmentsprovide aframework forPPLtogrow andinnovate ina commitments Sustainability Empower thesuccess offuture generations by helpingtobuildstrong communities today Strengthen communities engagement andenablesemployees toachieve theirfullpotential rewards performance, enablesprofessional development, encourages employee Cultivate success aninclusive, by energizing respectful anddiverse workplace that Foster anexceptional workplace Provide safe, reliable andenvironmentally responsible energy atthelowest reasonable cost Exceed customer expectations and efficientgridthatfosterscontinued progress andacleanerenergy future Invest intomorrow’s energy infrastructure by developing amore reliable, resilient Build tomorrow’s energy infrastructure and stakeholders tohave asustainableenvironmental impact Encourage responsible stewardship inpartnershipwithourcustomers Advance acleanerenergy future efficiency whilemaintainingaculture thatfostersinnovation Excel insafety, reliability, customerresponsiveness andenergy Drive best-in-sector operational performance improvement, environmental stewardship investments and enduringstrategic Create long-termvalue forshareowners through fiscaldiscipline, continuous Create shareowner extraordinary value DELIVERING TODAY FOR A BRIGHTER TOMORROW

TABLE OF CONTENTS

Message from our Chairman, President and CEO...... 2 About our company...... 3 Performance data...... 5 Sustainability commitments and priorities...... 8 About this report...... 9 Create extraordinary shareowner value...... 11 Drive best-in-sector operational performance...... 21 Advance a cleaner energy future...... 27 Build tomorrow’s energy infrastructure...... 40 Exceed customer expectations...... 43 Foster an exceptional workplace...... 52 Strengthen communities...... 59 Global Reporting Initiative index...... 63

1 2 PPL 2017 SUSTAINABILITY REPORT advancing research and development to enablemore distributed 2 gigawatts ofprivate solar intheU.K. alonein2017. We’re also In addition, we’re connecting more renewables tothegrid– generation ofthreats. security, bothphysical andcyber, toprotect againstanew some cases,andrespond more quicklyinothers.We’re enhancing technology andautomation thatallow ustoprevent outagesin flexibility. We’re makingthegridsmarter by incorporating power linesandsubstationsbuildingnew onestoimprove We’re makingthegridstronger and more resilient by replacing invest another$15billion. rising customerexpectations. From 2018through 2022,we will modernize thegrid,advance acleanerenergy future andmeet Over thepastfive years, PPLhasinvested more than$16billionto Delivering Today foraBrighterTomorrow outlined inthisreport (page8). stakeholders, we willstay truetothesustainabilitycommitments As we pursuethisstrategy, informedby feedbackfrom strong financialfoundation, andengagedevelop ourpeople. invest responsibly inasustainableenergy future, maintaina clear. We willdeliver best-in-sector operational performance, most ofthisopportunity, andtogrow responsibly, issimpleand Our long-termstrategy tofulfillthis responsibility, tomake the generations tocome. also have agreat opportunitytoshapeourenergy future for safely, reliably and affordably. As we make new investments, we As such, we have atremendous responsibility toprovide power has ever been. society ismadepossible by electricity. That’s astruetoday asit We recognize thatsomuchofwhatwe doandenjoy asa we take prideinpoweringAt PPL, everyday life. President andCEO Message from ourChairman, jobs through majorinvestments ininfrastructure improvements. our commitmentto supplierdiversity. We’re creating additional increasing spendingwithminority-owned businesses, reflecting PPL employees12,500 across thecommunitieswe We’re serve. our success. We’re providing family-sustaining jobstomore than We’re investing inthededicatedandtalentedworkforce thatfuels good inotherways. communities we we’re serve, committedtoremaining aforce for thatisessentialdeliver aservice tothequalityoflifein Beyond ourefforts toprepare forthefuture andtoreliably Making aPositive Impact onOurCommunities of ourcustomers,shareowners and society asawhole. conducted in2017, isnotonlyachievable, butinthebestinterest this goal,informedby ascenario-basedclimateassessment we dioxide emissions 70percent from 2010levels by 2050.We believe 2018,we set agoaltocutthecompany’sIn January carbon gas emissions from oursubstationsandreduce fleet emissions. efficiency across our U.S. and operations, cut greenhouse U.K. reasonable costtocustomers.Inaddition, we willimprove energy our obligationstoprovide atthelowest reliable service mix ofrenewables andnatural gaswhilecontinuing tomeet replacing ourKentuckycoal-fired generation over timewitha As we looktothefuture, we’re committedtodoingjustthatby opportunities toreduce theircarbonfootprint. climate change, it’s importantthatcompanieslike PPLidentify capabilities, alone, are notenough. As theworld confronts lower carbonfuture. Butwe realize thatenhancedgrid Creating asmarterandmore flexible gridwillhelpsupporta Supporting aLower CarbonFuture to seamlessly connect tothegridgoingforward. energy resources, includingenergy storage andelectric vehicles, William H.Spence Sincerely in PPL. We welcome your feedback,andwe appreciate your interest improvement. progress we’ve made, andwe’re committedtocontinuous impact onsociety. As we lookto thefuture, we’re proud ofthe shareowners, growing inasustainableway andmakingapositive what’s importanttousaswe focusoncreating value forour In closing,thepagesthatfollow provide adetailed lookat support communityinitiatives. 2017, PPLanditsfoundationscontributedmore than$10millionto fortunate andhelpthoseinneedourlocalcommunities.In strengthen education, expandopportunitiesforthoseless In addition, we continuetosupportcommunityprograms that CHAIRMAN, PRESIDENT ANDCHIEFEXECUTIVEOFFICER CHAIRMAN, H.SPENCEWILLIAM DELIVERING TODAY FOR A BRIGHTER TOMORROW

About our company PPL Electric Utilities Headquartered in Allentown, Pa., PPL Corporation. (NYSE: PPL) is one of the largest companies in the U.S. utility sector. The company serves more than PPL Electric Utilities Corporation 10 million customers in the United States and United Kingdom and employs more than 12,500 people. PPL Electric Utilities Corporation (PPL Electric) provides electricity Our mission is to provide gas and electricity safely, distribution and transmission services WPD reliably and at a reasonable cost to our customers and to about 1.4 million customers in eastern best-in-sector returns to our shareowners. We believe and central Pennsylvania and consistently our competitive earnings, growing dividend, solid ranks among the best companies in management and high-quality assets represent an the U.S. for customer service. attractive low-risk opportunity for those looking to Western Power Distribution invest in the utility sector. Western Power Distribution (WPD) is the Our vision is to empower economic vitality and quality LG&E and KU electricity distribution network operator in of life. We are a positive force in the communities the U.K. for the East and West Midlands, where we do business. We support human services, South West England and South Wales, serving education, arts and culture, and environmental 7.9 million end-use customers. Operating the stewardship. In addition, our companies work closely Louisville Gas and U.K.’s largest distribution network by with local and state officials to foster economic Electric Company and geographical area, WPD covers densely development that creates jobs throughout the Kentucky Utilities Company populated residential areas and widely territories we serve. dispersed rural communities. WPD has been Louisville Gas and Electric Company (LG&E) recognized consistently as the leading and Kentucky Utilities Company (KU) are PPL Corporation’s operating companies are located in electricity distribution network operator regulated utilities that are engaged three primary jurisdictions: Kentucky, Pennsylvania and group in the U.K. by the Office of Gas and in the generation, transmission, distribution the United Kingdom. Each of these jurisdictions has Electricity Markets (Ofgem). different laws, regulatory agencies and local governing and sale of electricity in Kentucky, Virginia bodies. Details are available in the company’s 2017 Form and Tennessee. They serve nearly 1.3 million 10-K Report, Part I, Business (filed with the Securities customers and have consistently ranked and Exchange Commission). among the best companies for customer service in the United States. In Virginia and OUR VALUES Tennessee, KU operates under the name Old Safety and Health Dominion Power Company (ODP). LG&E and Customer Focus KU operate about 8,000 megawatts of power Diversity and Engagement generation. In addition, LG&E is engaged in Performance Excellence the distribution and sale of natural gas. Integrity and Openness Corporate Citizenship

3 4 PPL 2017 SUSTAINABILITY REPORT At aglance MILES OFELECTRICLINES CUSTOMER SATISFACTION IN THE U.S. ANDTHE U.K. J.D. POWER AWARDS FOR 218,000 UTILITY CUSTOMERS 10M 45

REGULATED GENERATION ELECTRICITY DELIVERED CAPACITY INTHE U.S. IN ANNUAL REVENUE KILOWATT-HOURS OF 12,500 12,500 8,000 $7.5B MEGAWATTS OF 142B EMPLOYEES

*As ofDec. 31, 2017 DELIVERING TODAY FOR A BRIGHTER TOMORROW Performance data Key metrics on our sustainability performance from 2016-2017

ENERGY PORTFOLIO 2016 2017 Page # ENERGY PORTFOLIO GENERATION Owned Nameplate Generation Capacity at end of year (MW) 8,011 8,017 75 Net Generation for the data year (MWh) 33,968,857 32,704,879 75 Generation Efficiency (BTU/Net Generation) 10.6 10.1 75 EMISSIONS

Carbon dioxide (CO2e) emissions (owned generation, purchased power and other operations) (metric tonnes for data year) 29,515,412 29,083,085 76 Generation carbon emissions intensity (metric tonnes/net MWh) 0.85 0.87 76 Sulfur dioxide emissions intensity (metric tonnes/net MWh) 0.00048 0.00041 76 Nitrogen dioxide emissions intensity (metric tonnes/net MWh) 0.00054 0.00048 76 Total mercury emissions (Kg) 70 77 76 WATER Water withdrawal (megaliters/year) 534,674 494,946 77 Percent Impact (water withdrawn compared to waterbody size) 0.19% 0.17% 77 Percentage of total volume of water recycled and reused 89.7% 96.07% 77 WASTE Percent of coal combustion products beneficially used 34.2% 34.1% 77

INFRASTRUCTURE 2016 2017 Page # Miles of transmission lines 10,589 10,633 4 Miles of distribution lines 208,143 208,077 4

5 6 PPL 2017 SUSTAINABILITY REPORT Total in communitiesserved charitablegiving STRENGTHEN COMMUNITIES Number ofdiverse businesses Incremental annualelectricity savings from energy efficiency measures (MWh) ENERGY EFFICIENCY Total spentondiverse businesses SUPPLY CHAIN Total numberofminoritiesonboard ofdirectors Total numberofwomen onboard ofdirectors* Total numberonboard of directors* Average hoursoftraining peremployee PPL elected Phoebe A.Wood totheBoard onJan. 18,2018. * Thetotalnumber onboard ofdirectors andthetotalnumber ofwomen onboard of directors is asofDec. 31, 2017. Performance data Total volunteer hours Average outageduration (inminutes)(SAIDI) Average numberofinterruptionspercustomer(SAIFI) RELIABILTY Work related fatalities Recordable incidentrate Lost timeincidentrate Number oflostday cases Total hoursoftraining Percentage ofminorityemployees Percentage ofwomen employees Total numberofemployees EMPLOYEE ANDBOARD DATA Total rebates (inmillions) Customer count(atendofyear) Total hoursworked SAFETY RESOURCES AND COMMUNITY OPERATIONAL PERFORMANCE - WPD - PPLElectric - LG&E andKU - WPD - PPLElectric - LG&E andKU 10,485,850 24,700,051 433,000 $34.5M 610,180 50,000 12,689 2016 2016 100.47 28.86 $151M 71.23 $11M 0.52 0.70 1.30 0.19 1.04 21.1 310 6.2 48 24 0 9 4 1 24,157,564 10,597,979 570,488 671,055 $35.7M 69,000 2017 2017 $170M 12,512 69.68 29.29 $10M 75.41 0.60 0.50 0.84 0.15 1.08 21.4 277 6.4 46 18 9 4 1 1 Page # Page # 53 53 53 60 60 46 46 78 78 78 78 78 78 78 44 57 57 15 15 15 14 14 DELIVERING TODAY FOR A BRIGHTER TOMORROW

Awards and honors In 2017, PPL Corporation and its regulated utilities were recognized for outstanding performance in a number of areas. Some LG&E and KU’s electric vehicle charging station program was recognized by highlights include: EPRI with a Technology Transfer Award in 2017.

PPL Corporation PPL Electric LG&E and KU WPD • Received a perfect score of 100 percent on • Ranked highest by J.D. Power for residential • Ranked the highest two utilities by J.D. Power • Celebrated 25 years of outstanding customer the Human Rights Campaign Foundation’s customer satisfaction among large utilities in for residential customer satisfaction among service, having held the Government’s Charter Corporate Equality Index, a national the East region for the sixth consecutive year. midsize electric utilities in the Midwest region. Mark, now known as the Customer Service benchmarking survey and report on corporate Excellence Award, continuously since 1992. policies and practices relating to lesbian, gay, • Received two Industry Excellence Awards • Recognized by the Electric Power Research bisexual and transgender workplace equality. from the Southeastern Electric Exchange Institute (EPRI) with Technology Transfer • Received the Louder than Words Charter Mark for its automated power restoration Awards for the company’s electric vehicle from Action on Hearing Loss, the nationally • Recognized by Forbes magazine as one improvements and its use of data to charging station program and 10-megawatt recognized accreditation, which recognizes of America’s Best Employers for the second enhance operations. universal solar facility at E.W. Brown organizations that provide excellent levels of year in a row. Generating Station. service and accessibility for customers and • Received the 2017 Training Top 125 Award employees who are deaf or hard of hearing. from Training Magazine for the third year • Named among the “Top 10 Utilities” in a row. in the U.S. for economic development by Site Selection, the international economic development magazine. Since 2010, Site Selection has recognized the company’s economic development efforts five times.

7 8 PPL 2017 SUSTAINABILITY REPORT Strengthen communities exceptional workplace Foster an expectations Exceed customer energy infrastructure Build tomorrow’s energy future Advance acleaner operational performance Drive best-in-sector shareowner value Create extraordinary COMMITMENTS Interest Group ofEPRI,reviewed theUnitedNationsSustainableDevelopment Goals andreviewed company documents,suchasrisk-management reports, business plansandcustomer-satisfaction surveys. To identifysustainabilitypriorities,across-functional corporate sustainabilityteamconducted benchmarkingofPPL’s peercompanies,analyzedthematerialitystudyconducted by theSustainability Sustainability commitmentsandpriorities Emergency preparedness –Maintainbusiness continuityandprepare forevents customers thataffect ourabilitytoserve philanthropy andvolunteerism Community investments –Make positive contributionstothecommunities we through procurement serve practices, Safety andhealth–Encourage employee wellness andpublicsafety Employee engagement–Create aworkplace thatfostersanengaged,high-qualityworkforce Diversity andinclusion–Foster aninclusive, respectful anddiverse workplace Energy efficiency –Implementtoolsandresources toreduce energy consumption Customer satisfaction –Deliver excellent customerservice Affordability –Strive todeliver forourcustomers affordable electric andnatural gasservice Innovation andtechnology –Beanintegral partofthedevelopment offuture energy services Infrastructure investments –Enhancereliability andresiliency through continuedinvestments ofservice Grid security–Protect thephysical securityofthegrid Distributed energy resources –Encourage andsupportdevelopment ofdistributedenergy resources andrenewables reduction ofGHGemissions Greenhouse gas(GHG)–Take frameworks reasonable measures, withintheregulatory inwhichwe operate, tosupport Environmental management–Exercise responsible environmental stewardship Reliability –Excel inreliability Operational efficiency –Strive forbest-in-sector performance Governance andethics –Maintainstrong corporate governance, complianceandethical business practices Economic viability–Promote long-termfinancialviabilityofthecompany Cybersecurity andinformationprotection –Protect thegrid,customerandemployee data, andthecompany’s assets PRIORITIES PAGE 43 PAGE 40 PAGE 59 PAGE 52 PAGE 27 PAGE 21 PAGE 11 PAGE DELIVERING TODAY FOR A BRIGHTER TOMORROW

About this report Our current sustainability programs, performance metrics and initiatives are presented throughout this report and are referenced in the Global Reporting Initiative (GRI) Index on page 63. This report presents our sustainability performance following the GRI Framework in accordance with GRI-G4 guidelines at the core level. PPL intends to transition to GRI’s updated standards with the next report.

Our views about the company’s direct and indirect impacts, risks, challenges and opportunities are presented throughout this report and in other publicly available documents such as the 2017 Form 10-K, Form 10-Qs, 2018 Proxy Statement and 2017 Annual Report posted on the company’s website.

Report profile This report covers activities that occurred in calendar year 2017. The report was published in 2018.

Throughout the report, we reference GRI-G4 guidelines and have included a GRI Index for ease of review on page 63.

PPL Corporation intends to report on its sustainability activities annually. The report is reviewed by the company’s leadership team, including the chief executive officer. External audits for this report have not been conducted, but an internal review was completed by the Corporate Audit Department.

Throughout this report, when we refer to PPL, we are discussing all of PPL Corporation and its subsidiaries, including PPL Electric, LG&E and KU, and WPD. For specific issues, information and discussion about each entity may be presented.

Statements contained in this report concerning future events are forward-looking statements as defined by federal securities laws. Although PPL Corporation believes that the expectations and assumptions reflected in these forward-looking statements are reasonable, these statements involve a number of risks and uncertainties, and actual results may differ materially from the results discussed in the statements. Any such forward-looking statements should be considered in light of such uncertainties and assumptions and in conjunction with PPL Corporation’s 2017 Form 10-K and other reports on file with the Securities and Exchange Commission.

Conversions of British pounds sterling to U.S. dollars marked throughout this report were based on the foreign exchange rate on Dec. 31, 2017.

Questions and comments about this report can be directed to [email protected].

A PPL Electric lineworker gets a thumbs up from a resident of Puerto Rico after his neighborhood’s power was restored. Crews from PPL Electric, LG&E and KU were among the many utilities assisting in restoration efforts after Hurricane Maria ravaged the island’s power network.

9 10 PPL 2017 SUSTAINABILITY REPORT As we prepared ourdocument,we have considered GRI’s principlesfordefining report contentandquality. andcommunitypartnerstomanagesome material issues,legislative asdiscussed inthereport. Regarding boundaries,mostofthereport contentisfocusedoninternalboundaries.Thecompany alsoisreliant oncertainregulatory, subsidiary’s level ofinvolvement withenergy production Theseare noted throughout anddelivery. thereport. frameworks inpartbecauseofdifferent regulatory andeach tosubsidiary, slightlyfrom subsidiary Material aspects andboundariesvary All materialaspects chosenforinclusioninthisreport are reflected onourGRIIndexpage63. on thefollowing: PPL haschosencontentthatourexecutives andreport teamshave deemedmaterialforthepurposesofsustainabilityreporting, based Identified material aspectsandboundaries directors. The sustainabilitystrategy, commitmentsandprioritiesare reviewed by thecorporate leadershipcouncilandpresented totheboard of for developing sustainabilitystrategy, providing oversight andestablishingtheprioritiesperformancemetrics. The corporate sustainabilitycommittee, whichincludesseniorleaders throughout thecorporation anditsbusiness units,isresponsible assessment report; andestablishedacarbonreduction goal. (EEI) environmental, social,governance andsustainability-related reporting templateforinvestor-owned utilities;issued aclimate ments withtheU.N. SustainableDevelopment Goals fortheutilitysector; participatedinthedevelopment ofEdisonElectric Institute’s PPL hassincebecomeamemberofEPRI’s SustainabilityInterest Group; assessed alignmentofits sustainability strategy andcommit- commitment tosustainability. may behelpfultostakeholders inevaluating thecompany’s social,governance, economicandenvironmental performanceandoverall A cross-functional corporate sustainabilityteamconducted aninitialmaterialityassessment in2016todetermine thekey prioritiesthat Key sustainability issues • • • • • • • Reviews withemployees whointeract with thecommunityandpublicofficials Reviews withourseniorexecutives Stakeholder feedbackover thelastyear A review ofpeerswhoare reporting onsustainabilityissues EPRI’s Metrics toBenchmarkSustainability requirements fordisclosure andcompliance Regulatory GRI Electric UtilitiesSector Supplement Brown Generating Station. Operator KatieSmithondutyatKU’sAuxiliary E.W. DELIVERING TODAY FOR A BRIGHTER TOMORROW Create extraordinary shareowner value Create long-term value for shareowners through fiscal discipline, continuous improvement, environmental stewardship and enduring strategic investments

We will continue to explore A strategy for growth PPL’s portfolio offers investors a unique and compelling invest- opportunities to grow ment option in the utility industry. Our business provides scale and PPL in a sustainable way. diversity with seven high-performing, award-winning utilities serv- ing more than 10 million customers in both the U.S. and the U.K. In 2017, we demonstrated strong execution across our U.S. and U.K. Across these businesses, we are guided by a common purpose: to businesses. We delivered at the high end of our earnings guidance; deliver for our shareowners and customers, to secure a brighter executed on our capital plan; provided award-winning customer energy future for generations to come and to make a positive service; strengthened reliability; and increased our dividend to impact in our communities. shareowners for the 15th time in 16 years.

Our strategy for growth is clear. We will: Looking ahead, we are well positioned to deliver competitive • Deliver best-in-sector operational performance earnings growth and dividends as we invest in the future. Disciplined infrastructure investment and timely rate recovery • Invest responsibly in a sustainable energy future will continue to drive growth for our shareowners and deliver benefits for our customers. We invested about $3.5 billion in • Maintain a strong financial foundation infrastructure improvements in 2017. We expect to invest an • Engage and develop our people. additional $15 billion from 2018 through 2022.

As we pursue this strategy, we recognize the importance of strong As we move forward, we will remain focused on continuous environmental, social and governance performance, and we improvement. We will continue to incorporate new technology in regularly review and analyze risks and opportunities as part of our ways that improve efficiency and strengthen service to customers, business planning activities. and we will continue to explore opportunities to grow PPL in a sustainable way.

11 12 PPL 2017 SUSTAINABILITY REPORT CREATE EXTRAORDINARY SHAREOWNER VALUE OPERATING -DOMESTIC ELECTRICITYSALES(GWh) FINANCIAL For theyears endedDecember31 Financial highlights (e) (d) (c) (b) (a) United Kingdom OPERATING -INTERNATIONAL ELECTRICITYSALES(GWh) Wholesale supplied Retail delivered Return oncommonequity-earningsfrom ongoingoperations (e) Return oncommonequity Price/earnings ratio -earningsfrom ongoingoperations (d,e) Price/earnings ratio (d) Dividend payout ratio -earningsfrom ongoingoperations (d,e) Dividend payout ratio (d) Dividend yield Market price/bookvalue ratio (b) Dividends declared pershare Earnings from ongoingoperations pershare –diluted(a) Net income(millions) Operating revenues (millions) Market pricepershare (b) Book value pershare (b,c) Earnings pershare -diluted Total assets (millions)(b) Earnings from ongoingoperations (millions)(a) Calculated using earnings from ongoing operations, which is a non-GAAP financialmeasure thatincludesadjustmentsdescribedabove infootnote(a). Calculated usingearnings from ongoingoperations, whichisanon-GAAP Based ondilutedearnings pershare. Based on693,398and679,731 shares ofcommonstockoutstanding (inthousands)atDecember31, 2017andDecember 31, 2016. End ofperiod. page V(pershare) of thisreport. “Reconciliation ofNet IncometoEarningsfrom OngoingOperations” onpage36(millionsofdollars) and on specialitemsseparately disclosed.Incometaxes onspecialitems,whenapplicable, are calculatedbased ontheeffective taxrate oftheentitywhere theactivity isrecorded. See Earnings from OngoingOperations isadjustedfortheimpact ofspecialitems.Specialitemsare presented inthefinancialtablesonanafter-tax basiswiththe related incometaxes financial performance. measuring achievement ofcertaincorporate performancegoals,includingtargets forcertainexecutive incentive compensation. Othercompaniesmay usedifferent measures topresent management’s view ofPPL’s earningsperformanceasanothercriterioninmakinginvestment decisions.Inaddition, PPL’s managementusesEarningsfrom OngoingOperations in indicator ofoperating performancedetermined inaccordance withGAAP. PPLbelieves thatEarningsfrom OngoingOperations isuseful andmeaningful toinvestors becauseitprovides financialmeasure thatshouldnotbeconsidered asanalternative to reported earnings,ornet income, an Management utilizes“Earningsfrom OngoingOperations” asanon-GAAP $41,479 $30.95 $7,447 $15.52 $1,553 74,317 10.9% 65,751 15.0% $1,128 $2.25 2,084 199% $1.64 $1.58 5.1% 96% 70% 2017 13.8 18.9 $38,315 $34.05 74,728 $14.56 $1,902 16.9% 19.2% 67,474 234% $1,674 $7,517 $2.45 4.5% $2.79 $1.52 2016 55% 62% 2,177 13.9 12.2 DELIVERING TODAY FOR A BRIGHTER TOMORROW

Significant operational and regulatory highlights during the reporting period

July WPD released its strategy to transition from a Distribution Network Operator to a Distribution System Operator, a move that is essential to driving future network performance and March efficiency. The transition will support increased customer adoption of low-carbon technologies. WPD requested Members of the International stakeholder input on the strategy. Read more on page 20. Brotherhood of Electric December Workers Local 1600 ratified a U.K. utility regulator Ofgem published an open letter new five-year labor agreement beginning the framework review for the RIIO-2 price control WPD updated its Distribution with PPL that extends through period, which will begin for U.K. distribution network System Operator strategy (see May 15, 2022, and covers about operators on April 1, 2023. WPD and others stakeholders earlier entry on timeline) to 1,400 Pennsylvania employees. provided responses that were published in September. reflect feedback from a wide range of stakeholders.

June August November The Kentucky Public Service Commission KU and the United • PPL released its scenario-based Climate Assessment authorized a combined $116 million Steelworkers of America Report (see page 36). increase in annual base electricity and ratified a three-year labor gas rates for LG&E and KU to support agreement that extends • KU announced plans to retire two coal-fired units at the continued infrastructure investment. through August 2020 and E.W. Brown Generating Station in February 2019. The two units The action followed LG&E’s and KU’s covers 53 employees. total 272 megawatts. In making its decisions, KU analyzed a unanimous settlement with parties to number of alternatives for meeting anticipated stricter the rate review. Environmental Protection Agency regulations, including the Coal Combustion Residuals rule, and the increased use of LED LG&E completed a long-term gas main lighting and other energy efficiency measures. replacement project that involved the replacement of 540 miles of cast iron, • Greg Dudkin, president of PPL Electric, testified before the wrought iron and bare steel natural gas Pennsylvania House Consumer Affairs Committee in support pipelines, which are more vulnerable to of House Bill 1782, Alternative Rate Mechanisms. The bill degradation over time, with more durable would enable alternative ratemaking approaches such as plastic natural gas pipelines. Read more decoupling, which will allow utilities greater flexibility to on page 40. continue to invest in making the grid stronger, keeping it reliable for customers, and helping protect the grid from cyber or physical attacks. Customers will still have incentives to use less energy.

13 14 PPL 2017 SUSTAINABILITY REPORT CREATE EXTRAORDINARY SHAREOWNER VALUE Edwards. organizations. Italso helpsusmaintainourleadershipinsupplierdiversity,” said both forge new relationships withdiverse vendors andstrengthen ourtiestodiverse “We value ourcommitment totheLouisville community, andthisevent helpsus partners inthecommunity. provides LG&E andKUwithanoutstandingopportunityto reach outtopotentialbusiness Eboni Edwards, Supplier Diversity managerforLG&E andKU, said theannualreception infrastructure projects. attention tothecontributionutilitiesmake inspurringbusiness growth through their upgrades play in communityeconomicdevelopment. Anumberofspeakers called One ofthemajorthemeswas therole thatutilityinfrastructure construction and discuss ways theirbusinesses mightmeet theneedsofutilitiesinLouisville area. Water Company andMetropolitan Sewer District, andLouisville Metro Government to In 2017, more than 300attendeesmet withrepresentatives from LG&E andKU, Louisville diverse businesses cannetwork withutilitiesintheLouisville area. Known asthe“Window ofOpportunity,”​ to hostanannualreception andshowcase fordiverse suppliers. and veteran-owned businesses, LG&E andKUpartnerswithotherLouisville area utilities To create broader suppliernetworking opportunitiesforminority-owned, women-owned for diverse businesses Building opportunities attendees attheannualdiverse business reception inLouisville, Ky. Eboni Edwards, SupplierDiversity managerforLG&E andKU, mingleswith thereception showcased themany ways that Supply chain Supplier Diversity and veterans. In2017, thecompany spent$170millionwithnearly300diverse businesses. PPL anditsbusiness unitsactively reach outtofinddiverse businesses –those owned by minorities, women business, professional andpersonalethics whenbiddingorproviding toPPL. materialsorservices Inaddition,goods andservices. we ourstandards require of oursuppliersandcontractors toobserve employees, communitiesandcustomerscarriesover tothepeoplefrom whomthecompany purchases rates compliancerequirements inpurchase orders andcontracts. Thevalue PPLplacesondiversity inits Accordingly, PPLreviews thesafety andenvironmental performance ofitsbusiness partners andincorpo- environment, diversity andstandards ofconduct. PPL expects eachsupplierandcontractor tocomplywiththecompany’s commitmenttosafety, the including previous business dealings,competitive prices,qualityofmaterialsandservices. lists ofqualifiedsuppliersand award business toapproved suppliersbasedonanumberoffactors, All purchase orders andcontracts issued by PPLuseaqualifiedsupplier.PPL’s SupplyChainteamsmaintain including capitalprojects. contracts toexecute toprocure numerous avariety business ofmaterials,laborandservices activities, developed andmaintainedthrough thecompany’s SupplyChainorganizations, whichnegotiateandsecure Relationships withcontractors andsuppliersare vitaltoPPL’s successful operations. Contracts are Total corporate spendongoods $3 billion locally basedsuppliers Of corporate spendon and services in2017 and services 55% $170 million $1.7 billion on locallybasedsuppliers Total corporate spendon Total corporate spend diverse suppliers DELIVERING TODAY FOR A BRIGHTER TOMORROW

From left to right: Raja Rajamannar, Steven G. Elliott, Craig A. Rogerson, William H. Spence, Natica von Althann, Rodney C. Adkins, Keith H. Williamson, John W. Conway, Armando Zagalo de Lima. Phoebe A. Wood who joined the Board on Jan. 18, 2018 is not pictured. Governance Enterprise Incentives and Strong leadership and well-managed operations are the risk management remuneration cornerstones of a successful business. PPL’s corporate governance practices are designed to provide long-term value PPL maintains a robust enterprise risk management (ERM) process Director Compensation for our shareowners, customers and the communities in which that provides a business portfolio view of material risks that may impact achievement of PPL’s business strategy. The Board believes that to continue to attract talent to the Board we operate. The Board of Directors’ responsibilities include over time, outside directors should be remunerated for their overseeing the management of PPL, selecting the company’s As part of the ERM process, representatives from PPL’s operating services at a level competitive with that provided by other leaders, approving long-range strategic plans and advising companies and service groups identify, assess, monitor and report comparable publicly traded corporations. Directors who are senior management. on both ongoing and emerging risks. PPL’s Risk Management group company employees (currently only PPL’s chief executive officer) The Board has designated its Compensation, Governance and oversees this process and reports quarterly to the Audit Commit- do not receive any separate compensation for service on the Nominating Committee as the body responsible for overseeing tee of PPL Corporation’s Board of Directors. Board of Directors or committees of the Board of Directors. PPL’s practices and positions to further its corporate citizenship, Information regarding compensation of PPL’s directors can be including sustainability, environmental and corporate social found in the 2018 Proxy Statement, beginning on page 18. responsibility initiatives. 2017 Executive Compensation Enterprise Risk Executive Leadership Audit Committee PPL Corporation’s Guidelines for Corporate Governance are posted Management Team Review Finance Committee Information regarding PPL’s executive compensation program, our on the corporate website at pplweb.com/governance. Board of Directors compensation philosophy and objectives as well as a discussion of how executive compensation decisions affecting our named Additional details about the role of the Board, independence of the Analysis of material Environmental, executive officers were made for 2017 is included in the 2018 directors, role of the independent directors, the presiding or “lead” risks & Social and director, and selection of directors can be found in the Guidelines opportunities Governance (ESG) Proxy Statement, beginning on page 24 in the “Compensation for Corporate Governance. Compensation, Governance Discussion and Analysis” section. Additional details about specific and Nominating Committee compensation of the named executive officers are included in the 2018 Proxy Statement, beginning on page 47. 15 16 PPL 2017 SUSTAINABILITY REPORT receives quarterlyreports from theheadofcorporate audit compliance andethics program. TheAudit Committee also Chief Compliance Officer,whohas overall responsibilityforPPL’s Committee membersreceive quarterlyreports from PPL’s Global Committee ofthePPLCorporation Board ofDirectors. Audit PPL’s complianceandethics program isoverseen by theAudit Compliance andEthicsGovernance are postedonourwebsite. PPL’s VisionandValues, alongwithPPL’s Standards ofIntegrity, guiding thedecisionswe make andtheactions we take. conduct ourbusiness. They applyinallsituations,attimes, Integrity, alongwithourvisionandvalues, definethe way that we founded uponPPL’s Standards ofIntegrity.TheStandards of PPL hasestablishedacomplianceandethics program thatis the strong reputation builtby generations ofPPLemployees. costly toourcompany –notjustfinancially, butalsointermsof govern ourbusiness. We would be recognize thattodootherwise both thespiritandletter ofalllaws, regulations andrulesthat ethical standards, work safelyandresponsibly, andcomplywith that we (aswell asourcontractors) mustadhere tothehighest stake inPPL’s business andthecommunitieswe we serve, believe To fulfillourobligationtoshareowners andallotherswhohave a Ethics andintegrity CREATE EXTRAORDINARY SHAREOWNER VALUE necessary. TheCCCmeets quarterly. program andtodrive enhancementstotheprogram as effectiveness ofthecompany’s compliance andethics with theauthorityandresponsibility toassess theoverall corporate andoperating company executive leadership Chief Compliance Officeranditsmembershipconsistsof policies andrequirements. TheCCCischaired by theGlobal conduct andacommitmenttocompliancewithlaw andcompany is topromote anorganizational culture thatencourages ethical and Investigations Working Group. Thefunction oftheCCC (CCC), whichissupportedby theCompliance Working Group (CWG) and ethics program istheCorporate Compliance Committee Another integral partofPPL’s governance ofitscompliance the company. entities thatmay create apotentialconflict ofinterest to or privately heldenterprises,includingfor-profit andnonprofit or potentialconflict ofinterest andany affiliationwithpublic ofanyof eachdirector actual toadvisethecorporate secretary copy ofthePPLStandards. Itistheresponsibility ofIntegrity company, memberoftheBoard ofDirectors every receives a employeeStandards ofIntegrity.Inadditiontoevery ofthe at alltimesandadhere tothepoliciesset forthinthecompany’s The Board expects itsdirectors andofficersto act ethically Audit Committee. head ofthecorporate auditfunction meet regularly withthe function. BoththeGlobalChief Compliance Officerandthe relationship totheGlobalChief Compliance Officer. these functions andhasadirect ordottedlinereporting maintains appropriate certificationsorqualificationstoperform program. Eachcomplianceand ethics program leadobtainsand communications withrespect tothecomplianceandethics the identifiedrisks, andprovide appropriate training and compliance risks, tailorthecomplianceandethics program to leads play akey role inhelpingtoidentifyandprioritize riskassessments.strategic Thecomplianceandethics program ensure thatcomplianceandethics risks are includedinoverall program, andprovide inputtoEnterprise RiskManagementto ensuring thatPPLhasaneffective complianceandethics the GlobalChief Compliance Officer,the CWG andthe CCCin appointed by anoperating company orheadquarters.They assist The complianceandethics program leadsare individuals Chief Compliance Officerandmeets onceamonth. compliance andethics program. TheCWG ischaired by theGlobal responsibility forsupportingtheCCCinitsoversight ofthe ethics program leadsand(2)second-tierleadershipwith to theCCC. TheCWG membershipconsistsof(1)compliance and responsible forpresenting itsfindings andproposed action plans and potentialissues withexistingprograms. Inaddition, itis identifying, evaluating, andassessing risks existingandemerging ments totheprogram asnecessary. TheCWG isresponsible for corporate complianceandethics program anddrivingenhance- The CWG supportstheCCCinassessing theeffectiveness ofthe DELIVERING TODAY FOR A BRIGHTER TOMORROW

Employees

Every employee and director is expected to read, understand and comply with PPL’s Standards of Integrity. In addition, employees are expected to report any compliance or ethics concerns to their immediate supervisor or via another appropriate reporting mechanism, including anonymous reporting mechanisms provided by PPL and its operating subsidiaries. PPL takes any instance of noncompliance seriously. Failure to obey laws and regulations or violations of company policies may result in employee discipline to the extent permissible under applicable law, up to and including termination.

Every employee receives annual training on the Standards of Integrity. As part of the training, every employee is required to certify that he or she understands the expectation to report misconduct and understands that PPL will not tolerate any form of retaliation for any report made in good faith. All training is tracked and recorded and reported to executive leadership and the Audit Committee. Targeted communications on certain topics are also issued as needed.

Reporting and Handling of Violations

PPL expects employees to ask questions or raise concerns about the application or interpretation of the Standards of Integrity. The company does not discriminate against or tolerate any form of retaliation toward employees who ask questions or raise concerns in good faith.

PPL provides a mechanism for confidential and, if desired, anonymous reports of employee concerns, including accounting issues. PPL’ s EthicsHelpline toll-free phone number and internet site are available 24 hours a day, seven days a week. PPL’s EthicsHelpline is also accessible on the internet. Anonymous contacts also can be made in writing to PPL’s Corporate Audit department.

Corporate guidelines are in place for promptly responding to allegations of misconduct and include notifying the Global Chief Compliance Officer of the allegations. The Global Chief Compliance Officer reviews data for issues and trends. The data and trends are reported to the Audit Committee on a quarterly basis. Critical concerns of a more immediate nature can be raised to the Audit Committee or the full Board of Directors at any time.

17 18 PPL 2017 SUSTAINABILITY REPORT lobbying. of duesidentified by each trade association asattributableto annual duesfrom PPLinexcess of$50,000, including thatportion Listed atrightare thetrade associations thatreceived 2017 reported totaled$215,159. filings, as required by stateandfederal laws. In2017, theamounts Section 162(e)(1)oftheInternalRevenue Code initslobbying payments totrade associations notdeductible under andbusiness-relatedindustry issues. PPLreports duesor engage generally ineducationandadvocacy onanumberof PPL belongstovarious business andtrade associations that Trade Associations Board onkey issues andadvocacy positions. executive leadershipandprovides semi-annualreports tothe PPL’s PublicAffairs Departmentisinregular communicationwith State andwillalsobemadeavailable uponrequest. EthicsCommissionLegislative andPennsylvania Departmentof lobbying reports filedwiththe U.S. House, U.S. Senate, Kentucky Information onPPL’s current lobbying activities canbefoundin expenditures toappropriate stateand federal agencies. PPL reports allcorporate lobbying-related activities and and consistentwiththecompany’s values. business incompliancewithallapplicablelaws andregulations seriouslytheneedtoconduct allaspectsPPL takes ofour very Lobbying Compliance shareowners andthecommunitieswe serve. issues thataffect theinterests ofourcustomers,employees, appropriate toensure thatpublicofficials are informedabout key economically. Ouractive participationinthepublic policy arena is to ourcustomersandfunction efficiently, safelyand furthers ourabilitytoprovide reliable andaffordable electricity and shareowners. PPLactively encourages publicpolicy that have asignificantimpact onPPLandourcustomers,employees Laws andpoliciesenacted atthenationalandlocallevels can Public policy engagement CREATE EXTRAORDINARY SHAREOWNER VALUE organizations are notcovered underthispolicy. Thecompany tax-exempt organizations. Charitabledonationsto501(c)(3) expenditures. PPLCorporation makes donationstovarious ballot measures, anditisourcurrent policy not tomake such expenditures inconnection withcampaignsortoinfluence PPL Corporation doesnotmake independentpolitical Independent Expenditures andTax-Exempt Organizations will alsobemadeavailable uponrequest. ofElection Finance and and Kentucky Registry Legislation Pennsylvania Bureau ofCommissions, Elections and finance reports filedwiththe Federal Election Commission, PGG andPACE report allPAC contributionsincampaign preference ofany executive orindividualemployee. PAC contributionsare madewithoutregard totheprivate political up ofemployees from across thecompany. Decisionsregarding guided by steeringcommitteesandallocationsmade separately from PPLCorporation, asrequired by law. They are These nonpartisan, PACs voluntary are organized andoperate in thepoliticalprocess by employees, retirees andshareowners. (PACE) are PACs thatencourage active interest andparticipation LG&E-KU Political Awareness andCivilEducationCommittee political process. PeopleforGood Government (PGG)andthe state PACs through whichemployees may participateinthe significant utilityoperations. PPLhasestablishedfederal and Pennsylvania andKentucky, thestatesinwhichPPLcurrently has in-kind contributions,underfederal law andunderthelaws of contributions tocandidatesandpoliticalparties,including PPL Corporation anditsaffiliates are prohibited from making Political Action Committees (PACs) Energy Association ofPennsylvania American GasAssociation Greater Louisville, Inc. Kentucky Chamber ofCommerce Edison Electric Institute Association Total Duesfor2017Membership $1,283,499 $204,426 $131,250 $164,167 $55,490 Corporate PoliticalDisclosure andAccountability. has ranked inthefirstquartileCPA-Zicklin Indexof PPL voluntarily disclosesthispolitical informationand,assuch, • • • corporate politicalcontributions,includingthefollowing: oversight committee, receives onanannualbasisareport of The PPLCorporation Board ofDirectors, oradulyauthorized Board Oversight and KUEnergy Corporation. LLC orPPLServices affairsinPPLElectric UtilitiesCorporation,or regulatory LG&E approved by themostseniorofficer responsiblefor government the purposeofinfluencingacampaign, theexpenditures must be future, ormake contributionstoatax-exempt organization for Should PPLdecidetomake independentexpenditures inthe ships andnotintendedtoinfluenceapoliticalcampaign. tions are generally related tomembershipsandevent sponsor tions, suchas501(c)(4)and527organizations, butsuchcontribu- occasionally makes contributionstoothertax-exempt organiza- National Conference ofStateSocieties under thispolicy, such as501(c)(4)and527organizations. Contributions totax-exempt organizations covered campaigns ortoinfluenceballotmeasures; and Independent expenditures inconnection with made totrade associations thatare inexcess of$50,000; The non-deductible portionofduesandotherpayments Non-Deductible PortionofDuesAllocatedtoLobbying 2017 Contributions toTax-Exempt Organizations $178,743 $13,083 $3,938 $9,850 $8,324 $10,000 - DELIVERING TODAY FOR A BRIGHTER TOMORROW

Key legislative and regulatory issues PPL engages with public officials on issues of importance to the company. In 2017, these were our top U.S. legislative and regulatory issues:

• Physical and cybersecurity – Policymakers continually are assessing and examining the reliability and security of the bulk power system from both a physical security and cybersecurity perspective. The electric sector is the only critical infrastructure sector with mandatory and enforceable federal cybersecurity and reliability standards through the North American Electric Reliability Corporation’s (NERC) standards setting process. Grid owners and operators are involved in developing these standards, which must be approved by NERC and then the Federal Energy Regulatory Commission.

• Permitting and regulatory reform - PPL supports federal legislation that creates a more efficient and predictable permitting process for large infrastructure projects and a more transparent and accountable regulatory system that promotes economic development while maintaining necessary safety, environmental and public health protections.

• Federal tax reform – PPL and our industry partners worked closely with policymakers during the development of tax reform legislation to help ensure that utilities can continue to make the significant capital investments necessary to provide reliable and safe energy at a reasonable cost to our customers while delivering strong returns to shareowners.

• Rate reform – Long-term rate reform is needed to better reflect the full costs and benefits of new energy technologies, as well as utility investments. The implementation of comprehensive long-term rate reform measures such as decoupling and performance-based rates would allow electricity distribution companies to continue to earn enough revenue to provide safe and reliable service despite load reductions due to distributed energy resources penetration and energy efficiency measures.

• Integration of distributed energy resources - The Department of Energy (DOE) awarded PPL Electric a $3.9 million grant in 2017 to establish the Keystone Solar Future Project (KSFP) to pilot the integration of high levels of solar penetration on our distribution grid (see page 27). PPL will continue to advocate for funding levels that allow federal agencies to fund additional research and development grants and effectively administer current projects like KSFP.

• Low-income home energy assistance program - PPL supports the Low-Income Home Energy Assistance Program and works with federal policymakers to secure adequate funding for this important program, which provides assistance for our most vulnerable customers.

• Pole attachments – In 2017, the Federal Communications Commission proposed a rule that would dramatically reduce rates and limit the ability of pole owners like PPL to evaluate attachments for safety and reliability. PPL is working through the regulatory and legislative process to seek modifications to the rule and respond to other proposals that have safety and reliability implications and shift the cost of telecommunication services to electricity customers.

• Unmanned aircraft systems - Since becoming one of the first utilities in the country to incorporate unmanned aircraft systems (UAS) into company operations in April 2015, PPL has closely monitored federal actions governing the use of this technology. As legislation to reauthorize the Federal Aviation Administration is considered in early 2018, PPL will pursue legislative and regulatory measures that allow for the expanded safe and responsible use of UAS.

• Net metering – PPL supports the development of private distributed energy resources with a compensation structure that is fair to all customers. 19 20 PPL 2017 SUSTAINABILITY REPORT CREATE EXTRAORDINARY SHAREOWNER VALUE customers, WPDrecognizes thatitistimetomake achange. But, inorder tomeet thefuture energy demandsofall capacity. implementing innovative solutionstounlock additionalnetwork Always ready toadapt,WPDhasrisenthesechallengesby electric vehicles ontherise. and cleanertransportation optionswithprivate solarand And customersare seekingmore renewable energy sources distributed. Networks are becomingsmarterandmore active. energy system. Generation isbecomingcleaner andmore duetoadvanceschanging intechnology affecting the entire The way we generate, distributeandconsumeelectricity is step toward new role WPD takes active responsible for managing interconnectionsresponsible for managing tothe power grid, generation onthe distributiongrid.Inaddition, they are users. TheDNOs alsosupporttimesofmaximumdemandand transmission grid toindustrial,commercial andresidential electricity, inonedirection, from thehighvoltage WPD isoneof14DNOs in theU.K. whosejobitisto move system atalocallevel.” management ofanefficientandcost-effective electricity role asaDNO, andwe are uniquelypositionedtoleadthe Director PhilSwift. “Thisisanatural extensionofourcurrent distributed generation investment,” saidWPDOperations customer adoptionofelectric cars,low carbonheating and “The company’s transition toaDSOmodelwillsupportthe performance andefficiency onthe power grid. million toimplementatransition strategy thatwilldrive (DSO). Through 2023,thecompany willinvest nearly$164 tion Network Operator (DNO) toaDistributionSystem Operator In July2017, WPDreleased itsplantotransition from aDistribu- Operator. and enhancecoordination withtheTransmission System non-network solutions,suchas energy storage and microgrids, and adoptways toincrease network capacitythrough accommodate distributedenergy resources. Itwillalsoidentify building asmarter,more secure gridthathastheflexibilityto During thesix-year transition, thecompany willfocuson actively reconfigures the system asneeded. across thesystem, forecasts future energy volumes andthen balance, theDSOstudiespastandcurrent flows ofenergy power across network. thelocalandregional To achieve and private generation, aDSObalancesthetwo-way flow of system. Inaworld withincreased distributedenergy resources actively managestheflow ofenergy across thedistribution While aDNO typicallyprovides passive network support,aDSO recent years. the network. Theserequests have grown exponentiallyin such asrequests toaddprivate solarandwindgeneration to primary systemdesignengineer,primary attheGarreg Lwyd windfarm. systemdesignengineer, Southall,primary Martin andMarc Rees, WPD’s MarkLewis,West MidlandsSouthproject engineer, DELIVERING TODAY FOR A BRIGHTER TOMORROW Drive best-in-sector operational performance Excel in safety, reliability, customer responsiveness and energy efficiency while maintaining a culture that cultivates innovation

We believe we can be the best large electric utility in the United States.

PPL ELECTRIC PRESIDENT GREG DUDKIN

Employees like Marilyn Nunez, customer service representative, helped PPL Electric achieve first quartile performance in customer satisfaction in 2017.

people deliver on their promises, and we’ll attract and retain talent A repeated J.D. Power award winner for residential customer Measuring progress: to enable continued long-term success.” satisfaction among large utilities in the eastern U.S., PPL Electric PPL Electric’s currently ranks at the top of the second quartile nationally. On Being a first-quartile utility is a mindset that lives at the heart safety, the utility was in the third quartile nationally in 2016 when first-quartile campaign of the workplace. From tailboards at job sites to engineering compared to its peers. However, a record safety year in 2017 solutions to creative ideas on operating more efficiently, it’s propelled the company into the second quartile. The company is in At PPL Electric, the premise is simple. a reflection of the culture of excellence and continuous the second quartile on costs per customer and is continuously improvement. First-quartile performance in safety, reliability, customer working to reduce operating costs. satisfaction and cost management is necessary for long-term PPL Electric communicates its drive for first-quartile performance The continued fostering of a constructive culture is at the center sustainable success. in several ways, including through a regularly updated set of of the advance toward first-quartile performance in all key areas. posters that show where the company stands compared to its “Achieving and maintaining first-quartile performance matters for peers on the key metrics. “We believe we can be the best large electric utility in the United a number of reasons,” said PPL Electric President Greg Dudkin. “We States,” said Dudkin. “By communicating expectations and will control our own destiny and become a safer, more efficient It is firmly in first quartile on reliability, measured as outages per engaging with employees, by never being satisfied with the status and more responsive organization that is focused on our customer, and is poised to enter the top 10 percent as continued quo, and by measuring ourselves against our peers, we position customers. Investors will view our company as a place where grid investments bring more benefits for customers. ourselves for success.”

21 22 PPL 2017 SUSTAINABILITY REPORT For complete details, seeAppendixpage78. DRIVE BEST-IN-SECTOR OPERATIONAL PERFORMANCE 24,157,564 WITH 18LOST DAY CASES TOTAL WORKED HOURS as possible. performance. Thecompany reviews incidentandtakes every thenecessary corrective measures toprevent asmany incidents eliminate workplace accidents.Even with extensive training, however, accidents canoccur.Thechartabove outlinesoursafety has created astrong accident-prevention culture through allourbusiness lines.Employees are always focusedonreducing risks to Safety isahighpriorityatPPL – something we consideranobligationtoouremployees, contractors andthe public. Thatattitude Injuries andAccidents learn andtoincorporate bestpractices thatcanenhance ourexistingprograms. accountable whilesharinggoodpractices. We strive andelsewhere for continuousimprovement, to withothersinourindustry engaging own theconceptofhealthandsafety atagrassroots level, andthatcommitmenttohealthsafety enablesemployees toholdeachother safety canbebypassed. Ourgoalissimple:zero accidentsorincidentsadversely affecting employees, contractors orthepublic. Employees communities where we work andlive. Nojobistooimportantorsourgent thatprecautions, laws orregulations concerning healthand One ofPPL’s goalsistomaintainawork environment thatpromotes thehealthandsafety primary ofouremployees andthe Safety WITH 1.08 RECORDABLE INCIDENT RATE

LOST TIME INCIDENT RATE 0.15% WORK RELATED FATALITY 1 DELIVERING TODAY FOR A BRIGHTER TOMORROW

As our drive toward improved safety continued in 2017, we In Kentucky, LG&E and KU: undertook some new initiatives and expanded upon other programs already in place. The result has been one of the safest • Achieved a 0.97 injury rate, the lowest recordable injury years ever at PPL. Among the work done during the year: rate in the companies' history. This figure was considerably lower than the 1.22 EEI top quartile level for the group of In the U.K., WPD: comparable utilities and closer to the top-performer rate of 0.91. • Hosted more than 400 contractors, staff, safety representatives and guests from the Energy Networks • Held their 16th Annual Safety Summit – Safety: Why I Care - Association for the 4th annual contractor-focused safety with nearly 1,200 employees and contractors in attendance. conference Working Well Together. Informative speakers and workshops encouraged attendees to consider the personal reasons that motivate them to • Provided electrical safety demonstrations on using work safely. equipment near power lines, pole rescue techniques and safe working techniques at the Arboricultural Association’s • Installed 88 Automated External Defibrillators (AED) at annual Arb Show, attended by more than 5,000 visitors. various company facilities to ensure employees have easy access to a potentially life-saving device. The company also • Launched a public safety campaign – Think Safe, Stay Safe trained at least 20 percent of its staff at each site on how – to educate landowners about the risks of working near to use the AEDs. electrical equipment. • Teamed with the American Red Cross in recent years to offer CPR/AED and first-aid classes. Since 2014, more than In Pennsylvania, PPL Electric: 100 employees have been trained through on-site classes • Introduced 1,100-plus field workers to a unique type of offered by the Health and Wellness Department. In addition, training featuring safety-related theatrical performances by hundreds more employees are trained in CPR and first aid a group of actors who acted out safety-related scenarios. through their regular jobs or involvement with Emergency Response Teams and Public Safety Response Teams. • Built upon our bargaining unit safety advocate program by sending two more groups of eight workers in the field to observe work done by their peers.

• Instituted an injury prevention campaign focused on our workers' most commonly injured body parts.

• Expanded opportunities for employee safety committees to share their experiences and best practices with each other.

• Delivered electrical safety messages to more than 15,000 school children with the in-school theatrical program and more than 10,000 people through the Live Line Electrical Safety Exhibit. WPD’s safety superhero Pylonman teaches young children about electrical safety at the Herefordshire Family Festival.

23 24 PPL 2017 SUSTAINABILITY REPORT number ofvehicle incidents necessary todrive safelyanddefensively inorder toreduce the Provide employees have theresources, skillsandknowledge Vehicle incident prevention requirements with local,stateandfederal regulatory Hold allbusiness areas andemployees responsible forcomplying Compliance start ofany work related tonatural gasorelectricity operations Require thatemployees participateinajobbriefingpriortothe Job briefings involved inloss-prevention efforts by actively creating andfacilitatingopportunitiestobecome Capitalize onthecompany’s mostvaluable resource, employees, Employee involvement incidents/events are completed forsignificantemployee andcontractor close callsare reported andinvestigated. Root causeanalysis A process isfollowed where allincidentsandnear-misses/ Incident investigation andreporting before they causeinjuries Aggressively identify, assess andmitigatehazards ofalltypes Hazard assessment andmitigation the endofeachday. Components ofourprogram include: at homeandonthejobreturn hometoourfamiliessafelyat Our ultimategoalistoensure thatwe allremain safeandhealthy DRIVE BEST-IN-SECTOR OPERATIONAL PERFORMANCE obligations. Stringent safety and healthrequirements are contractual Our commitmenttosafety alsoextendstoourcontractors. response, fire safety andoperational healthandsafety Discussions cover areas suchasaccidentprevention, emergency PPL engageswithoutsidegroups tolearnbestpractices. Sharing bestpractices and wellness asacomponentofsafety Actively pursueopportunitiestomeaningfully incorporate health Health andwellness promote safety asthemostimportantthingwe do actions, protect thesafety andwell-being ofco-workers and Demonstrate thecourage andknowledge tocorrect unsafe Leadership habits andahazard-free environment Foster reciprocal communicationthatwillsupportsafework Communication controlling andcorrecting unsafework without repercussions Seize thefreedom, responsibility and accountabilityfor Empowerment can beaddressed toprevent similarincidentsinthefuture Report allincidentsthatcouldhave sohazards resulted ininjury, Near-miss/close-call reporting company’s safety culture between employees andbusiness partnerstostrengthen the Foster better communicationandcloserworking relationships Business partnerrelationships Hare wait forapieceofequipmenttobelowered forasubstationupgrade project. Safety istopofmindforevery project. Here, WPDtechnicians AndyEllis(left) andKevin DELIVERING TODAY FOR A BRIGHTER TOMORROW

Reliability

One of the most critical factors for customer satisfaction is 2017 Average Number of Interruptions (per customer) 2017 Average Outage Duration (in minutes) reliability. This includes not only ongoing reliability but also how WPD 0.50 WPD 29 quickly the utility can respond to unforeseen interruptions. Reliability encompasses a number of operational aspects, PPL Electric 0.60 PPL Electric 70 including ongoing maintenance and oversight for our system’s LG&E and KU 0.84 LG&E and KU 75 equipment and power lines that can be affected by everything from weather to wildlife. System Average Interruption Frequency Index (SAIFI) is the System Average Interruption Duration Index (SAIDI) is the average number of interruptions per customer, excluding major events, average outage duration (in minutes), excluding major events, per Institute of Electrical and Electronics Engineers definition 1366. per Institute of Electrical and Electronics Engineers definition 1366. Today, PPL’s utilities are using technology and data like never For complete details, see Appendix page 78. before to deliver a more reliable system for customers. Some of these efforts include: LG&E and KU had their best reliability performance in more than a enhance reliability and promote economic growth in the region. decade. In an industry reliability benchmarking survey, the utilities PPL Electric’s power grid had its most reliable year ever in 2017 For WPD, investments in high voltage automation has significantly with customers continuing to experience fewer outages. Compared performed in the top quartile for Distribution System Average Interruption Duration Index, or SAIDI and for Transmission and reduced the number of customers affected by unplanned outages. to 2007, PPL customers experienced a total of 550,000 fewer The investment includes installation of additional remotely interruptions in 2017. Distribution combined Customer Average Interruption Duration Index, or CAIDI. Since 2010, LG&E and KU have reduced the number controlled switches and protection equipment and the application Since 2010, smart grid devices have been installed at more than of outages and their duration by 35 percent and 34 percent, of computerized switching algorithms. 4,600 locations throughout PPL’s service territory. The utility has respectively. Planned system improvements and technology Nearly nine out of 10 WPD customers who experience high voltage also invested in lightning protection, leading to a 76 percent advancements over the next five years are projected to reduce the faults have their power supply restored in under an hour. reduction in lightning-related outages on transmission lines from frequency of outages by 26 percent and duration of outages by 17 2012 to 2017. percent, compared to historical system performance over the last WPD has a clear focus on restoring power quickly. The utility’s seven years. Target 60 initiative sets a goal to restore power within 60 minutes PPL Electric's future grid investments include: of an outage occurring. The average number of customers LG&E and KU are planning a number of improvements throughout • More automation on the local distribution grid to reroute interrupted by unplanned incidents has dropped across its entire the electric and natural gas systems that will help improve safety, service area. power around trouble spots and turn the lights on faster for reliability and service. The utilities received approval from the many customers. Kentucky Public Service Commission to invest in intelligent control equipment that will enhance reliability. Likewise, a five-year • More automation on the higher-voltage transmission grid to transmission upgrade program that includes replacing aging further improve reliability for customers. equipment such as wooden poles, cross arms, insulators, lines and • Improvements at substations and in underground networks substations is underway. that serve cities. From a natural gas standpoint, LG&E plans to expand its replace- • Continued proactive replacement of aging equipment. ment of aging natural gas steel service lines from the street to customers’ homes with new plastic pipe. The project is similar to • Replacement of 15,000 wooden distribution poles and 160 the utility’s recently completed 20-year investment in downtown circuit breakers over the next five years. Louisville in which the natural gas distribution lines were upgraded from aging wrought iron and steel to plastic. LG&E also intends to • Rebuilding over 1,400 miles of older transmission lines over replace its aging natural gas transmission lines, add capacity to the next five years.

25 26 PPL 2017 SUSTAINABILITY REPORT DRIVE BEST-IN-SECTOR OPERATIONAL PERFORMANCE customer service. Excellence driveService WPDtocontinuously improve its external customersatisfaction standards suchasCustomer Nicki Johnson, stakeholder engagementofficer, says years. ItbecametheCSE standard in2011. public sector organizations hadtocompete forevery three The CSE in1992astheCharterMark,which standard originated continuously improve ourcustomerservice.” achieved. This allows ustodrive ourstandards even higherand will stillrecommend areas where furtherimprovement couldbe “Even whenyou achieve acomplianceplusrating, theassessor said NickiJohnson, WPD’s stakeholder engagementofficer. andprocessesstrategies toobtaincriticalexternalevaluation,” “We particularlylike theCSE standard becauseitallows our ratings. continues tohave zero non-compliance orpartialcompliance 237 organizations certified by M-Assessment WPD Services. among theU.K.’s topfive performersandnumberoneoutofthe designations outofapossible 57. Theresult placedthecompany plus outcomes,takingitstotalto38compliance In the2017assessment, WPDgainedanextra two compliance to complianceplus–indicatingbestpractice across sectors. There are fourpossible from outcomes,ranging non-compliance and Contact Centre teamstoassess thequalityofWPD’s delivery. reports. withsenior managers Thisiscoupledwithinterviews policies,training plansandstakeholderstrategies, engagement performance reports, socialmediaandwebsite content, Over 100separate piecesofevidence are reviewed, including annual audits. five dozenelements. Assessments are conducted through The standard measures five criteriaencompassing nearly with arecord number oftopratings. Excellenceachieving (CSE) its2017CustomerService standard WPD celebrated 25years ofoutstandingcustomerservice, outstanding service 25 years of DELIVERING TODAY FOR A BRIGHTER TOMORROW

Advance a cleaner energy future Encourage responsible stewardship in partnership with our customers and stakeholders to have a sustainable environmental impact

Innovative project positions PPL Electric as a provider in the grid of the future The Keystone Solar Future Project is an example of the innovative thinking PPL Electric is using as new on-site generation technologies transform the utility environment.

The project will set up a “distributed system platform” that leverages the company’s existing smart grid technology to plan for, monitor and control distributed energy resources such as solar panels. In 2017, PPL Electric received a $3.3 million U.S. Department of Energy grant to pay a portion of the project cost.

The company’s Keystone Solar Future Project aims to smoothly integrate increasing amounts of customer-owned generation into the existing delivery network in a way that maintains a high level of service and reliability for all customers.

“Our customers’ interest in solar and other distributed energy installations increases each year,” said Stephanie Raymond, vice president-Distribution Operations. “We will innovate and adjust to these new developments, while continuing to provide safe, reliable, affordable service.”

The project will demonstrate that solar and other customer-owned generation – properly placed and integrated into the electric grid – can benefit the customers who install it and can have significant benefits for society.

Launched in 2017, the pilot program will seek to connect hundreds of new private solar installations by 2020 and to demonstrate the ability to control this generation to improve reliability and reduce electricity costs for all customers.

“Our smart grid technology has already enabled large strides forward in terms of reliability improvements,” Raymond said. “Now, we’ll take innovation to a new level to help manage the way distributed energy installations interact with the grid. Over the longer term, our goal is to manage all emerging technology, such as battery storage and smart thermostats, in a way that produces a sustainable and reliable two-way distribution grid.”

The project is expected to create jobs as local solar companies install additional systems and to lower costs for all customers, not just those installing private generation.

The total cost of the project is estimated at $9 million. PPL Electric will provide the balance of the funding in partnership with General Electric, EPRI, Landis+Gyr, Drexel University and BRIDGE Energy Group. 27 28 PPL 2017 SUSTAINABILITY REPORT • • • including: electric vehicles. There are 19projects currently underway, low-carbon suchassolarpanels,heatpumpsand technologies, methods toenablethewidespread adoptionby customersof Competitions, whichhaslaunchedprojects thattestinnovative WPD participatesintheU.K. Network Innovation Allowance and Expanding Renewable Energy advance asmarter,cleanerenergy infrastructure. of theactions we take –andwillcontinuetotake –are helpingto cleaner energy bothintheU.S. andintheU.K. As aresult, many for cleanenergy options,couldcontinuetoaccelerate ashiftto regarding greenhouse gasemissions, aswell asdecliningcosts sources withtraditional ones.We recognize thatconcerns balanced energy mix,combiningcleanandrenewable energy Reducing ourenvironmental impact isachievable through a ofpowergeneration anddelivery cleanerandmore efficient. PPL works toreduce itscarbonfootprintby makingthe Addressing ourenvironmental impact ADVANCE ACLEANER ENERGY FUTURE the transition tolow carbonsustainable communities. smart energy system thatwillprovide amodel tosupport Isles, aEuropean Union project that intendstocreate a WPD isproviding technicalsupporttotheSmart Energy vehicles atpeaktimesasthenumbersofEVs rise. participate inatrialtoensure theU.K. cancharge electric target ofrecruiting upto700electric vehicle usersto on distributionnetworks, continues ontrack toachieve its ofelectricthe impact vehicles thathomecharging (EVs) has Electric Nation, aninnovative two-year trialtoinvestigate programs leadingcustomersto adjusttheirenergy usage. increased engagementwithdemandsidemanagement With growing customerawareness, theproject couldleadto composition andcarbonintensityoftheirelectricity supply. application andwebsite toallow customerstoview the WPD partnered withtheCarbonTrust todevelop an • • • options onseveral fronts: LG&E andKUare investigating low-carbon, distributedgeneration the opportunityto share inlocalsolarenergy andreceive industrial customers across territories theutilities’ service Solar Share program, residential, whichgives business and LG&E andKUbeganacceptingenrollments intotheirnew demand times. to 906megawatts ofenergy, typicallyusedatpeak gas-fired combustionturbinescapableofproducing up 33-megawatt hydroelectric facility;andseven natural largest universal solarfacilityat10megawatts; a generating stationalsocontinues tobehomeKentucky’s operate a409-megawatt, coal-fired unitatthesite. The projects andnormalattrition. E.W. Brown willcontinueto employee separations asaresult ofthisclosure duetonew more than1,000 MWinjustunderfive years. There are no the totalcoal-fired generation retired by LG&E andKU to first quarterof2019.Theclosure oftheunitswillbring E.W. Brown Generating Stationtotaling272MWinthe KU announcedplanstoretire two coalunitsatthe their transportation environmental footprint. stations andsupportEVdrivers whoare concernedabout outdoor areas toimprove accessibility charging toregional access areas, suchasstreet parking,parkinglotsand drivers intheregion. Thestationsare locatedinpublic 2017, EV withotherlocationsbeingdetermined tobestserve stations across Kentucky. Eightstationswere installedin LG&E andKUbeganinstallationof20publicEVcharging source heatpumps. smart energy includingenergy technologies, storage andair Additionally, 10smarthomeswillbe pilotingavariety of solar-powered homesandin190oftheisland’s businesses. Energy managementsystems willbeinstalledin100 • • customer access torenewable anddistributedresources: In Pennsylvania, PPLElectric ismakinginvestments toexpand • is 14.7 percent. renewable energy obligation forJune2017through May 2018 solar, windandhydropower energy sources. Theprojected Electric bought for customers,including6percent from power sources comprised14.2percent ofthepower PPL portfolio standard. From June2016toMay 2017, alternative PPL Electric participatesinastatewide alternative-energy grid. For more details, gotopage27 of reliably andsafelyintegrating more solarpower onthe develop aDistributedEnergy ManagementSystem capable leverage PPLElectric’s existingsmartgridinfrastructure to Solar Future Project. Thethree-year pilotproject will Department ofEnergy tosupportthecompany’s Keystone PPL Electric hassecured a$3.3milliongrant from theU.S. three megawatts ofenergy storage. three testing bays andhasatotalhostingcapacityofupto Thesiteincludes technologies. costs oflarge-scale battery benefits andinvestigate operating needsandassociated allowing utilitiestodevelop, testandevaluate thepotential Demonstration Siteincollaboration withEPRI.Thesiteis LG&E andKUcreated anew Energy Storage Research and reached. commence oncefullsubscriptionofthefirstarray is tion. Construction ofthenew solarshare facilitywill amount ofsolarenergy produced basedontheirsubscrip- Share willreceive acredit ontheirmonthlybillforthe power thecommunity. CustomersparticipatinginSolar constructed, thefacilitywillgenerate energy thatthenhelps SolarShareand operate Facility. theregional Once credits ontheirmonthlybills.LG&E andKUwillbuild,own . DELIVERING TODAY FOR A BRIGHTER TOMORROW

Conserving and Protecting Water

PPL carefully manages the water it uses and monitors the impact of waste water discharged into waterways. The company supports programs that protect waterways and the ecosystems that depend on them in the service areas where the utilities operate. LG&E and KU 75% pay consumptive use fees to cover the costs of reservoir projects and storage space, designed to benefit all users and maintain adequate DECREASE IN AMOUNT river levels during low-flow periods. In the U.S., PPL’s utilities collaborate with a variety of stakeholders and state agencies to ensure that watersheds and reservoirs meet the needs of both the utilities and other stakeholders, including the public. OF WATER USED

For example, KU’s Dix Dam hydroelectric plant and the adjacent Herrington Lake is a public recreation area and serves to provide water for the city of Danville, Ky. The facility staff works with the Kentucky Department of Fish and Wildlife and Trout Unlimited to improve fish habitat in the area and the Dix River, which is connected to the lake. The staff also works with the Herrington Lake Conservation League, which holds local volunteer events for shoreline cleanups and other public activities. LG&E and KU plants adjacent to the Ohio River (Ghent, 96% Trimble County, Ohio Falls, Cane Run and Mill Creek) are in segments classified as warm water aquatic habitat, community recreation areas AMOUNT OF WATER and the source of domestic water for numerous communities. Voluntary company initiatives include riverbank cleanup and parking for RECYCLED AND REUSED fishermen and hikers.

LG&E and KU have greatly reduced the volume of cooling water withdrawn from the watershed by utilizing closed-cycle cooling instead of once-through cooling at its generating plants. Each facility also has a Groundwater Protection Plan, a Stormwater Best Management Practices Plan, and a Spill Prevention Control and Countermeasure plan that facilitates the safe storage of chemicals and oils on site. .17% Proper secondary containment and weekly inspections keep these chemicals out of the watershed and groundwater. IMPACT Consumptive water use at LG&E and KU facilities has decreased significantly over the past five years. The utility used 75 percent less (WATER WITHDRAWN water for each megawatt-hour generated in 2017 than in 2013, which can be attributed to the closure of older coal-fired units and the COMPARED TO WATERBODY SIZE) transition to natural gas generation. Further reductions are expected to continue as power plant efficiency improves and the company transitions to dry-ash handling at its Kentucky coal-fired power plants. For complete details on water management, see Appendix page 77.

29 30 PPL 2017 SUSTAINABILITY REPORT For completedetailsonemissions,seeAppendix page76. Emissions controls tofourofthecompanies' coal-fired power plantsto completed amulti-year, $2.8billionproject toaddenvironmental power facility, Kentucky’s largest. Inaddition, LG&E andKU LG&E andKUalsocompleted a10-megawatt universal solar construction ofanew natural gas,combined-cycle unit.In2016, retirement of800megawatts ofcoalcapacityandcompleted changed inrecent years. In2015,LG&E andKUcompleted the Like thenation’s generation fleet, LG&E's andKU’s fleet has in theU.S. represented less than2percent ofcoal-fired generation capacity 64 percent ofLG&E’s andKU’s generating capacity, which natural gasandrenewable capacity. In2016,coalaccounted for LG&E andKUgeneration currently includesamixofcoal, spinoffofourcompetitivestrategic generation business in2015. emissions butalsootherairemissions. Thegoalalsorecognizes the projects, are expected toreduce notjustourcarbondioxide actions, inadditiontofacilityupgrades andnew construction our own fleet, includingelectric andnatural-gas vehicles. These company operations. We are addinglower-emission vehicles to solar. We are alsotakingactions toreduce emissions from our generation tolower-emissions sources, suchasnatural gasand This goalisbasedontheongoingtransition ofourpower carbon dioxide emissions 70percent from 2010levels by 2050. 2018,PPLannouncedagoaltocutthecompany’sIn January Reducing AirEmissions ADVANCE ACLEANER ENERGY FUTURE (metric tonnes/net MWh) 0.87 Carbon intensity Sulfur dioxide emissions intensity 0.00041 (metric tonnes/net MWh) time areplacement vehicle isaddedtoitsfleet, ithaslower C0 use andlitersoffuelusedpervehicle, WPDisensuringthatevery effectively.territory To make aneffort toreduce bothtotalfuel the operate asignificantfleet of vehiclessoitsstaffcanserve With anetwork spread over anarea of55,000 km,WPDneedsto (E.W. Brown Units1and2). retire two coalunitstotaling272MWinthefirstquarterof2019 Finally, inNovember 2017, LG&E and KUannouncedplansto they were in2010. 45.16 percent and58.99percent lower, respectively, than nitrogen oxide andparticulatematterwere 83.79 percent, these emissions controls, 2017emissions ofsulfurdioxide, further reduce emissions andimprove operations. As aresult of generated. Seemore details onpage76. British thermalunits(BTUs)consumedpernet megawatt hour We continuetoimprove onourgeneration efficiency measured in Generation Efficiency page 38. Read more aboutefforts tomake ourvehicles more efficienton all ofitsbucket trucks withelectric-powered bucket lifts. maintenance and reduce work site noise, PPL Electric is outfitting As partofaninitiative tocutdown fuelemissions, vehicle emissions thantheprevious vehicle. Nitrogen dioxide emissions intensity 0.00048 (metric tonnes/net MWh) 2

handling ofcoal-combustionresiduals. at theiractive andretired coal-fired plantsandtransition to dry and closeashpondsothercoal-combustionresidual ponds LG&E andKUmadeprogress onanearly$1billionproject tocap gas generation. the closure ofcoal-fired unitsand theincreased useofnatural production hasdecreased 32percent from 2013to2017due Coal ashisoneoftheresiduals ofcoalpower production. Ash recycle thesematerials. innovative solutionsandopportunitiestoreduce, reuse and energy future andencourage responsible stewardship, we seek In keeping withthecompany’s commitmenttoadvance acleaner wastePPL hashighstandards from formanaging our operations. Waste MaterialsandEnvironmental Safety PERCENTAGE COAL ASH BENEFICIALLY REUSED 34.1% (in millionmetric tonnes) emissions (Kg) Total mercury 77 DELIVERING TODAY FOR A BRIGHTER TOMORROW

Drivers take action to reduce pollution While air pollution from individual vehicles is relatively small, when you add up all the vehicles on the roadway, they are the single largest contributor to the formation of ground-level ozone.

Ozone season takes place May through September each year when sunny, warm days can trap and heat nitrogen oxide and volatile organic compounds found in the air and form ozone.

As part of LG&E and KU’s ongoing environmental stewardship efforts, the companies’ Transportation Department encourages employees driving company vehicles to reduce idling time while on the roadways. Transportation uses a special monitoring system to track idling of the company’s vehicle fleet. With GPS tracking, the company monitors total idling time per month, based on the vehicle type and business area within the company. The information is tracked over time using an online dashboard.

The monitoring system defines and tracks idling when the vehicle is running and when the speed registers 0 miles per hour. The system then documents when a vehicle idles continuously for more than 3 minutes.

Through various forums such as tailgates and department meetings, group managers are able to educate employees on idling times and provide advice on best practices to reduce excess idling.

The initiative focuses on day-to-day driving practices, with the understanding that some company vehicles, such as bucket trucks and heavy-duty vehicles, often perform job functions that require continuous

Reducing idling is a team effort for LG&E and KU, with every employee operations. who drives a fleet vehicle doing their part.

31 32 PPL 2017 SUSTAINABILITY REPORT nature intheareas around ouroperations. also work withcommunityorganizations toprotect andpreserve while work isbeingdoneontheelectrical system. PPL’s utilities We take a lotofstepstoensure theenvironment isprotected community-driven environmental initiatives. energy, reduce theircarbonfootprintandlearnhow to support We helpourcustomersidentifyareas where they canconserve Communication with alllaws and requirements. accountable toourhighenvironmental standards andcompliance results thatcontributetoourbusiness success andholdsthem improve. PPLworks withcontractors andsupplierstofocuson to set goals,monitorandassess performanceandcontinually PPL useshealth, safety andenvironmental managementsystems Performance approach toenvironmental responsibility encompasses: programs toencourage energy efficiency. Ourmanagement upgrades atpower plants,carbon-free generation projects and safe andhealthy environment. We have invested inenvironmental business activities inways andpromote aclean, thatpreserve outallofour PPL hasalongstandingcommitmenttocarry Commitment to environmental responsibility andthecommunity ADVANCE ACLEANER ENERGY FUTURE Plant forthePlanet: BillionTree Campaign. The purposeofUNEP’s modeled aftertheUnitedNationsEnvironment Program’s (UNEP) 62 organizations. Theutilities' PlantforthePlanet program is In Kentucky, LG&E andKU provided PlantforthePlanet Grants to Plant forthePlanet additional cost. on theenvironment andreducing project risks atlittletono andwork methodstechnologies thatare lessening ourimpact The daylong event was heldtoeducateemployees onnew outwet soils. dry The forumalsocovered techniquesandmethods to safedigging animal habitatsandagricultural areas. roadways andconstruction pads through sensitive wetlands, environmental matting,whichisusedtobuildprotective The demonstrations includedadisplay oftechniquesusedfor environmental andconstruction realms. wood polereuse totheuseofaerialdrone technology inthe from hazardousdemonstrations spillresponse ofeverything and Forum. Thecompany’s Environmental Compliance staffgave first-ever PPLElectric Construction Methods Environmental Nearly 100PPLElectric employees andcontractors attendedthe PPL Electric Construction Methods Environmental Forum included: Beyond theday-to-day efforts, initiatives in2017 conservation

including theWildlife Trusts andthe Conservation Volunteers. organizations andworks withnationally recognized charities network area. Italsoresponds toadhocrequests from arange of program, WPDplants5,000 native trees annually across its and schoolstobenefitfrom cash awarded by WPD. As partofthis environmental activities and enablesarange ofgroups, charities wildlife. Keento beGreen istheumbrella brand ofcommunity promoting recycling initiatives andenhancingthelandscapefor network energy area withtheaimofencouraging conservation, In theU.K., WPDprovides supporttocommunitiesacross the Keen tobeGreen than 38,000 trees. launched, LG&E andKUhave contributedtotheplantingofmore will notinterfere withutilitylines.Sincetheprogram was must demonstrate thatmature trees resulting from theirefforts parkways orroadways thatmeet program objectives. Applicants suburban orrural projects, inforests andparks andalong LG&E andKUofferone-year grants of$500to$5,000 forurban, each year toward thisinitiative. continue theirefforts. Thecompany hasdedicatedupto$75,000 government agencieswitharecord ofsuccessful tree plantingto designed toencourage nonprofit organizations andlocal worldwide eachyear. Similarly, LG&E's andKU’s program is businesses together tocollectively plantover onebilliontrees tree-planting effort istobringindividuals,communitiesand Environmental Forum. company's first Construction Methods PPL Electric employees participateinthe DELIVERING TODAY FOR A BRIGHTER TOMORROW

Patrick Renshaw, project manager- Environmental, digs in during a planting event as part of PPL Electric’s Trees for a greener, Community Roots program. cleaner planet PPL Electric is greening up its service territory through a new program called Community Roots that will provide 20,000 trees in 2018 to select groups in its service territory.

The goal of the program is to give trees to county and municipal parks, environmentally focused groups and schools. In schools, Community Roots will be available to fourth-graders, provided the school they attend in PPL’s service area successfully applies for trees.

Demand for the program was strong. Within about six weeks, all 20,000 trees allocated for spring and fall planting in 2018 were claimed. The seedlings offered through Community Roots are Pennsylvania native species and are purchased from local nurseries.

Community Roots trees will be planted in 2018 throughout the Pennsylvania counties served by PPL. Nearly 100 organizations are participating, including more than 25 schools.

The environmental benefits of the trees from Community Roots will lead to greener, cleaner communities. Trees help remove carbon dioxide from the air and provide numerous other benefits. As part of the program, tree recipients are reminded to always plant trees away from overhead or underground utilities and to call 811 before any digging so underground utilities can be marked.

“When it comes to trees, we know not everyone likes that we must cut and trim in the rights of way to help ensure reliable service,” said Michael Hasel, manager, Environmental Compliance. “Community Roots represents a way to promote trees, and their benefits, without affecting reliability.”

33 34 PPL 2017 SUSTAINABILITY REPORT the bats. and allowed thework tocontinuewithoutdisrupting installation ofthebarrierwithinsubstationwas successful barriers toprevent noise disturbancetothebatroost. The Wales. WPDadoptedaninnovative method for installingacoustic from Natural Resources consultedwithlocalecologists engineers colony ofbatswithinandaround oneofitssubstations,the discoveredsmall-footed bat.WhenWPDengineers asignificant several studiesandinstalledhabitatprotection for theeastern installed poles.InPennsylvania, PPLElectric hasconducted than 150batswere from justoneofthe countedemerging eventually replace theexistingroost trees. At onetime, more utility poleswere fittedwithartificialbarktosupplementand the U.S. andFort FishandWildlifeService Knox. Over time, the partnership thatincludesCopperhead Environmental Consulting, roosting structures atFort Knox. Theproject isacoordinated 10 utilitypolesseveral years agothatare usedasartificial population oftheendangered Indianabat.Thecompany installed LG&E andKUsupportresearch intendedtohelpboostthe Bat Habitat projects thatprotect biodiversity: or endangered flora andfauna. Here are afew examplesoflocal like wetlands, waterways andcriticalhabitatforrare, threatened locations andaccess roads toavoid impacting sensitive areas sensitive resource areas. We routinely relocate structure avoid andminimizeimpacts totheenvironment, especiallyin ecosystems. PPLworks throughout allphasesofitsprojects to transmission linerights-of-way –canpotentiallyaffect – from water discharges andatmosphericemissions to All facets ofthedailyoperations ofelectric power companies Biodiversity initiatives ADVANCE ACLEANER ENERGY FUTURE its contributionstotheprogram. Station received theKentucky Cooperator oftheYear Award for have hatchedfrom thesenestboxes. In2017, Trimble County safe setting forthefalconstoprosper. More than100falcons Employees ensure thenestboxes atthepower plantsprovide a generation stations. Trimble County, CaneRun, MillCreek, GhentandE.W. Brown at many locationsthroughout Kentucky, including LG&E's andKU’s Department ofFishandWildlifeResources hasplacednestboxes of LG&E's andKU’s facilitiesforthelast20years. TheKentucky Kentucky, thanks inparttothededicationofemployees atmany In addition, peregrine falconsare makingabigcomebackin area. additional nestingplatformsthroughout theservice worked withthePennsylvania GameCommission toinstall formore than20years. In2017, territory its service PPLElectric Electric hasbeeninstallingosprey nestingplatformsthroughout develop improvements thatcanbeusedindustry-wide. PPL the RaptorResearch Foundation toshare bestpractices and also have collaborated withEEI’s Avian Power LineCommittee and enhance tracking ofallavian-related outagesandimpacts. We transmission-line designstodeter nestingandperching andto Those efforts have resulted intheimprovement of coming incontact withelectrical equipmentandpower lines. comprehensive Avian Protection Planstoprotect birds from procedures. LG&E, KUandPPLElectric have adopted and provide employee training onbird protection issues and sites sothatremedial actions canbeidentifiedandexecuted; track anddocumentallbird mortalitiesandat-risknest lines andotherelectrical equipmentinareas withhighbird risk; utilities usebird-safe methods fornewly constructed orrebuilt comprehensive approach toprotect birds andtheirhabitat. Our Through cross-department collaboration, thecompany usesa Birds the appropriate agency. avoided, mitigationplansare developed incoordination with PPL works tomitigateallrisks, butifaconflict cannotbe • • • • • • methods, including: Once identified,speciesare protected through a variety of system toaidinidentifyingandprotecting speciesofconcern. PPL Electric usesthePennsylvania Natural Diversity Inventory tofollowecologists bestpractices andenhancehabitats. vegetation clearance work. WPDworks closelywithlocal activities, includingaproject toprotect dormousehabitatduring protected speciesmanagementatWPDinvolved arange of speciesandhabitats.In2017,recognizing andmanaging awareness andassist ouroperational staffandourcontractors in identification andprotection ofendangered native species, raise company publishesaseriesofinformationsheets toaidinthe As partofWPD’s Protected SpeciesandHabitatsPolicy, the ongoing operations andmaintenanceoftheelectrical system. methods from sitinganddesignthrough construction and We supporttheprotection ofhabitatsthrough avariety of Protected Species Habitat offsets ifavoidances cannotbeaddressed concerns foravoidance duringconstruction Retain specialiststoflagany speciesof biologists/plant structure andspanthearea ofconcern) Design changestoavoid impacts (e.g., relocate atransmission Developing alternative routes toavoid impacts driving intosensitive areas areas ofconcernsuchasworking from helicopterstoavoid Adjustments toconstruction methods toavoid impacts in Adjustments toscheduledwork toavoid seasonalimpacts DELIVERING TODAY FOR A BRIGHTER TOMORROW

Native Plants

Utility rights-of-way provide ecological conditions that allow native species to thrive.

Employees survey hundreds of miles of electric transmission rights-of-way within our service territories and identify populations of native flowers and grasses. In the U.S., both PPL Electric, LG&E and KU use maintenance practices that help facilitate growth and will reintroduce native grasses and wildflowers when planting is appropriate. The utilities are members of the EEI Pollinator Working Group, which hopes to play a major role in managing pollinator habitat and protection initiatives. In the U.K., WPD implemented an invasive species management plan to ensure the appropriate measures were in place to minimize the spread of any invasive species present on work sites to avoid disrupting local biodiversity.

Vegetation Management

Millions of people served by PPL’s utilities depend on having reliable power for their homes and businesses. Effective vegetation management along high-voltage transmission lines is a critical part of maintaining that reliability. Our vegetation manage- ment program is designed to promote the safe, reliable operation of the electric grid while making sure we are sensitive to the concerns of property owners and our obligations to electricity customers. We work with conservation, land management and environmental groups to advance common goals of electric reliability and environmental stewardship.

Trees and other tall vegetation need to be kept away from power lines. If they get too close, power outages can result. Tree-related outages can potentially affect thousands of customers for extended periods of time. Keeping overhead power lines clear of limbs and brush also enables our crews to detect and repair issues that impact service during storms. Tree interference also creates the potential for a significant safety risk to our employees and the public.

PPL’s utilities conduct tree trimming throughout their service areas on a consistent and planned cycle using Integrated Vegetation Management to execute their program and maintain reliable service.

PPL Electric was recognized in 2017 by the Arbor Day Foundation with a Tree Line USA award, which recognizes electric utilities across the United States that demonstrate practices that enhance urban and community forests. In 2017, the utility also received an Industry Excellence award from the Southeastern Electric Exchange for implementing paperless vegetation management software.

PPL Electric began a unique partnership with the Lehigh Valley Zoo in 2017 to provide cut tree branches to feed one of the zoo’s newest additions, a Masai giraffe named Murphy. The cut branches, which normally would have gone through a chipper, were sourced locally from trees that were removed as part of ongoing electric reliability improvements in the area.

35 36 PPL 2017 SUSTAINABILITY REPORT investments inrecent years, PPL’s CO carbon footprint.As aresult ofPPL’s restructuring and strategic cleaner energy future andtaking stepstoreduce thecompany’s risks, exploringopportunitiesassociated withthedrive fora climate Our approach centersonunderstandingandmanaging Strategy business planningactivities. review andanalyzerisks andopportunities aspartofongoing risk managementprocess, PPL’s operating companiesregularly and enterpriseriskmanagement.Inadditiontoour climate changeaspartofouroverall business strategic planning We regularly assess risks andopportunitiesassociated with environmental andcorporate social responsibility initiatives. further itscorporate citizenship, includingsustainability, body responsible foroverseeing PPL’s practices andpositionsto its Compensation, Governance andNominating Committee asthe See Governance discussion onpage15.TheBoard hasdesignated leadership andPPL’s EnterpriseRiskManagementCommittee. in theresponsibilities ofPPL’s board ofdirectors, executive Oversight ofclimate-related risks andopportunitiesisincluded Governance financial filings. financial informationisdisclosedinourForm 10-Kandother risks; andourclimate-related metrics andtargets. Any material planning; how we identify, assess andmanageclimate-related and opportunities;impacts onourbusiness strategy andfinancial reporting adiscussion of:ourgovernance ofclimate-related risks Task Force onClimate-Related Disclosures, andincludein our climate change. We have considered therecommendations ofthe PPL regularly assesses risks andopportunitiesassociated with to climate change PPL’s approach ADVANCE ACLEANER ENERGY FUTURE 50 percent from 2010to2016. 2 emissions dropped about (including CO routinely considerfuture load,fuel prices, environmental costs Through ourIntegrated Resources PlanninginKentucky, we dynamic, resilient grid. lowest reasonable costrequirements andinvesting inamore lower-emitting generation inKentuckyconsistentwithKentucky’s to integrate more distributedenergy resources, investing in Our strategy includesusinginnovative goingforward approaches assets are expected todecline 45-90percent from 2005levels by Celsius, carbondioxide emissions from PPL’s Kentucky generation consistent withlimitingtheglobaltemperature increase to2° Under eachpolicy scenarioconsidered, includinga scenario Potential Impact other factors across thesescenarios variations incommodityprices, technology adoptionrates and its Kentuckygeneration assets. We considered potential potential impacts ofthree possible long-term policy scenarioson facilities. For thisassessment, thecompany analyzedthe operations. OurKentucky utilitiesown andoperate generation more than80percent of2017earningsdriven by ourdelivery PPL’s with portfolioisheavily focusedonelectricity delivery Our Analysis capitalize onnew opportunities. company istakingtomanageclimate-related risks andto it describesPPL’s approach toclimatechangeandstepsthe results ofPPL’s scenario-basedclimateassessment. Inaddition, levels. Thereport, publishedinNovember 2017, presents the aimed atlimitingglobalwarming to2°Celsius over pre-industrial resulting from future advances requirements andtechnological would publishanassessment ofthepotentialimpacts onPPL In August 2017, PPLCorporation committedtoshareowners thatit Climate Assessment Report Risk Management climate assessment report anddiscussed below. of climaterelated risks andopportunitiesisincludedinPPL’s approach tomeeting ourcustomers’ needs.Athorough analysis 2 price),andotherfactors indetermining thebest PPL developed aCO Metrics andTargets stakeholders. disclose environmental dataimportanttoinvestors andother Disclosure Project. CDP provides anotheroutlet forcompaniesto by CDP,annual climatesurvey formerlyknown astheCarbon published inNovember 2017. PPLwillrespond in2018toan assessment isavailable inPPL’s ClimateAssessment report andgrowto preserve shareowner value. Anin-depthrisk effectively tofuture changesinpolicy andregulation aswe look related publicpolicy matterstoensure we canrespond with climatechange. Inaddition, we willcontinuetoengage on PPL willcontinuetoassess risks andopportunitiesassociated Risks Associated withClimateChange on theseissues. resources. Inaddition, we are with regulators actively engaging actively manageoursystem andintegrate distributedenergy resilient. We to are alsoleveraging smartgridtechnologies related climaterisks andmake thegridmore reliable and transmission anddistributionoperations tomitigateweather- made, andcontinuetomake, majorinvestments across our and are economicallyjustifiabletoKentucky regulators. We have are operated consistentwithapproved frameworks regulatory to operate theexistingcoalunitswillbeminimalsolongasthey 2050. Moreover, we anticipatethatthefinancialriskofcontinuing current business mix).PPL’s CO by 2050from a2010baseline(or45percent countingonlyPPL’s Air Emissions” onpage30andintheAppendix onpage76. reducing vehicle fleet emissions. Seediscussion titled“Reducing reducing greenhouse gasemissions from substationsand U.S. andU.K. operations, suchasimproving energy efficiency, cost tocustomers.Andthey includetakingactions across PPL’s obligations toprovide atareasonable safeandreliable service with amixofrenewables andnatural gaswhilemeeting These includereplacing Kentuckycoal-fired generation over time expects toachieve thereductions through avariety ofactions. energy consumptionatcompany-owned facilities.Thecompany January 2018).PPL’sJanuary goalistoreduce CO 2 reduction goalin2017(announced 2 reduction goalencompasses our 2 emissions by 70percent DELIVERING TODAY FOR A BRIGHTER TOMORROW

Helping our customers go green

Our companies offer a variety of services to help customers save Research and Development energy, calculate their indirect greenhouse gas and carbon emissions and adopt renewable energy. Our customer programs Research and development into providing reliable and sustainable utilize advisory and educational resources, rebates and incentives electricity is an important part of today’s energy landscape. and technology, such as meters and online tools. PPL’s operating utilities participate in many research and Examples of program offerings include: development activities throughout the year, including company research, industry-wide studies and partnerships with educational • Conservation/home energy performance monitoring institutions and research organizations.

• Low-income weatherization In 2017, activities included:

• High-efficiency lighting • LG&E and KU partnered with EPRI to develop an energy storage demonstration facility co-located with the E.W. Brown • HVAC test and tune up Solar Plant. Research conducted includes studies designed to understand integration benefits and challenges for battery • New construction advisory services Contractors remove a PPL Electric customer’s old refrigerator, which will be sent to a recy- energy storage. cling facility for reclamation. The customer will receive a rebate for recycling the appliance • Load management options with financial incentives to reduce and helping the utility remove inefficient electric load from the grid. demand during peak hours • LG&E and KU have conducted several studies to understand emissions and cost benefits for converting customer end use • Appliance removal with incentives for replacement with technologies to electric from other fuel sources (e.g., natural • PPL Electric began the Keystone Solar Future Project in energy efficient appliances gas, propane, diesel, gasoline). partnership with Drexel University to model the effects of distributed energy on the grid. Read more about that project • Smart energy profiles and dashboards for monitoring usage and • LG&E and KU partnered with the University of Kentucky to on page 27. performance develop technologies that can capture carbon dioxide from coal generation. • As part of its Innovation Strategy, WPD conducts R&D • Student energy efficiency education activities across five broad areas: network performance and • PPL Electric partnered with EPRI on research related to efficiency; low carbon networks; smart grid and meters; and For more details on energy efficiency programs and savings, see energy storage, distribution systems, integration of environment and customer service. Progress is tracked and page 46. distributed energy resources and crisis communications. published on an annual basis through WPD’s Future Networks

Program.

37 38 PPL 2017 SUSTAINABILITY REPORT per hourofeliminatedidling. Fuel consumptionisoffset by asmuch1gallonofdieselfuel consumption, emissions, maintenancecostsand jobsitenoise. idling,whichinturnreduces fuel reducing theneedforengine equipment. Italsopowers heatingandcoolingintruckcabs, and lift.Thenew technology power usesbattery tooperate this vehicle’s topower engine themotortooperate theboom,bucket Historically, thecompany hasusedbucket liftsthatusethe trucks withthetechnology by theendof2026. electric bucket lifts.Thecompany’s goalistoequipall277 bucket By theendof2017, thecompany equippednearly50trucks with two years. lifeofeachvehicle by anadditional company extendtheservice sites. PPLanticipatesthatthenew technology willhelpthe for PPLwork crews thatnow finditeasiertocommunicateatjob The noisereduction provides asignificantsafety improvement all ofitsbucket trucks withelectric-powered bucket lifts. maintenance and reduce work site noise, PPL Electric is outfitting As partofaninitiative tocutdown fuelemissions andvehicle Battery-powered bucket trucks electricity-fueled transportation. electricity demandover thelongtermtosupportadoptionof is working tomake thesystem enhancementsnecessary tomeet EVs present opportunitiesasthey becomemore widelyused.PPL Electric vehicles ADVANCE ACLEANER ENERGY FUTURE electricity networks. solutionstofacilitateEVintegration onlocal smart charging EVs. TheElectric Nationproject willhelpdevelop thenecessary the U.K. Forecasts suggestthatby 2020there willbeover 1million At theendof2015, there were about50,000 EVs on theroads in their property. kind. Eachparticipantreceives afree smartcharger installedat recruiting 700homeowners toparticipate inthelargest trialof its The two-year research project isontrack toachieve its target of electricity networks. potential impact theincreasing popularityofEVs willhave on Nation operators. WPDistaking a proactive approach withElectric country’s electricity transmission anddistributionnetwork The growth ofEVs intheU.K. presents anew challengeforthe Electric Nation foruseby employees. territory stationsinitsservice charging Volthas 15plug-inChevy vehicles initsbusiness fleet and22EV environmental initiatives PPLhasundertaken. Thecompany also The battery-powered bucket liftsare justoneofanumber by 11 tonsannuallyforeachvehicle usingthetechnology. emissions. Itisexpected thatcarbonemissions willbereduced With thatfuelusereduction, PPLhasreduced itsvehicle vehicle. consumption ofapproximately 1,040 gallonsofdieselfuelper lift daily. Thisequatestoanannualreduction indieselfuel idlingisreplaced by thenewUp tofourhoursofengine electric , aproject thataimstobuildanunderstandingofthe use. stationsat theirlocationsforpublicorprivatehost EVcharging Through theutilities’ program, commercial customersalsocan user-friendly customerexperience. have display screens digital andquick-pay optionsfora plugsthatlockinthestandwhennotuse.charging They also The stationsare equippedwithsafety features, whichinclude station, theaverage rate isabout$3perhour. dependingonthelocationofeach exact feesandtaxes vary EV drivers stationspay whousethecharging anhourlyfee. While EV drivers intheregion. installed, withadditionallocationsbeingdetermined tobestserve KU’s As oftheend2017, territory. service eightstationswere stations across Kentucky, 10inLG&E’s and10in territory service LG&E andKUcommittedtoinstalling20publicEVcharging about theirtransportation environmental footprint. stationsandsupportEVdriverscharging whoare concerned was designedtohelpfurtherimprove accessibility to regional stations.Theprogramcustomers interested inhostingcharging infrastructure bothinpublicaccess areas and forbusiness 2016, theprogram committedtoinstallingnew EVcharging designed anddeployed infrastructures. EVcharging Launchedin the utilitiesgainedtheirregulator’s approval oftheprogram and standardsapplying EPRImethodologies, andstaffexpertiseas LG&E's andKU’s Stationprogram EVCharging was recognized for Electric Vehicle Charging DELIVERING TODAY FOR A BRIGHTER TOMORROW

Innovation helps to cut waste PPL Electric has found an innovative way to cut down on waste, while also making significant improvements for customers.

PPL Electric owns and maintains more than 7,000 miles of primary underground distribution cable. Over time, underground cables sustain damage from the environment, particularly water damage that causes corrosion in the cable, leading to faults and outages for customers.

The utility uses a process that extends the life of underground cables by injecting fluid into the cable insulation to better preserve its insulation properties. It can extend the life of cables by up to 40 years.

By choosing that technology over replacing the cable, PPL Electric has significantly cut down on waste. It also saves valuable resources, such as the copper and aluminum that are used to make cable and the diesel fuel that powers vehicles to transport it.

Every mile of cable that is injected – rather than disposed of – re- duced global warming potential by the equivalent of 300 metric tons of carbon dioxide, according to Novinium, which recognized PPL Electric as one the top 10 utilities making use of cable rejuvenation. That is done by avoiding the impact of having to replace copper, plastic and aluminum and avoiding use of fuel to transport those components.

Since starting to use the cable curing process, PPL Electric has cured nearly 300 miles of cable, including 61 miles in 2017.

That work represents a significant reliability improvement and helps keep costs down, two components that are crucial to customer satisfaction.

Over the life of the program, PPL Electric expects to save $32 million by using the curing process, rather than the traditional Geetha Srinivasan, business operations analyst for PPL Electric, full cable replacement option. leads the project to rejuvenate underground cables.

39 40 PPL 2017 SUSTAINABILITY REPORT to enhancereliability and addingcapacitytopromote economicgrowth in itsregion. natural gastransmissionreplacing aging outreinforcement projects lines,carrying lineswithnew plasticpipe,system. steelservice Thiswillincludereplacing aging Moving LG&E plans toexpandinfrastructure upgrades forward, withinitsnatural gas replacement program. natural gassystem includingits regular andgasriserinspection and leaksurveys Completion oftheprogram buildsonLG&E’s ongoing safety measures withinits integrity regulations tookeffect in2011, puttingthecompany well aheadof thecurve. It was aninitiative thatcame15years before stringentfederal distributionpipeline approval Commission. oftheprogram from theKentuckyPublicService improving thefuture safety andreliability oftheutility’s system andreceived company recognized thetime-intensive work asaworthwhile effort toward While replacing thepipelineswas notrequired whentheprogram started,the allowed ustoputadditionalinfrastructure upgrade plansinplaceforthefuture.” enhance thesafety ofoursystem forourcustomerswell inadvance ofourpeersand having theforesight toputthisupgrade inplacewhenwe didhasenabledusto the lastfive years,” saidJohn P. Malloy, vicepresident-LG&E GasDistribution. “So “Many utilitiesacross onlybeganmakingthese typesofupgrades within thecountry time, withmore durable plasticnatural gaspipelines. and bare steelnatural gaspipelines,whichare more vulnerable todegradation over LG&E establishedaprogram castiron, toreplace 540milesofaging wrought iron The finalstretch of work wrapped upaninitiative thatbeganbackin1996when Louisville inJune2017. LG&E completed along-termgasmainreplacement project intheheartofdowntown ahead of thecurve Natural gaslineupgrades and efficientgridthatfosterscontinued progress andacleanerenergy future Invest intomorrow’s energy infrastructure by developing amore reliable, resilient energy infrastructure Build tomorrow's over nearly21 years. company hasreplaced more than500milesofpipeline long-term gasmainreplacement project. Intotal,the A crew installingasegmentofthelastportionLG&E's DELIVERING TODAY FOR A BRIGHTER TOMORROW

WPD is deploying new fault location equipment that will enable In the U.S., PPL complies with all mandatory cybersecurity Infrastructure investments teams to locate transient cable faults before they become standards, developed through the Federal Energy Regulatory for a smarter grid permanent. The equipment can detect and analyze issues, Commission and the North American Electric Reliability Corpora- restoring supplies and reporting the event to the relevant team to tion. PPL regularly assesses our processes and procedures against In 2017, PPL completed $3.5 billion of infrastructure investments to investigate and take action when appropriate. This proactive voluntary standards and cybersecurity frameworks such as the build a smarter, more dynamic and more secure energy grid and approach helps manage customer interruptions and reduces National Institute of Standards and Technology’s Cybersecurity advance a cleaner energy future, including investing more than minutes out of power. Framework and the Department of Energy’s Cybersecurity $1 billion in each of the regions in which we operate. Capability Maturity Model, commonly known as C2M2. A Safer, More Secure Network In Pennsylvania, PPL Electric invested more than $127.5 million Protecting our critical infrastructure isn’t a singular effort – it is a installing about 600,000 new meters that enable better manage- A robust power grid results in a resilient system that limits the shared responsibility. Our industry is committed to working across ment of power usage, more accurate outage reporting and new impact of natural and physical events. The investments we are the public and private sector to protect the energy grid. PPL takes functionality that improves customer service. making help secure the flow of power to our customers and defend an active role in collaborative efforts. PPL provides strategic the bulk electricity system – and our customers’ data and privacy guidance and input to the Electricity Subsector Coordinating Additional investments in smart grid technology include pole-top – from attack. Our industry takes grid security and reliability Council (ESCC). The ESCC serves as the principal liaison between sensors that detect outages, technology that quickly analyzes the responsibilities seriously, and the ability to share sensitive the electric sector and the federal government for coordinating location of faults and remote-operable switches to quickly reroute information with the federal government about power grid efforts to prepare for and respond to national-level disasters or or restore power. PPL Electric also invested more than $383 million facilities and operations, including information about threats and threats to critical infrastructure. PPL participates in mutual-assis- to build four new substations and rebuild 110 miles of transmission vulnerabilities associated with such infrastructure, is a crucial part tance cybersecurity measures including the Electricity Information lines to strengthen grid resiliency. of our strategy to protect the grid and make it more resilient. Sharing and Analysis Center and Cybersecurity Risk Information LG&E and KU are investing in new technologies throughout their As the threats to our business and energy infrastructure evolve, we Sharing Program, two information-sharing efforts to bolster distribution system. The utilities received approval from the are changing how we respond to those threats. We have made – situational awareness and reduce risk. Kentucky Public Service Commission for a $112 million distribution and continue to make – significant investments in tools, technolo- Crisis management plans provide resiliency and timely restoration automation project to improve reliability. Over the next six years, gy and people to strengthen our defensive capabilities and and testing those plans is essential. PPL conducts exercises and the utilities will install the devices throughout the system and enhance grid reliability and resiliency. We continually assess the drills to help us test our incident protocols and critical functions integrate advanced technologies that will improve reliability for risk landscape and improve our understanding of potential threats, and identify areas for improvement. As a company, PPL continues customers by allowing for immediate detection when a fault motivations and techniques. Using this knowledge, we layer on to test its own critical functions, response and playbooks through occurs and the ability to reroute and restore power to as many physical and cyber protections to further reduce risk, increase regular drill activities. customers as possible, as quickly and safely as possible. resiliency and maintain the integrity of our systems. We take a defense-in-depth approach to protecting grid assets. This In addition, PPL’s continuing investments in new power lines and In the U.K., WPD was engaged in nearly two dozen projects to includes: rigorous, mandatory, enforceable and regularly audited substations help strengthen the power grid and make it more explore low-carbon technologies and help networks enable reliability standards; close coordination and information sharing resistant to security events. increased adoption of renewables, electric vehicles, heat pumps, among our industry and with government partners at all levels; and energy storage and demand-side management. Investments in efforts to prepare, respond and recover should power grid these projects totaled $18.9 million in 2017. operations be affected in any way.

41 42 PPL 2017 SUSTAINABILITY REPORT BUILD TOMORRO'W ENERGY INFRASTRUCTURE America. the bulkpower system inNorth authority responsible for regulatory The drillisconducted by NERC, the and MexicotookpartinGridExIV. organizations intheU.S., Canada andgovernment450 industry More than6,500peoplefrom rushed to“restore power.” and reassuring customersasthey crisis plans,coordinating responses situation, runningthrough their IV asthey would atruedisaster Grid operators responded toGridEx the grid. physical threats andattacks against response tosimulatedcyber and designed totesttheindustry’s part ofGridExIV, anexercise workers across NorthAmericaas employees joinedthousandsofutility PPL Electric, LG&E andKU In November 2017, about 200 might affect thebulkpower system. respond tothreats orattacks that GridEx toimprove ourreadiness to participate inevents like thebiennial PPL Electric, LG&E andKUregularly This isatest … threats andattacks againstthepower grid. drills andsimulationsregularly throughout theyear toprepare theutility’s response to Vince Cuce, manager-Emergency Preparedness forPPLElectric, leadsemployees in DELIVERING TODAY FOR A BRIGHTER TOMORROW Exceed customer expectations Provide safe, reliable and environmentally responsible energy at the lowest reasonable cost

Debbie Leist (center), director of Customer Service and Marketing for LG&E and KU, with Billy Barnett (left) and Chad Francisco (right), service technicians, whose effort is just one example of how employees strive to "Go BEYOND" in their interactions with customers.

After completing an inspection, both men noticed the transformer Initially launched in 2009, the “Go BEYOND” Customer Experience Going above and beyond connected to the house needed an upgrade. initiative was designed to create an awareness among employees for customer service that everyone, regardless of whether they work in a customer- “We could have easily changed the wires, and that may have fixed facing role, impacts the customer experience. Most people couldn’t imagine starting their day without a cup of the problem in the short term,” said Barnett. “But we wanted to do coffee. So, when customers Don and Robin Smith from Somerset, the job right, and that meant replacing the transformer, too.” “Keeping the customer experience top of mind in everything we do Kentucky, saw KU trucks outside their house, Don was worried the is a key part of our company culture. We want employees to feel The following day, line technicians arrived at the Smiths’ house empowered to make decisions that positively impact customers’ crews would shut off power before he could brew his morning cup bright and early, and connected with them before starting work. of Joe. interactions with our company,” said Debbie Leist, director of The crew made sure the couple had time to make their morning Customer Service and Marketing and lead of the utilities’ Customer What the Smiths may not have realized is that the crew – like their coffee and get ready for the day before shutting off power to their Experience advisory committee – comprised of directors co-workers at LG&E and KU – keeps the customer experience top home to replace the old transformer and wires with new ones. throughout the company, brought together in 2015 to help broaden of mind. The effort is just one example of how LG&E and KU employees the effort. A day earlier, Billy Barnett and Chad Francisco, service technicians, strive to “Go BEYOND” in their interactions with customers. As part of the initiative, an internal, mobile friendly webpage met the Smiths after the couple reported the lights inside their provides employees with tools and practical ways to enhance every home were constantly flickering. customer interaction. 43 44 PPL 2017 SUSTAINABILITY REPORT A PPLElectric customerverifies hisinformationforanenergy efficiency rebate. EXCEED CUSTOMER EXPECTATIONS western Kentucky, aswell aspartsofsouthwestern Virginia. nearly 1millioncustomersthroughout central, southeasternand customers inKentucky. LG&E andKUprovide to electric service distribution andsaleofnatural gastomore than326,000 and, inKU’s case, andTennessee. Virginia LG&E engagesinthe transmission, distributionandsaleofelectricity inKentucky LG&E andKUare engaged intheregulated generation, Below isinformationaboutourcustomers,by business unit: areas we serve. customers atareasonable cost,improving qualityoflifeinthe to provide toour thehighestquality, safeandreliable service generates electricity from power plantsinKentucky. We strive Tennessee; delivers natural gastocustomersinKentucky;and customers intheU.K., Pennsylvania, Kentucky, and Virginia its regulated utilitysubsidiaries,PPLdelivers electricity to to more than10millioncustomersintheU.S. andU.K. Through The PPLfamilyofcompaniesprovides essential energy services Our customers CUSTOMERS Large Commercial Public Authorities Large Industrial Gas Transport Street Lights Residential Municipals End Users TOTAL KU Electric LG&E and 963,955 816,539 128,810 3,230 13,217 2,149 10 LG&E (Gas) 326,336 299,354 25,287 1,194 420 81 regions ofEnglandandSouthWales.regions coveringregion theEastMidlands,SouthWest andWest Midlands electricity toabout7.9 millionend-usersina21,600-square-mile the supplierisresponsible forbillingend-users.WPDdistributes the end-users.WPDbillsenergy and supplierforthisservice who useWPD’s networks totransfer electricity totheircustomers, tolicensedthird partyenergyservices suppliers(itscustomers) WPD intheU.K. provides regulated electricity distribution the state’s Electric Competition Act. including from PPLElectric asaProvider of LastResortunder choose topurchase theirelectricity from various suppliers, eastern andcentral Pennsylvania. PPLElectric customerscan customers ina10,000-square in29countiesof mileterritory PPL Electric delivers electricity toapproximately 1.4million Power Company. miles. InVirginia, KUoperates underthenameOldDominion territories spanapproximately 4,800non-contiguoussquare customers inTennessee. Overall, LG&E’s andKU’s service The companiesalsoprovide electricity tofewer than10 PPL Electric 1,432,366 1,249,299 179,393 3,674 7,875,322 7,875,322 WPD 10,597,979 TOTAL DELIVERING TODAY FOR A BRIGHTER TOMORROW

Customer satisfaction PPL’s utilities provide an outstanding service experience for our customers, consistently ranking among the best for customer satisfaction in the regions we serve.

Customer feedback is important to us as we look to continuously improve. For that reason, PPL relies on independent market research firms to conduct periodic customer satisfaction surveys.

In addition, we subscribe to syndicated studies, such as J.D. Power, as another way to gain insight about our customers from an objective source. We use the results of this feedback to evaluate our service and identify customer interests and concerns, and determine critical needs and offer our customers an opportunity to communicate their interests and concerns.

Customer feedback is obtained through telephone and online surveys, advisory boards, focus groups, online panels, mail surveys and customer service lines. A summary of results and insights is prepared and distributed monthly by the customer service departments of each operating subsidiary. Executives review customer satisfaction results on a quarterly basis.

2017 Customer Satisfaction Results

WPD was again rated as No. 1 in its industry for customer satisfaction in the U.K., with its four Distribution Network Operator WPD Contact Centre Adviser Kate Kenny at work. (DNO) license areas securing the top four places out of the 14 measured by Ofgem. As part of the Ofgem Broad Measure of Customer Satisfaction incentive, a selection of customers from all WPD maintains this high level of service by developing Electric’s score, 739 out of 1,000, was 34 points higher than the DNOs is surveyed monthly. The surveys monitor satisfaction with a improvements based on customer feedback received in the previous year. DNO’s handling of outages (both planned and unplanned), company’s extensive stakeholder engagement program. Senior managers review individual comments to identify specific business LG&E and KU earned the top two rankings for residential customer connections (quotations and completed work) and general satisfaction among utilities in the Midwest midsize region in 2017. inquiries. About 15,000 WPD customers are surveyed annually. changes that will help the company maintain its industry-leading performance. In the midsize utility segment in the Midwest region, KU ranked In addition, WPD celebrated a milestone in 2017, holding the In 2017, PPL Electric ranked highest among large electric utilities in highest for the second consecutive year, with a score of 761. LG&E Customer Service Excellence Standard – formerly the Charter Mark ranked second with a score of 743. – for 25 years. WPD is the only energy company in the U.K. to have the eastern U.S. for residential customer satisfaction for the sixth achieved this feat. year in a row, according to a J.D. Power study. The achievement is a testament to the ongoing work of employees The J.D. Power award means PPL Electric has landed the top spot to develop advanced technology and offerings to meet customers’ among large electric utilities for 14 of the 19 years that J.D. Power needs. has been conducting its residential electric customer survey. PPL 45 46 PPL 2017 SUSTAINABILITY REPORT more than$35.7 millioninenergy efficiency rebates. programs forresidential andcommercial customers,receiving participants tookadvantage ofourutilities’ energy efficiency their energy usethanever before. In2017, more than1million PPL’s customersmore subsidiariesgive optionstomanage Energy Efficiency infrastructure. boosting efficiency andmakingsmart investments inour We intendtokeep rates affordable by reducing operating costs, which isbelow average theregional of$106. 1,000 kwhofelectricity willpay between $99 and$105permonth, Kentucky, Mississippi andTennessee) region. Acustomerusing electric utilitiesintheEastSouthCentral (includesAlabama, LG&E's andKU’s residential rates are below theaverage for in themid-Atlantic region. about $132permonth–$15less thantheaverage customer Pennsylvania). Acustomerusing1,000 kwhofelectricity willpay (18companiesinNewmid-Atlantic region Jersey, New York and PPL Electric customers’ costsare below theaverage ofthe Winter 2017. averagesregional basedonEEI’s Average Rates Reportfor In theU.S., ourutilitiesmaintainresidential rates below the it was in1992,whenadjustedforinflation. The average price ofelectricity intheU.S. today isless than Electricity stillprovides agreat value forourcustomers. Affordable Energy EXCEED CUSTOMER EXPECTATIONS • • • ourcustomers: some ofthetoolswe usedin2017tobetter serve alternatives improve customers’ opinionsoftheirutility. Here are power data, outageupdates.According tosurvey these number ofoptionsinotherareas, from billingalternatives to At thesametime, we customersagreater tookstepstogive peak demandby more than259megawatts across ourbusiness. more than 671 millionkilowatt-hours ofelectricity andreduced In all,ourenergy efficiency programs helpedcustomers save Leadership inEnergy andEnvironmental Design. audits, new construction andmajorrenovations, including equipment. Theprogram alsooffersincentives forenergy motors, pumps,variable frequency drives andother qualifying high-efficiency lighting, A/C units,chillers, program offerstheincentives forcustomersinstalling upgrading orinstallinghigh-efficiency equipment.The commercial customersoffsetto helpeligible thecostof LG&E's andKU’s Commercial Rebateprogram isdesigned energy-saving products. receive afree energy efficiency kitcontaininga variety of personalized tipsonhow tosave energy. Participants also assessments. Customersprovide basicinformationtoget PPL Electric offerscustomersfree onlineenergy in response toanautomatedsignal. electrical consumptionorincrease theironsitegeneration asks half-hourlymetered customerstoreduce their network andearnrevenue forbusinesses. FlexiblePower to understandhow demandsideresponse canbenefitthe WPD launchedtheFlexiblePower initiative, apilotprogram KILOWATTS-HOURS SAVED DURING PEAK DEMAND DURING PEAK MEGAWATTS REDUCED $35.7M 671M IN REBATES 259

DELIVERING TODAY FOR A BRIGHTER TOMORROW

Boosting energy efficiency, reducing costs PPL Electric is in the midst of a multi-million-dollar project to convert all 25,000 leased area lights on its system to more energy-efficient LED technology.

Area lights are single lights used primarily to illuminate parking lots and other smaller areas. They do not provide light for roadways like streetlights do.

PPL Electric replaced 20,000 area lights in 2017 and will convert the balance by the middle of 2018.

“With the technical advances in LED lighting, it’s now feasible to upgrade these lights and remove the high-pressure sodium and mercury-vapor lights that are out there,” said Steve Gelatko, director, Distribution Asset Planning. “LED area lights are twice as efficient as high-pressure sodium and four times more efficient than mercury vapor.”

The energy and cost savings for customers are significant. It’s estimated that by the end of 2017, area light conversions saved customers 12.5 million kilowatt-hours. That’s enough electricity for more than 1,100 average U.S. homes for a year.

The LED area light conversions are expected to save customers nearly $1 million a year.

There are also operations and maintenance savings for PPL. Because LED lamps are projected to last about 25 years, the level of area light lamp replacements will decrease significantly.

In addition to converting area lights to LED technology, PPL Electric has been working with communities to convert streetlights to LEDs. About 20,000 of the approximately 100,000 streetlights leased from PPL Electric have been Brian Wynn, project manager for PPL Electric, converted to LED. stands under one of the 20,000 area lights his team worked to convert to energy efficient LED technology in 2017.

47 48 PPL 2017 SUSTAINABILITY REPORT Since 2008,through participationinLG&E's andKU’s energy efficiency programs, customers have: programs foritscustomers.Theseprograms helpedcustomerssave more consumption andpeakdemand,PPLElectric offers11 energy efficiency Under Pennsylvania’s Act tohelpcost-effectively 129 reduce electricity analytics andinformationaboutavailable energy efficiency rebates. meansandinperson.digital Itincludesenergy savings tips,home-energy is distributedthrough onlineandtelevision advertising, by mail,through commercial andresidential customersonaregular basis.Thisinformation PPL’s utilitiesshare importantenergy efficiency informationwithboth Customer Education EXCEED CUSTOMER EXPECTATIONS ANALYSES PERFORMED ON-SITE HOME ENERGY ONLINE HOME ENERGY ANALYSES RECEIVED 16,000 31,000

WEATHERIZATION SERVICES RECYCLED REFRIGERATORS 55,000 19,677 BENEFITED FROM AND FREEZERS capacity by 2018andreached thatgoalayear earlyin2017. The utilitiesset agoalin2008ofsaving approximately 500megawatts of equates toanew power plant. programs have beenabletooffset roughly thesameamountofenergy that LG&E andKUcustomerswhohave embraced theutilities’ energy efficiency 319,500 homesforayear. since theprogram’s inceptionin2009,orenoughtopower more than than 505millionkWhofelectricity in2017andmore than2.85billionkWh

DEVICES INSTALLED THAT NEEDS THROUGH DEMAND 230,000 COMMUNITY’S ENERGY HELPED MANAGE THE CONSERVATION

REBATES FORHIGH-EFFICIENCY APPLIANCES ANDPRODUCTS REBATES FORBUSINESS FACILITY UPGRADES $13M $15M

DELIVERING TODAY FOR A BRIGHTER TOMORROW

Stakeholder engagement

A stakeholder is anyone with an interest in our business, or who is affected by what we do. PPL and its subsidiaries reach out to stakeholders on both a formal and informal basis. Our Investor Relations department answers questions from investors directly and at investor events; our Customer Service teams respond to customer inquiries; and our Public Affairs team consults with state and national regulators and public officials on a regular basis and regularly engages subject matter experts. We track customer service issues, including response time and reliability as a part of our regular operations. We conduct regular market research to establish customer satisfaction.

We are active with community groups that help us understand the connection between their needs and our role as an energy provider and employer. The company regularly schedules public open houses on major infrastructure projects. In addition, we monitor WPD holds annual stakeholder engagement events, which help and respond to stakeholder feedback at public hearings, forums or to shape the company’s business plan. town halls hosted by regulators and public officials who are considering our operations. LG&E and KU’s demand side management/energy efficiency • Annual stakeholder workshops, which include Consumers and communities are represented in the U.S. by the advisory groups provide forums for customer groups to discuss representatives from key segments to enable balanced following groups: existing programs and potential development efforts. consideration of different interests. This includes local authorities, domestic customers, consumer bodies, Consumer advisory panels consist of business and community PPL Electric Act 129 stakeholder groups provide a forum for a businesses, developers, utilities and DNOs. leaders from within the utilities’ service areas who meet quarterly cross-section of the energy provider’s customers, including to discuss topics of interest for utility customers and the industry. low-income customers, to provide input and advice on energy • Market research and workshops on topics such as The panels typically participate in tours, discussions and efficiency programs and services. community energy, fuel poverty and vulnerability, future presentations held at company sites throughout Kentucky. The energy scenarios, distributed generation, small business panels review, discuss and offer feedback on key issues. Topics In the U.K., WPD’s extensive stakeholder engagement program is concerns and network losses. often include the environment and customer service initiatives as conducted annually and designed to be inclusive, tailored and well as infrastructure and facility upgrades. Local elected officials focused on action. In 2016/17, the company engaged with more • Engaging members of Parliament and key policy makers are often invited to attend the meetings. than 14,000 stakeholders at 130 events ranging from workshops to through periodic parliamentary receptions. meetings. Customer commitment advisory forums promote dialogue • WPD has a comprehensive social obligations strategy and between the utilities and their low-income advocate stakeholders. Some of WPD’s key activities include: program with the objective of supporting its most vulnerable The aim is to provide guidance regarding policies and practices customers in relation to power outages and also to tackle related to service to customers in need. • WPD customer panel, a permanent group of more than 30 wider issues such as fuel poverty. In the U.K., fuel poverty is expert members who meet quarterly. defined as low-income households that cannot be kept warm at reasonable cost. 49 50 PPL 2017 SUSTAINABILITY REPORT translation service permonth.translation service 29 languageswith approximately 800customersutilizingthis 140 different languages.In2017, customercallswere translated in language insteadofEnglish. provides Theservice access toover customers whowould prefer toconduct business intheirnative representatives toincludeatranslator incommunications with LG&E andKUprovide live calltranslation thatallows customer English andSpanish. customer brochures andcommunicationsavailable inboth languages. Additionally, thecompany makes many ofits communicate withassociates abouttheiraccountinover 75 thatallowscenters useatranslation service customersto assistance inthelanguagethey prefer. Thecompany’s call PPL Electric wants toensure thatcustomerscanreceive Language Assistance some examples: range ofresidential andcommercial customerneeds.Here are are available tomeetA numberofspecialservices thebroad customers. demonstrate thermometer cards usedaseducationtoolstoassist vulnerable Age Cymru’s Angharad PhillipswithcustomerPhyllis Preece andWPD’s KyleSims forSpecial services ourcustomers EXCEED CUSTOMER EXPECTATIONS from shutoffs,debtforgiveness andreferrals tootherassistance customers thatoffers reduced monthlypayments, protection OnTrack isaspecialpayment planforPPLElectric’s low-income contributed $550,000 inadditiontocustomercharges. residential meter charge ($.25 per meter); LG&E andKU Home Energy Assistance isfundedby a Program (HEA) paying theirenergy bills. Community Ministriestoassist customers whoneededhelp and KUprovided a$500,000 grant totheAssociation of government assistance officestohelpcustomers.In2017, LG&E relationships withlocalcharities,communityaction groups and customer contributionstotheprograms. BothLG&E andKUhave tax-deductible donations.Inaddition, thecompaniesmatch offered by theprograms iscontributedby customers through assistance fortheutilities’ qualifyingcustomers.Theassistance third-party heatingassistance programs thatprovide heating Winterhelp (LG&E), WinterCare (KU)andWinterShare (ODP) are illness, loss injury, ofjoborhighmedicalbills. hardships suchas forcustomerswithtemporary referral service program. CARESand Referral isaspecial Evaluation Service Operation HELP alsosupportsCARES, theCustomerAssistance helped since1983,with2,745 familiesreceiving grants in2017. retirees andcustomers.More than96,700 familieshave been tax-deductible contributionsfrom PPLCorporation, employees, financial hardships. Theprogram isfundedjointlythrough customers tohelppay energy billsforlow-income familieswith Operation HELP provides financialaidtoPPLElectric residential Financial Assistance to jointheirconversation ifthey needatranslator. Additionally, customerscanrequest aLanguageLineinterpreter provided inarange oflanguages,includingBraille, onrequest. aloud andusinglarger font.Letters andpublicationscanbe tionality whichincludestranslation in102languages,reading text WPD’s improved website includes the‘speak or translate me’ func- messages aboutplanned electricity supplyinterruptions. special helpthrough theBritishRedCross andproactive power outage, apassword tobeusedforany neededhomevisits, customers whojoinwithadirect numbertocallintheevent ofa vulnerable intheevent ofapower outage. provides Theregister specific communicationneedsor who would bedistressed orfeel electricity formedicalequipmentorare elderly, ordisabled,have forcustomerswhorely on Register WPD offersaPriorityServices Vulnerable Customers efficient asa resultoftheonsiteanalysis. customers whotake action tomake theirhomesmore energy portfolio ofofferings,financialincentives are available toeligible Through theotherprograms offered aspartoftheutilities’ full efficiency andidentifying ways they can reducetheirenergy use. from the utilities’ business partnerassessing theirhome’s energy in need.WeCare participantsreceive awalk-through analysis energy customers educationtohelpLG&E andKUincome-eligible Energy) isdesignedtocreate savings through weatherization and WeCare (Weatherization, Conservation AdviceandRecycling are free.measures andservices and energy saving measures forcustomers,whenapplicable. All and lower provides theirelectric bills.WRAP energy education customers withlimitedincomesreduce theirhomeenergy use WRAP Energy Savings benefitted from Affordable Warmth, saving $1.3million. helped 7,205 customerssave $1.8millionand3,528customers need ofsupporttohelppay theirenergy bills.In2016/17, Power Up programs. Theutilityworks withpartnerstorefer customersin Power UpandAffordable Warmth are WPD’s fuel poverty referral Pennsylvania. programs. Itisfundedthrough residential customerrates in –PPLElectric’s WinterRelief Assistance Program helps DELIVERING TODAY FOR A BRIGHTER TOMORROW

As part of Deaf Awareness Week, WPD Contact Centre Advisers Hywel Jones (left) and Richie Harris learned sign language from fellow Contact Centre Adviser Angharad Davies. Increasing access for all customers WPD has become one of the first distribution companies in the U.K. to sign up for a suite of applications that improve website and accessibility for customers with sight or hearing impairments.

ReciteMe and SensusAccess, also known as Robobraille, help customers with sight impairments or dyslexia use WPD’s website. InterpreterNow and the Next Generation Text (NGT) Service and its application gives customers with hearing difficulties the option to make calls from a variety of devices. The application avoids the need to switch between text and voice so the flow of conversation is improved.

In another boost to the service, 32 customer service employees completed deaf awareness training to further improve their communication skills. The training, led by charity Action on Hearing Loss, was tailored to WPD with the aim of helping staff better understand some of the frustrations that people with hearing loss can feel when communicating with others.

Both the app launch and training come just weeks after Action on Hearing Loss awarded WPD its Louder than Words Charter Mark for the seventh successive year. The nationally recognized accreditation requires its holders to satisfy 10 quality standards. Of the 1.4 million customers who have signed up to WPD’s Priority Service Register, 95,000 are deaf or suffer from hearing loss.

51 52 PPL 2017 SUSTAINABILITY REPORT achieving exceptional results. employees providing andacceptingfeedbackasthey focuson atmosphere ofemployee engagement andaccountability, with In recent years, thecompany hasbuiltaculture thatnurtures an an increasingly constructive workplace culture. The commonthread toPPLElectric’s continuedsuccess hasbeen collaboration driving innovation, Constructive culture and accountability. of employee engagement anatmosphere that nurtures The company hasbuiltaculture development, encourages employee engagement andenablesemployees toachieve theirfullpotential Cultivate success by energizing aninclusive, respectful anddiverse workplace thatrewards performance, enablesprofessional Foster anexceptional workplace worker safety. providing input,suggestions andfeedbackdesignedtoimprove overterritory asix-month periodwiththeassignment of advocates. Theadvocates visitjobsitesacross theservice One examplealready inpractice isbargaining-unit safety more efficient. intobigdatatomakean analyst digging equipmentmaintenance electricians comingupwithsolutionstoasubstationproblem. It’s workers contributingideasonhow ajobcanbedonebetter. It's That investment takes many forms.Itcouldbefront-line field success ofthecompany. who deliver ontheircommitment andare more invested inthe A more constructive culture produces more satisfiedemployees Discussions by crews aboutdoingjobssafelyandproductively helpsdrive collaboration, innovation andimproved performance. the company. They seethebig picture.” hasanimpact ontheoverallcomplacent. Everyone success of becoming muchmore constructive, butwe know we can’t be Electric President Greg Dudkin. show “Internal surveys we’re stepping upandbecominginvolved insolutions,”saidPPL “There are countless examplesofemployees atalllevels whoare and costmanagement. improved performanceinreliability, safety, customersatisfaction The company continuestobreak new ground andachieve customers. contributes toasuccessful company andmore satisfied see they are partofsomething biggerandknow theirwork In short,employees are engagedtoimprove thebusiness. They DELIVERING TODAY FOR A BRIGHTER TOMORROW

committed to nurturing a strong pipeline of talented employees from a diverse mix of educational and social backgrounds. We sup- port the principles of non-discrimination and equal opportunity. We foster an atmosphere that brings together talented individuals with a deep history in the energy industry and new ideas for improving the services we provide.

To support that commitment, all employees receive training on inclusion and diversity. Every new hire is required within the first six weeks of employment to complete compliance and diversity training.

In 2017, PPL Chairman Bill Spence signed onto the CEO Action for Diversity & Inclusion, the largest CEO-driven business commitment to advance diversity and inclusion in the workplace.

By signing on to this commitment, PPL joined more than 150 Laboratory Supervisor Tamara Powell analyzes water samples in the lab companies in the pledge to take action to cultivate a workplace at KU’s E.W. Brown Generating Station. where diverse perspectives and experiences are welcomed and Our people respected, where employees feel encouraged to discuss diversity and inclusion. PPL is supported by more than 12,500 talented employees, focused on providing gas and electricity safely and reliably at a reasonable PPL leaders meet regularly to identify and promote diversity cost to our customers. In turn, PPL is committed to providing initiatives and policies that help to achieve a diverse workforce employees with a diverse and engaging workplace, rich with and work environment. Additionally, PPL utilizes Business Resource opportunities that foster innovation and personal success. We’re Groups (BRG) to foster an environment of inclusion and provide an always looking for candidates whose core beliefs align with our opportunity for employees with common experiences and company values, such as a strong safety culture and a team perspectives to network and develop professionally. orientation. Candidates can expect a work environment built Throughout the year, BRG members organize employee “lunch and around our commitment to safety and our company’s fundamental learns” to educate fellow employees and build awareness on 12,512 values of customer focus, performance excellence, integrity and numerous topics, including diversity and inclusion topics. Members openness, corporate citizenship and diversity and engagement. EMPLOYEES are also actively involved in various cultural and community Inclusion and Diversity programs that enable them to extend their reach outside their 21.4% workplaces. BRG members have taught leadership skills to Girl WOMEN EMPLOYEES An environment where all employees feel included and valued Scouts, handed out first-aid kits to homeless veterans, run creates greater commitment and motivation, making PPL a 6.4% tech-focused summer camps for middle school girls and stronger company. For PPL to continue its growth and build on its sponsored job-shadowing opportunities for Latino high school MINORITY EMPLOYEES successes, we must be inclusive. The PPL family of companies is students.

53 FOSTER AN EXCEPTIONAL WORKPLACE

Workforce Planning

Although PPL has a relatively low turnover rate of 6.8 percent, the SUSTAINABILITY REPORT SUSTAINABILITY PPL 2017 company has a strong focus on planning for its future workforce.

Workforce planning enables PPL to:

- Forecast ebbs and flows in workforce requirements

- Determine the size and type of workforce required for future business success

- Identify and address talent gaps and plan for future talent needs

- Develop plans, sourcing strategies and tactics

Workforce planning results are integrated into the business planning process. 2017’s class of PPL interns.

A large portion of the PPL workforce is moving toward retirement. 13 different universities and had an average GPA of 3.59. PPL’s former co-op/intern students hired into full time positions (28 About 35 percent of the PPL workforce falls within the Baby intern program also serves as an excellent source of diversity. percent women, 5 percent minority). Relationships have Boomer generation, a demographic group that represents people Last year’s interns were 62 percent diverse (women and been established at several regional schools to help provide born between 1946 and 1964. This challenges the company to minorities). educational opportunities as well as fill the talent pipeline for the continually develop current employees while also building a organization. Students are not only provided real world work LG&E and KU have a robust co-op and internship program for strong pipeline of skilled workers for the future. PPL continues to experiences, but also are provided with opportunities to learn students pursuing both two- and four-year degrees. In 2017, there make efforts with the goal of attracting and retaining up-and- about different areas of the business and network with other were 181 students in the co-op/intern program (25 percent coming leaders with diverse skill sets. The company has also employees at all levels of the organization. women, 11 percent minority). Additionally, in 2017 there were 43 continued efforts to ensure workplaces are inclusive to PPL’s companies participate in many outreach activities to attract employees of all ages by incorporating generational diversity into a diverse group of talent. Career fairs, multicultural leadership the company’s new hire orientation programs. Generational Diversity conferences, university leadership summits, mock interviews, In an effort to attract top talent, PPL supports a robust internship resume reviews, panel discussions, career boot-camps, program that engages students in career-specific work networking events, affinity group sponsorships and dinners are experience, informational interviews, fun activities, exposure 16% 49% 35% part of ongoing efforts to maintain PPL’s position as an employer to PPL executives and community service. In 2017, PPL’s Under 30 30-50 yrs old Over 50 of choice. Pennsylvania operations hosted 24 interns who represented Updated as of 9/1/2018

54 DELIVERING TODAY FOR A BRIGHTER TOMORROW

Craft Trade Apprentice and Trainee Programs

PPL’s companies are taking a proactive approach to expanding the talent pool for positions that will be available in the next several years due to retirements. In addition to college co-op programs, our companies actively recruit and train trade craft workers.

For example, PPL Electric offers 12 apprenticeship programs for various lineworker positions and actively recruits from trade and technical schools throughout the company’s 29-county service territory in northeast and central Pennsylvania. The average apprentice program takes 4.5 years to complete.

In 2017, PPL Electric hired 10 apprentices and partnered with a local community college to establish a line work program that teaches 2017’s class of WPD apprentices. students electrical-, cable- and communications-related line work. The program has helped to fill a local void for workforce training and has been added to the state’s High Priority Occupation Training career paths that LG&E and KU offer while they obtain the degrees leadership, dedication, confidence and discipline. PPL has earned program list, allowing Pennsylvania residents who are eligible for that are required for many craft worker positions. The program a trusted reputation among the military community as a preferred Workforce Investment Act or Trade Adjustment Act funding to pay has expanded to include interns in 14 different areas of the employer. In the U.S., the company has received the coveted little or nothing for the course. company. Patriot Award recognizing its long-time support of military reservists. PPL has been recognized as a Military Friendly Employer In the U.K., more than 80 apprentices were hired in 2017. The core Strategic partnerships have been created at a number of schools by G.I. Jobs magazine. training takes a minimum of two years and includes positions for throughout Kentucky including Elizabethtown Community and overhead lineworkers, who work on the network that is supported Technical College, Bluegrass Community and Technical College, PPL has business resource groups for veterans across the by wooden poles or steel towers, jointers who work on the Jefferson Community and Technical College, Hazard Community company, which focus on the needs of veterans and their families. underground cable network and fitters who work on switches and and Technical College, and Ivy Tech. Recruitment efforts build Members participate in veteran outreach projects, mentoring of transformers in substations. awareness of the various career paths and opportunities within veterans, professional development and recruitment activities. LG&E and KU. In addition to craft apprentices, WPD also offers a structured In addition to allowing time off for active duty and for periodic training program for planning and design trainees. In 2017, WPD Since its inception, the program has expanded to include positions military training, the company also supports employees who are added 12 trainees for a total of 65 in the two-year program to in 14 different areas of the company, attracted students from 11 members of a military reserve organization in the following ways: develop skills in design and development of projects, including new different campuses, resulting in 20 full-time hires. supplies and asset replacement. In 2017 alone, through the focused efforts of the Recruitment • Paying the difference between the regular pay they would Coordinator, 37 Craft Worker Interns (5 percent women, have received, if they had worked, and their government pay LG&E and KU also have an active craft worker internship program. 10 percent veteran) were employed by the program and 14 were for a period of six months. The craft worker intern program was launched in March 2015 in hired into the full-time workforce. response to a growing demand for employees with technical • Providing additional time off to take care of personal affairs, knowledge and degrees in the LKE workforce. The program Military Veterans if necessary, before reporting for duty. focuses on recruiting the top student talent directly from the • Implementing retroactively any step and merit increases that community and technical colleges in and around the service area. As PPL develops its workforce planning strategy, the company were deferred during the leave of absence. Students are able to gain hands-on knowledge about the various recognizes that military veterans can offer desired qualities of

55 56 PPL 2017 SUSTAINABILITY REPORT www.pplweb.com/careers/life-at-ppl/ For information onbenefitspackagesatPPL’s companiesvisit and perspectives tobuilduponourstrong, value-based culture. looking forteammemberswhoembrace andfosternew ideas the overall success As we looktoward ofPPL. thefuture, PPLis environment thatencourages employees todirectly contributeto successfully powered PPLdecadeafterandfostersan Our commitmentandpartnershipwithouremployees has offerings forundergraduate andcertaingraduate degrees. development opportunities,includingtuitionreimbursement retirement program,voluntary andinternalexternal PPL offerscompetitive vacation time, acomprehensive and culture ofinclusionanddiversity. offers anexcellent benefitsprogram thatenrichesthecompany careers andcompetitiveIn additiontochallenging salaries,PPL Benefits FOSTER ANEXCEPTIONAL WORKPLACE County Generating Station. Francisco Maldonadoreview plansatTrimble HaleyEngineer Turner andOutageCoordinator Grant Phelps,Lead LG&E andKUCivilEngineer applied fortheaward, LG&E andKUranked 26 wellness programming. Ofthemore than5,000 employers who their commitmenttoemployee healthandexceptional corporate by Springbukin2017. Thewinningorganizations were honored for recognized asoneofthe100healthiestworkplaces inthecountry earned anumberofaccoladesin2017. LG&E andKUwere programs, andon-siteexercise andhealthy-eating programs, shots, healthfairsandscreenings, matchinggrants forwellness shows. Thecompanies’ wellness offerings,whichincludeflu LG&E andKUgotheextra miletohelptheiremployees, andit happier, healthierlives. programs andactivities tosupportitsemployees’ pursuitof PPL values thewell-being ofemployees andoffersseveral Health andWellness Southern GasAssociation withtheHumanitarian Life-Saving and TimBowles, prover, GasMeter Shopwere recognized by the defibrillator (AED)use. In2017, TinaRevak, meter associate II, resuscitation (CPR)andautomatedexternal pulmonary LG&E andKUalsoroutinely train employees infirstaid,cardio- th . and supportsystems like theEmployee Assistance Program. take advantage ofthecompany’s discounted gym memberships cardiovascular healthwere given. Employees were encouraged to Presentations onawiderange oftopics,includingmentaland WPD hostedaweek-long healthprogram foremployees in2017. index declinedby 1.1percent in2017. employees hasgonedown by 8.4percent andthatbodymass Those assessments have shown thatthebodyfatindexof Assessments ofemployees’ healthhave shown positive trends. common insidePPLbuildingsacross thePennsylvania territory. Daily stretching amonglarge groups ofemployees hasbeen loss, eatinghealthierandusingproper ergonomics onthejob. injuries amongworkers andprovide guidanceonexercise, weight employees. Theathletic trainers have helpedreduce softtissue Athletics, whichprovides toPPL awide-range ofservices and fitness expertiseofathletic trainers from Occupational Pennsylvania employees have beenbenefittingfrom thehealth coordinated efforts. Award forsaving thelifeoftheirco-worker withtheir DELIVERING TODAY FOR A BRIGHTER TOMORROW

Training

PPL’s operating companies are committed to creating a workplace atmosphere that rewards performance and encourages professional development. In 2017, PPL employees participated in more than 570,000 hours of training, an average of 46 hours annually per employee. Beyond occupational training, the company offers personal skills, professional and leadership training courses. Programs cover a broad range of topics including but not limited to, business topics, effective communications, conflict resolution, personal awareness, effective leadership and 570,488 situational leadership. TOTAL TRAINING HOURS LG&E and KU provide valuable skill-development opportunities for all employees aspiring to grow in the company. New in 2017, the company emphasized succession development to support the 46 growth and development of all employees, along with helping AVERAGE HOURS PER EMPLOYEE leaders understand the importance of conversations that help the employee feel engaged and valued. Twelve competency-based development programs and five nomination-based programs are offered through the company’s Talent Management group. In 2017, To prepare employees for leadership roles, new supervisors are more than 1,600 employees participated in these programs. The provided with up to four weeks of training on topics such as company also offers a formal mentoring program that enables diverse thinking, coaching, leadership and accountability. PPL high-potential employees to gain insight and guidance from senior Electric also offers craft worker and lineworker development leadership and a mentoring program that pairs engineers who are programs to help its employees enhance and further their skill just starting their careers with more experienced engineers and sets. managers. To provide managers across the company with the skills they need PPL Electric provides classroom and computer-based training to manage and motivate their teams, WPD organized a three-day programs to improve employee skills in performing their jobs and leadership course for managers that covered topics such as to enable them to prepare for advancement opportunities. In 2017, communication methods, individual leadership style and conflict PPL Electric offered more than 600 learning courses for its management. In 2017, more than 240 employees participated in the employees. program. LG&E and KU Manager of Capital Projects Joan Lipp and Project Coordinator James Withrow work on a bridge construction project at Trimble County Generating Station.

57 58 PPL 2017 SUSTAINABILITY REPORT FOSTER ANEXCEPTIONAL WORKPLACE a gas trouble technician who serves intheIndianaNationalGuard.a gastrouble technician whoserves exemplifying thiscommitmentthrough hissupportofCraig Evans, Employer PatriotAward SupportoftheGuard andReserve for recently received U.S. theprestigious DepartmentofDefense’s Hollis Bridgewater (right),teamleader –GasDistributionforLG&E, employees intheKentucky NationalGuard andReserve. serving Department’s higheststate-level award for providing supportto receive ESGR’s Pro PatriaAward, theUnitedStatesDefense The company isalsooneofonlytwo organizations initsarea to received atotaloffive otherPatriot Awards between 2015and2017. In additiontoBridgewater’s honor, LG&E andKUemployees have everyone elsetodoso, too.” That’s why Idoeverything IcantosupportCraig andencourage the Guard whenyou don’t have thelevel ofsupportwe provide today. “This award nice,” isvery hesaid.“ButIknow how hard itistobein employers. personnelandveteransservice stillneedsupportfrom their attendees attheaward ceremony thatmany Americanmilitary In acceptingtheaward, veteran, Bridgewater, amilitary reminded and granting leaves ofabsence ifneeded. schedules, timeoffpriortoandafterdeployment, caringforfamilies, citizen warriors through awiderange ofmeasures includingflexible ThePatriotAwardthe military. reflects the efforts madetosupport whoiscommittedtoassistingmanager orsupervisor anindividualin The PatriotAward ispresented by theDepartmentofDefense toa the sixthLG&E andKUemployee toreceive theaward. intheIndianaNationalGuard. Bridgewatertechnician whoserves was ing thiscommitmentthrough hissupportofCraig Evans, agastrouble (ESGR)PatriotAwardSupport oftheGuard andReserve forexemplify received U.S. theprestigious DepartmentofDefense’s Employer Hollis Bridgewater, teamleader- LG&E GasDistribution, recently company’s workforce. andtohelptransition veteranssupport oftheirservice intothe It’s membersseeLG&E alsowhatGuard andKUdoingin andReserve membersdoingevery dayGuard andReserve insupportofthenation. ​​​​“Going above andbeyond.” That’s whatAmericansseeU.S. National personnelto military Strong commitment - DELIVERING TODAY FOR A BRIGHTER TOMORROW Strengthen communities Empower the success of future generations by helping to build strong communities today Helping communities – near and far Crews from PPL’s operating utilities are often called to help restore power in other regions, and under their mutual assistance agreements, can call in help from other utilities when it is needed.

In 2017, the call for help came often after numerous devastating storms hit Texas, Florida, Puerto Rico and Ireland.

More than 850 PPL Electric employees and contractors traveled to Florida to help restore electricity to nearly 8 million customers who lost power when Hurricane Irma and its 100-mph winds made its way through the Sunshine State.

LG&E and KU sent more than 400 employees and contractors and 37 company trucks to aid Duke Energy Florida, Florida Power & Light and Tampa Electric. Weeks earlier, LG&E and KU provided assistance to Texas following Hurricane Harvey.

In the U.K., WPD crews provided aid to Ireland in the wake of ex-Hurricane Ophelia.

The storm hit the southern coast of Ireland in October with winds in excess of 80 miles per hour. The storm caused severe damage to electricity network infrastructure and resulted in more than

Crews from PPL Electric, LG&E and KU worked together to help restore power after Hurricane Maria in the hard hit region of Caguas, Puerto Rico. 360,000 properties losing power. In total, 37 WPD linemen and engineers travelled to Ireland to help restore power supplies and repair electricity infrastructure.

The assistance didn’t end with the hurricane season. In January 2018, PPL Electric, LG&E and KU sent crews, line trucks and equipment for a long-term relief effort in Puerto Rico to help restore power knocked out by Hurricane Maria. Despite challenging work conditions, the crews rebuilt lines and restored power to customers in the Caguas area as part of a massive mutual assistance effort.

59 60 PPL 2017 SUSTAINABILITY REPORT nonprofits in2017 recognition ofemployee volunteer efforts. initiative. Collectively, PPL’s companiescontributed nearly$94,000 to WPD supportsemployees’ efforts through thePoundfor contributions fororganizations where they volunteer. IntheU.K., programs inDollarsforDoers,where employees canearncompany initiatives. IntheU.S., PPLElectric, LG&E andKUhave similar These efforts are recognized by thecompany through various volunteered more than69,000 hours. to ourneighbors,schoolsandtheenvironment. In2017, employees communities. Ouremployees are anextensionofourcommitment PPL encourages employees tovolunteer theirtimeinlocal projects, toleadscouttroops andtocoachyouth sportsteams. to cleanupchildren’s centers,tohelpstudentswithsciencefair areas. They alsotakethroughout anactive ourservice role –helping Employees ontheboards ofhundreds oforganizations serve employees are known fortheirdedicationtothecommunity. Whether they hailfrom theU.K., KentuckyorPennsylvania, PPL brighter future. business, andit’s ourway ofkeeping ourpromise tosupporta to invest ourtimeandresources inourcommunities.It’s how we do communities where we live andwork. We continuallyseeknew ways We proudly partnerwithmany nonprofit organizations inthe Volunteering in whichwe live, work andserve. volunteerism ofouremployees allow ustoimprove thecommunities citizenship. Ourphilanthropic contributionsandthededicated good neighborthrough along-standingcommitmenttocorporate PPL goesbeyond itscore business by focusingitsenergy onbeinga future workforce strengthens communities. revitalize neighborhoodsandfosteringthedevelopment ofthe community. Supportinginnovative educationprograms, helpingto role, butweour primary know there are otherways toempower a Delivering power safely, reliably andaffordably toourcustomersis Dedicated community partners STRENGTHEN COMMUNITIES In Pennsylvania, thePPLFoundation hascontributedmore than organizations totaledmore than$10millionin2017. environmental stewardship. PPL’s contributionstocharitable areas of education, communityandeconomicdevelopment, and withemphasisonthe quality oflifeinthecommunitieswe serve We partnerwithnonprofit organizations working toimprove the Philanthropy served by PPLElectric.served nonprofit organizations throughout the29countiesinPennsylvania In 2017, thePPLFoundation provided grants tomore than100 revitalization andworkforce development. the communitythrough initiatives focusedoneducation, community to qualifiednonprofit organizations (501(c)(3)) workingtoimprove Funded solely by PPL Corporation, the PPL Foundation awards grants central Pennsylvania sinceitsinceptionin2015. $6 milliontoawidevariety ofnonprofit organizations innorthand NUMBER OF EMPLOYEE VOLUNTEER HOURS TOTAL CHARITABLE GIVING 69,000 $10M

potential business relocations andexpansions. associationsconsultants, real estatedevelopers andindustry on works with state, partners, site countyandlocalofficials, regional The company’s economic development andmajoraccountsteam businessrecognized asanexemplary attraction tool. redevelopment area –continuestobe initiatives withintheservice expansions,new project locationsand rate forexistingindustry example, LG&E andKU’s Economic Development Rider–anincentive We provide incentives tosupporteconomicdevelopment efforts. For economic development organizations. business organizations, suchastheChamberofCommerce and PPL’s subsidiariesanditsexecutives are actively involved in economy, are describedon PPL’s infrastructure investments, whichbenefitthepublicandlocal create jobsforourcommunities. reasonable cost,isvitaltoattracting andretaining businesses that enhancement andconstruction ofutilityinfrastructure, ata bright future forthecommunitieswe We serve. understand well-being ispartoftheway PPL’s companieswork toprovide a Mapping outlong-termenergy plansthatcontributetoeconomic Powering LocalEconomies more than 300nonprofit organizations inthecommunities we serve. Collectively, thecompany’s employee-giving campaignshelpsupport more than $2millionincontributions. the employee campaigninKentucky–Power giving ofOne–raised Coupled withfinancialsupportfrom the LG&E andKU Foundation, than $2million, includingacorporate matchofemployee donations. Pennsylvania. In2017, toUnitedWay giving inPennsylvania was more We are active supportersofUnitedWay inKentuckyand contributions. in timeandmonetary Additionally, PPL’s employees make meaningfulcontributions–both page 41 .

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Disaster Readiness and recovery from internal or external disasters. This plan provides organization in developing emergency processes and procedures guidance for the corporation’s role in supporting the National associated with the 2017 solar eclipse that could be viewed in We work closely with public safety and emergency preparedness Infrastructure Protection Plan and National Response Framework. totality in KU’s western Kentucky service territory. organizations to coordinate responses to all hazardous events. The plan outlines the corporation’s processes for dealing with an PPL Electric developed, exercised, and strengthened response To help restore electric service to communities after catastrophic all-hazards approach to an actual or perceived disaster. The plans for black sky events, which may challenge our ability to emergencies or significant natural events, 28 U.S. utilities — all-hazards nature allows PPL Corporation to remain compliant operate for an extended period of time. Throughout the year, including PPL Electric, LG&E and KU ­— committed to participate in with NERC and the electric sector with regard to natural disasters, PPL Electric conducted numerous drill exercises to ensure the Regional Equipment Sharing for Transmission Outage terrorism, sabotage, cyber-attacks, and other criminal activity preparedness for many types of events including participation in Restoration (RESTORE) program, which establishes a proactive posing a risk to the organization. GridEx IV (see page 42). approach to providing critical equipment for utilities that need additional resources during disaster recovery. All domestic business lines and support service groups are Emergency Planning with WPD focuses on three main topics: Major required to develop and maintain a written business continuity Supply restoration; Disaster Recovery for Control and Contact The national importance of a strategic transformer reserve has plan that documents, maintains, and tests procedures for Centre; and Recovery from Total System Shutdown. been highlighted by the Department of Energy’s Strategic preparedness/initial response, business continuity and recovery Transformer Reserve Report to Congress earlier this year. Newly from emergencies. The vast majority of major supply interruption events are weather formed at the time of that DOE Report, the RESTORE program is related, and mainly caused by wind storms, although occasionally now a fully functional collaborative effort that takes advantage of PPL Corporate Security will conduct and/or review a hazard snow and heavy rain are also contributory causes. Planning for regional cooperation and is consistent with DOE’s recommendation vulnerability analysis on an annual basis to evaluate natural, these events starts with good weather forecasting, and across the supporting voluntary industry-based options to address the reserve. man-made, technological, and hazardous materials risks and WPD business, daily weather forecasts looking ten days ahead are vulnerabilities. provided to managers. RESTORE was founded in 2016 by LG&E and KU, PPL Electric, Tennessee Valley Authority (TVA) and Southern Company to identify PPL business lines maintain policies and procedures for To support disaster recovery, WPD maintains a network of Control and share spare transformers and other transmission equipment, responding to a variety of emergencies as required by regulatory and Contact centers that allow redeployment of personnel in the which will then be available for purchase by other participants in agencies. An Executive Crisis Team is maintained at the corporate event of a failure. These Disaster Recovery Centers provide the event of a major disaster within their service area. level and, when activated: reviews the appropriateness of the services throughout the WPD territory and are exercised regularly response and recovery effort and ensures adherence to the plan throughout the year to maintain confidence in the facility. RESTORE is designed to enhance the resilience and reliability of during an event; and, ensures that the appropriate corporate the power grid and provide additional sources for utilities seeking resources are being deployed to a response and recovery effort, Working in conjunction with the U.K. Government, National Grid, critical equipment during disaster recovery and does not replace including those necessary to safeguard protection of the public and Power Station Operations, WPD maintains a process to restore existing programs or agreements already in place. The RESTORE and the environment. supplies in the event of a total shutdown of the U.K. electricity agreement is now in place among all participating utilities, except a network or major parts of the U.K. These plans are regularly tested few that must first obtain state approval to execute the agreement. Some examples of emergency planning in 2017 include: through drills and simulations.

Emergency Preparedness and Management In Kentucky and Virginia, LG&E and KU partnered with state and local emergency management organizations as well as Homeland PPL Corporation’s Board of Directors has authorized the Corporate Security on disaster preparedness for large-scale power Leadership Council to establish an Emergency Management Plan. interruptions that impact residents in the commonwealths. LG&E This plan is based on an annual hazard vulnerability and risk and KU were active in working with FEMA and Homeland Security analysis and is a summary of the prevention, mitigation, on emergency preparedness related to the Louisville Levee preparedness, response, continuity of essential functions, and Regional Resiliency Assessment Program and the New Madrid recovery activities that serve as the comprehensive integrated Seismic Zone response and recovery plan workgroup. LG&E and approach to establishing and maintaining an effective response to KU also worked with the Kentucky Emergency Management

61 62 PPL 2017 SUSTAINABILITY REPORT STRENGTHEN COMMUNITIES network inthecentercityarea. to revitalize thedowntown by sponsoringthenew arena andstrengthening thepower Pa., sincethecompany’s foundingin1920.PPLhasdirectly supportedrecent efforts PPL’s headquarters,seeninthedistance, hasbeenaconsistentpresence inAllentown, that willwithstand thetestsoftimeandchange.” entries standout.They represent thetypeofdevelopment neighborhood contextwere amongthefactors makingthese “The attentionpaidtoproject detail, flexibledesign, and livability ofthecommunitiesinwhichthey are located. urban development thatisaddingtothesustainability and projects demonstrate “a thoughtful,innovative approach to Wendy Rowden, chairmanoftheawards saidthechosen jury, downtown neighborhoods. choose tobuyahomeorrent anapartmentincertain PPL alsooffersfinancialincentives toemployees who downtown demand. stronger, more flexibleandmore increased ready toserve in itsnetwork incenter-city Allentown, makingthegrid PPL Electric hasalsosupportedredevelopment by investing Allentown by purchasing thenamingrightstoPPLCenter. PPL Corporation directly supportedtherebirth ofdowntown residential space. project includesnew andremodeled office, retail and In additiontothenew arena, theongoingrevitalization New York, Singapore, Toronto andVancouver. finalists includehigh-visibility projects inChicago, Houston, Allentown’s downtown project isingoodcompany: Other Institute’s 2017GlobalAwards forExcellence. developments” selected aswinnersfortheUrbanLand the PPLCenter multi-usearena, isoneof13“extraordinary Allentown’s redevelopment project, includingconstruction of international award program. headquarters city, hasearnedrecognition inaprestigious The revitalization ofdowntown Allentown, PPLCorporation’s receives recognition Revitalization program DELIVERING TODAY FOR A BRIGHTER TOMORROW GRI index

SPECIFIC STANDARD DISCLOSURES PPL Corporation is committed to reporting on our sustainability performance annually, using the Global Reporting Initiative (GRI-G4) Sustainability Reporting Framework with the Electric Utilities Sector Supplement. This index details where specific GRI indicators appear in this report or in other publicly available filings or posting to PPL’s website.

G4 GRI Description Response Indicator Standards

STRATEGY AND ANALYSIS

G4-1 102-14 Statement from the most senior decision-maker of the organization For a message from our chairman, president and CEO, see page 2.

G4-2 102-15 Description of key impacts, risks and opportunities For a message from our chairman, president and CEO, see page 2.

ORGANIZATIONAL PROFILE

G4-3 102-1 Name of the organization PPL Corporation

Headquartered in Allentown, Pa., PPL Corporation is one of the largest companies in the U.S. utility sector. PPL's high-performing, award-winning utilities -- Western Power Distribution (East Midlands) plc, Western Power Distribu- tion (South Wales) plc, Western Power Distribution (South West) plc and Western Power Distribution (West Midlands) G4-4 102-2 Primary brands, products, and/or services plc (together, WPD), Louisville Gas and Electric Company (LG&E), Kentucky Utilities Company (KU) and PPL Electric Utilities Corporation (PPL Electric) -- provide an outstanding service experience for our 10.5 million customers, consistently ranking among the best in the United States and United Kingdom.

G4-5 102-3 Location of organization's headquarters Allentown, Pa.

Number of countries where the organization operates, and names of countries with either major operations G4-6 102-4 PPL operates utilities in the United States and the United Kingdom. or that are specifically relevant to the sustainability issues covered in the report

G4-7 102-5 Nature of ownership and legal form PPL Corporation is a publicly traded utility holding company.

G4-8 102-6 Markets served (including geographic breakdown, sectors served and types of customers/beneficiaries) For information on the markets we serve, see page 3.

G4-9 102-7 Scale of the reporting organization See At a Glance on page 4. More detailed information can be found in PPL's 2017 Form 10-K.

G4-10 102-8 Total workforce by employment type, employment contract and region, broken down by gender PPL has 12,512 employees. For more details on employees, see page 53.

G4-11 102-41 Percentage of employees covered by collective bargaining agreements As of the end of 2017, 49% of our employees were covered by collective bargaining agreements.

G4-12 102-9 Describe the organization’s supply chain See Supply Chain on page 14.

G4-13 102-10 Significant changes during the reporting period regarding size, structure or ownership There were no significant changes during the reporting period.

G4-14 102-11 Explanation of whether and how the precautionary approach or principle is addressed by the organization See Governance on page 15.

List externally developed economic, environmental and social charters, principles or other initiatives to In 2017, PPL Chairman Bill Spence signed onto the CEO Action for Diversity & Inclusion, the largest CEO-driven G4-15 102-12 which the organization subscribes or which it endorses business commitment to advance diversity and inclusion in the workplace. Memberships in associations (such as industry associations) and/or national/international/advocacy PPL's operating utilities are members of various industry associations including the Electricity Power Research G4-16 102-13 organizations Institute and the Edison Electric Institute.

63 64 PPL 2017 SUSTAINABILITY REPORT G4-24 STAKEHOLDER ENGAGEMENT G4-31 G4-29 G4-23 G4-17 IDENTIFIED MATERIAL ASPECTS ANDBOUNDARIES G4-20 G4-19 G4-33 G4-32 G4-30 G4-28 REPORT PROFILE G4-27 G4-26 G4-25 G4-22 G4-21 Indicator G4 G4-18 102-40 102-53 102-51 102-49 102-45 103-1 102-47 102-56 102-55 102-52 102-50 102-44 102-43 102-42 102-48 103-1 Standards GRI 102-46 List ofstakeholder groups engagedby theorganization Contact pointforquestionsregarding thereport oritscontents Date ofmostrecent previous report (ifany) Report significantchangesfrom previous reporting periods inscopeandaspect boundaries List allentitiesincludedintheorganization's consolidatedfinancialstatementsorequivalent documents. For withintheorganization eachmaterialaspect, report theaspect boundary List allthematerialaspects identifiedintheprocess fordefining reportcontent Policy andcurrent practice withregard toseeking externalassurance forthisreport Table identifyingthelocationofstandard disclosures inthereport Reporting cycle (annual,biennial,etc.) Reporting period(e.g., fiscal/calendar year) forinformationprovided has responded tothosekey topicsandconcerns,includingthrough itsreporting Key topicsandconcernsthathave beenraised through stakeholder engagement,andhow theorganization group Approaches tostakeholder engagement,includingfrequency ofengagementby typeandby stakeholder Basis foridentificationandselection ofstakeholders withwhomtoengage restatements Report theeffect ofany restatements ofinformationprovided inprevious reports, andthereasons forsuch For outsidethe organization eachmaterialaspect, report theaspect boundary Description Process fordefining report content There were nosignificantchangesfrom theprevious reporting period. External assurances forthisreport have notbeenconducted. PPL prepares thisreport annually. This report focusesoncalendaryear 2017. PPL hadnosignificant restatements to report in2017. Response For informationabouthow materialaspects were determined, seepage10. For informationabouthow materialaspects were determined, seepage10. For alistingofsignificantsubsidiaries,seeExhibit 21 ofPPL's 2018Form 10-K PPL Corporation's operating companiesare WPD utilitysubsidiary Disclosures onpage63. are includedintheGRIIndexofthisreport, beginning Questions andcommentsaboutthisreport canbedirected [email protected]. PPL's lastCorporate SustainabilityReportwas publishedinMay 2017. Itfocusedoncalendaryear 2016. For more informationonstakeholder engagement,seepage49. events. For more informationonstakeholder engagement,seepage49 . PPL iscommittedtokeeping ourstakeholders informedthrough various formalandinformalgroups, forumsand For more informationonstakeholder engagement,seepage49. professionals andgovernment. inacademia, industry For more infomationonstakeholder engagement,seepage49. investors, employees, retirees, laborunions,contractors andothersinoursupplychainaswell asvarious PPL engageswithavariety ofstakeholder groups, includingcustomers,communitygroups, shareholders, potential For informationabouthow materialaspects were determined, seepage10. For informationabouthow materialaspects were determined, seepage10. , LG&E, KUandPPLElectric . . DELIVERING TODAY FOR A BRIGHTER TOMORROW

G4 GRI Description Response Indicator Standards

GOVERNANCE

PPL Corporation’s corporate governance structure is posted online on the corporate website at G4-34 102-18 Report the governance structure of the organization, including committees of the highest governance body www.pplweb.com/governance. For more information on corporate governance, see page 15 of this report, and pages 12-16 of PPL's 2018 Proxy Statement.

The Board has designated its Compensation, Governance and Nominating Committee (CGNC) as the body responsible Report the process for delegating authority for economic, environmental and social topics from the highest G4-35 102-19 for overseeing PPL’s practices and positions to further its corporate citizenship, including sustainability, environ- governance body to senior executives and other employees mental and corporate social responsibility initiatives. The Board has designated its CGNC as the body responsible for overseeing PPL’s practices and positions to further Report whether the organization has appointed an executive-level position or positions with responsibility its corporate citizenship, including sustainability, environmental and corporate social responsibility initiatives. PPL's G4-36 102-20 for economic, environmental and social topics, and whether post holders report directly to the highest Public Affairs and Sustainability Vice President is the executive level position responsible for economic, environmen- governance body tal and social topics, reporting to senior leadership and presenting to the CGNC and the full board. Anyone wishing to make their concerns known to PPL’s Board or independent directors may contact the PPL lead director, currently John W. Conway, or the Board or the independent directors as a group, by writing to such person Report processes for consultation between stakeholders and the highest governance body on economic, or persons in care of the Corporate Secretary’s Office at: PPL Corporation, 2 N. Ninth St., GENTW4, Allentown, PA G4-37 102-21 environmental and social topics. If consultation is delegated, describe to whom and any feedback processes 18101. Senior management and certain directors meet regularly with investors to discuss matters of interest to to the highest governance body shareowners, such as financial performance, strategic direction, corporate governance, executive compensation, environmental and social topics.

G4-38 102-22 Composition of highest governing body Information regarding our Board of Directors is available on pages 4-9 of PPL's 2018 Proxy Statement.

G4-39 102-23 Is chair of highest body also an executive officer? Yes. See Board Leadership Structure on pages 10-11 of PPL's 2018 Proxy Statement.

G4-40 102-24 Report the nomination and selection processes for highest governance body members See Director Nomination Process on pages 14-15 of PPL's 2018 Proxy Statement.

The Board of Directors determines the independence of each director before the director joins the board and on an G4-41 102-25 Report processes for the highest governance body to ensure conflicts of interest are avoided annual basis thereafter. Disclosure of other board memberships and PPL's policy on related-person transactions, together with any disclosures, are included each year in the annual proxy statement. Report the highest governance body's and senior executives' roles in the development, approval, and The Board has designated its CGNC as the body responsible for overseeing PPL’s practices and positions to further G4-42 102-26 updating of the organization's purpose, value or mission statements, strategies, policies and goals related to its corporate citizenship, including sustainability, environmental and corporate social responsibility initiatives. economic, environmental and social impacts Report the measures taken to enhance the board's collective knowledge of economic, environmental and G4-43 102-27 See Governance on page 15. social topics Report the process for evaluation of the highest governance body's performance with respect to governance of economic, environmental and social topics. Report whether such evaluation is independent or not and its G4-44 102-28 frequency. Report whether such evaluation is a self-assessment. Report actions taken in response to evalu- See Board and Committee Evaluations on page 11 of PPL's 2018 Proxy Statement. ation of the highest governance body's performance with respect to governance of economic, environmental and social topics, including, at a minimum, changes in membership and organizational practices Report the highest governance body's role in the identification and management of economic, G4-45 102-29 See Governance on page 15 and The Board's Role in Risk Oversight on page 17 of PPL's 2018 Proxy Statement. environmental and social impacts, risks and opportunities

Report the highest governance body's role in reviewing the effectiveness of the organization's risk G4-46 102-30 See Governance on page 15 and The Board's Role in Risk Oversight on page 17 of PPL's 2018 Proxy Statement. management processes for economic, environmental and social topics Report the frequency of the highest governance body's review of economic, environmental and social G4-47 102-31 See Governance on page 15. impacts, risks and opportunities

Report the highest committee or position that formally reviews and approves the organization's G4-48 102-32 Senior executive leaders review and approve sustainability reports as appropriate. sustainability report and ensures that all material aspects are covered

65 66 PPL 2017 SUSTAINABILITY REPORT GRI INDEX G4-EC7 INDIRECT ECONOMICIMPACTS G4-EC6 G4-49 ETHICS ANDINTEGRITY G4-EC5 PRESENCE MARKET G4-53 G4-52 G4-51 G4-EC9 G4-EC8 G4-EC1 PERFORMANCE ECONOMIC G4-58 G4-57 G4-56 G4-EC2 Indicator G4 G4-EC4 G4-EC3 203-1 202-2 102-33 202-1 102-37 102-36 102-34 204-1 203-2 201-1 with G4-57) (Combined 102-17 102-17 102-16 201-2 Standards GRI 201-4 201-3 Development supported andimpact ofinfrastructure investments andservices Proportion ofseniormanagementhired from thelocalcommunityatsignificantlocations ofoperations Process forcommunicatingcriticalconcernstothehighestgovernance body locations ofoperation Range ofratios ofstandard wage entry-level by gendercompared tolocalminimumwage atsignificant Report how stakeholder views are soughtfordetermining remuneration Process fordetermining remuneration includinguseofconsulting Remuneration policiesforthehighestgovernance bodyandseniorexecutives Proportion ofspendingonlocalsuppliersatsignificant locationsofoperations Significant indirect economicimpacts, includingtheextentofimpacts and governments sation, donationsandothercommunityinvestments, retained earnings,andpayments tocapitalproviders Direct economicvalue generated anddistributed,includingrevenues, operating costs,employee compen- ing mechanismsorhotlines and mattersrelated toorganizational integrity, suchasescalationthrough linemanagement,whistle-blow Report theinternalandexternalmechanismsforreporting concernsaboutunethical orunlawful behavior, related toorganizational integrity, suchashelplinesoradvice Report theinternalandexternalmechanismsforseekingadviceonethical andlawful behavior andmatters and codesofethics Describe theorganization's values, principles,standards andnormsofbehavior, suchascodesofconduct change Financial implicationsandotherrisks andopportunitiesfortheorganization's activities duetoclimate Description Significant financial assistance received from government Coverage oftheorganization's definedbenefitplanobligations - Hiring andpromotion isbasedonmerit,notwhether acandidateisfrom aparticularlocality. PPL Corporation hires allemployees, includinginterns,atarate significantlyabove minimum wage. Response None. found inPPL's 2018Proxy Statement(pages13-14and27-42). PPL’s process fordetermining compensationofitsdirectors andexecutives, includingtheuseofconsultants,canbe 18-19 fordirectors andpages24-46forexecutive officers). PPL’s approach tocompensationofitsdirectors andexecutives canbefoundinPPL's 2018Proxy Statement(pages See EthicsandIntegrityonpage16. See SupplyChainonpage14. See Strengthening Communities onpage59. See more aboutinfrastructure investments onpage41 . Please refer toPPL's 2017Form 10-K Please refer toPPL's 2017Form 10-K For. AdditionalfinancialinformationcanbefoundinPPL's 2017FinancialHighlights,seepage12 2017Form 10-K See EthicsandIntegrityonpage16. See EthicsandIntegrityonpage16. See EthicsandIntegrityonpage16. See page27ofPPL's 2018Proxy Statement. . . . DELIVERING TODAY FOR A BRIGHTER TOMORROW

G4 GRI Description Response Indicator Standards

ENVIRONMENTAL

ENERGY

Report the percentage of recycled input materials used to manufacture the organization's primary products Nearly all fuel used is virgin material because sufficient volumes of recycled fuels are not available. We continuously G4-EN2 302-2 and services investigate opportunities to incorporate recycled fuels in our operations.

G4-EN3 302-1 Energy consumption within the organization For information on energy consumption, see page 75.

G4-EN4 302-2 Energy consumption outside the organization For information on energy consumption, see page 75.

G4-EN5 302-3 Energy intensity For information on energy intensity, see page 76.

G4-EN6 302-4 Reduction of energy consumption For information on PPL's efforts to reduce energy consumption within our operations, see page 28.

G4-EN7 302-5 Reductions in energy requirements of products and services For information on programs that help customers save energy, see pages 37 and 46.

Consumptive water use at our facilities has decreased. In 2017, we used 75% less water for each megawatt-hour G4-EN8 303-1 Total water withdrawal by source generated than we did in 2013.

G4-EN9 303-2 Water sources significantly affected by withdrawal of water For information on PPL's approach to water management, see page 29.

G4-EN10 303-3 Percentage and total volume of water recycled and reused For information on PPL's approach to water management, see page 29.

Operational sites owned, leased, managed in or adjacent to protected areas and areas of high biodiversity G4-EN11 304-1 For information on PPL's approach to biodiversity, see page 34. value outside protected areas Description of significant impacts of activities, products and services on biodiversity in protected areas and G4-EN12 304-2 For information on PPL's approach to biodiversity, see page 34. areas of high biodiversity value outside protected areas

G4-EN13 304-3 Habitats protected or restored For information on PPL's approach to biodiversity, see page 34.

Total number of IUCN Red List species and national conservation lists species with habitats in areas affect- G4-EN14 304-4 For information on PPL's approach to biodiversity, see page 34. ed by operations, by level and extinction risk

EMISSIONS

G4-EN15 305-1 Direct greenhouse gas (GHG) emissions (Scope 1) For information on PPL's approach to emissions, see pages 30 and 76.

G4-EN16 305-2 Energy indirect greenhouse gas (GHG) emissions (Scope 2) For information on PPL's approach to emissions, see pages 30 and 76.

G4-EN17 305-3 Indirect greenhouse gas (GHG) emissions (Scope 3) For information on PPL's approach to emissions, see pages 30 and 76.

G4-EN18 305-4 Greenhouse gas (GHG) emissions intensity For information on PPL's approach to emissions, see pages 30 and 76.

G4-EN19 305-5 Reduction of greenhouse (GHG) emissions For information on PPL's approach to emissions, see pages 30 and 76.

G4-EN20 305-6 Emissions of ozone-depleting substances (ODS) This is not material to PPL.

67 68 PPL 2017 SUSTAINABILITY REPORT GRI INDEX G4-EN27 PRODUCTS ANDSERVICES G4-EN26 G4-LA1 EMPLOYMENT PRACTICES ANDDECENTSOCIAL -LABOR WORK G4-EN30 G4-EN21 EFFLUENTS ANDWASTE G4-EN25 G4-EN22 G4-LA3 G4-LA2 G4-EN33 G4-EN31 G4-EN29 COMPLIANCE Indicator G4 G4-EN24 G4-EN23 G4-EN32 SUPPLIER ENVIRONMENTAL ASSESSMENT N/A 306-5 401-1 N/A 305-7 306-4 306-1 401-3 401-2 308-2 N/A 307-1 Standards GRI 306-3 306-2 308-1 Extent ofimpact mitigationofenvironmental impacts ofproducts andservices affected by theorganization's discharges ofwater andrunoff Identity, size, protected statusandbiodiversity value ofwater bodiesandrelated habitatssignificantly G4-10 fordataonthisindicator Total numberandrates ofnew employee hires andemployee turnover by agegroup, genderandregion. See the organization's operations andtransportation oftheworkforce andothergoodsmaterialsfor Significant environmental impacts oftransporting products andservices NOx, SOx,andothersignificantairemissions Convention AnnexI,II,IIIandVIII,percentage oftransported waste shippedinternationally Weight of transported, imported,exportedortreated waste deemedhazardous underthetermsof theBasel Total water discharge by qualityanddestination Return towork andretention rates afterparental leave, by gender significant locationsofoperation Benefits provided tofull-timeemployees thatare notprovided orpart-timeemployees, totemporary by Significant actual and potentialnegative environmental impacts inthesupplychainandactions taken Total environmental protection expenditures andinvestments by type environmental laws andregulations sanctions fornon-compliancewith value ofsignificantfinesandtotalnumbernon-monetary Monetary Description Total numberandvolume ofsignificantspills Total weight ofwaste by typeanddisposalmethod Percentage ofnew suppliersthatwere screened usingenvironmental criteria aquatic speciesandtheenvironment. Discharges tolakes permits.Withouroperating practices, andrivers they are are by designedtoprotect regulatory borders. asthecompany'sThis isnotmaterialtoPPL, operations donottransport any hazardous waste across international resulting ina99%retention rate. A totalof310 employees usedparental leave. Atotalof308employees returned towork, PPL contractually requires supplieradherence toenvironmental termsandconditions. No significantfines(definedas more than$100,000). Response full compliancewithestablishedspillpolicies. PPL had15reportable spillswithatotalvolume of 6,459.55liters(non-PCBtransformer oil).Allspillswere cleanedin For informationonPPL's approach towaste management,seepages30and77 For informationonPPL's approach towater management,seepages29and77 For informationonPPL's approach toemissions, seepages30and76. For informationonbenefitsprovided toemployees, seepage56. For informationonPPL's workforce data, seepage53. 100% For informationonrecent andplanned expenditures, refer toPPL's 2017 Form 10-K For informationonPPL's efforts tominimizetheimpact oftheoperation's transportation fleet, seepages31 and38. For informationonPPL's environmental stewardship efforts, seepages27-39. . . . DELIVERING TODAY FOR A BRIGHTER TOMORROW

G4 GRI Description Response Indicator Standards

LABOR/MANAGEMENT RELATIONS

Minimum notice periods regarding operational changes, including whether these are specified in collective Notice periods vary by collective bargaining agreement. We comply with applicable laws, regulations and collective G4-LA4 402-1 agreements bargaining agreements.

OCCUPATIONAL HEALTH AND SAFETY

PPL has voluntary employee safety committees across the company in virtually every business unit that plan and Percentage of total workforce represented informal joint management-worker health and safety commit- G4-LA5 403-1 execute safety improvement activities. These committees, with representatives from first line and management, tees that help monitor and advise on occupational health and safety programs communicate safety messages to employees and hold regular safety meetings. Type of injury and rates of injury, occupational diseases, lost days and absenteeism, and total number of G4-LA6 403-2 For information on PPL's safety program, see page 22. work-related fatalities, by region and gender

G4-LA7 403-3 Workers with high incidence or high risk of diseases related to their occupation No high risks or incidents identified.

All collective bargaining agreements contain language that references the need for a strong health and safety G4-LA8 403-4 Health and safety topics covered in formal agreements with trade unions program and a joint health and safety advisory committee.

TRAINING AND EDUCATION

G4-LA9 404-1 Average hours of training per year per employee by gender and by employee category For information on professional development, see page 57.

Programs for skills management and lifelong learning that support the continued employability of employees G4-LA10 404-2 For information on professional development, see page 57. and assist them in managing career endings PPL's expectations are that all eligible employees receive an evaluation of their skills and performance on an annual Percentage of employees receiving regular performance and career development reviews, by gender and by G4-LA11 404-3 basis. The company's business units have formal performance appraisal processes that cover 100% of eligible employee category active, full-time and part-time employees.

DIVERSITY AND EQUAL OPPORTUNITY

Composition of governance bodies and breakdown of employees per employee category according to For information on diversity at PPL, see page 53. See also page 2 and pages 5-9 of PPL's 2018 Proxy Statement G4-LA12 405-1 gender, age group, minority group membership and other indicators of diversity for the diversity of its Board of directors.

EQUAL REMUNERATION FOR WOMEN AND MEN

Ratio of basic salary and remuneration of women to men by employee category, by significant locations of G4-LA13 405-2 PPL complies with all state, federal and local laws and regulations prohibiting discrimination. operations

LABOR PRACTICES GRIEVANCE MECHANISMS

PPL's Standards of Conduct and Integrity for Suppliers requires that all suppliers adhere to all applicable labor and G4-LA15 414-2 Significant actual and potential negative impacts for labor practices in the supply chain and actions taken human-rights laws. Number of grievances about labor practices filed, addressed and resolved through formal grievance This is not publicly disclosed information. The company follows procedures set forth in collective bargaining G4-LA16 103-2 mechanisms agreements.

69 70 PPL 2017 SUSTAINABILITY REPORT GRI INDEX G4-HR10 SUPPLIER ASSESSMENT HUMAN-RIGHTS G4-HR7 SECURITY PRACTICES G4-HR2 G4-HR4 FREEDOM OFASSOCIATION ANDCOLLECTIVEBARGAINING G4-HR6 FORCED ORCOMPULSORY LABOR G4-HR1 NONDISCRIMINATION RIGHTS SOCIAL -HUMAN G4-HR3 G4-SO1 LOCAL COMMUNITIES SOCIAL SOCIETY G4-HR11 G4-HR5 CHILD LABOR Indicator G4 414-1 410-1 412-2 407-1 409-1 412-3 406-1 413-1 414-2 408-1 Standards GRI Percentage ofnew suppliersthatwere screened usinghuman-rightscriteria relevant tooperations Percentage ofsecuritypersonneltrained inorganization's human-rightspoliciesorprocedures thatare rights thatare relevant tooperations, includingthepercentage ofemployees trained Total hoursofemployee training onhuman-rightspoliciesorprocedures, concerningaspects ofhuman bargaining may beviolatedoratsignificantrisk,andmeasures taken tosupporttheserights Operations andsuppliersidentifiedinwhichtherighttoexercise freedom ofassociation andcollective and measures to contributed to the elimination of all forms of forced or compulsory labor and measures tocontributedtheeliminationofallformsforced orcompulsory labor, Operations andsuppliersidentifiedashaving significantriskforincidentsofforced orcompulsory man-rights clauses or that underwent human-rightsscreening man-rights clausesorthatunderwent Total numberandpercentage ofsignificantinvestment agreements andcontracts thatincludehu- Total numberofincidentsdiscrimination andcorrective actions taken development programs Percentage ofoperations withimplementedlocalcommunityengagement,impact assessments and Significant actual and potentialnegative humanrightsimpacts inthesupplychainandactions taken taken tocontributetheeffective abolitionofchildlabor Operations andsuppliersidentifiedashaving significantriskforincidentsofchildlabor,andmeasures Description training programs onethics andconduct andcultural diversity administered by theiremployer. to workplace violenceevents atleastbi-annually. Allcontract securitypersonnelworking domesticallycomplete Additionally, alldomesticCorporate Securitypersonnelcomplete atraining program onindicatorsandresponse All domesticCorporate Securitypersonnelcomplete corporate standards ofintegritytraining onanannualbasis. None. We complywithapplicablelaws, rulesandregulations wherever we operate. PPL and its subsidiary companiesintheU.S.PPL anditssubsidiary andU.K. operate incompliancewithapplicablelaws andregulations. for reporting, investigating andresponding toallegationsofdiscrimination. This isnotpubliclydisclosedinformation. Company policiesprohibit discriminationandset fortharobust procedure None. We complywithapplicablelaws, rulesandregulations wherever we operate. Response nondiscrimination andcompliancewithlaws. All employees are trained onPPL's Standards ofIntegrity,whichincludestopicsonrespect intheworkplace, engagement, seepage60. 100% ofPPL's operations have programs forlocalcommunityengagement.For more informationoncommunity human rightslaws. PPL's Standards ofConduct andIntegrityforSuppliersrequires thatallsuppliersadhere toallapplicablelaborand human rightslaws. PPL's Standards ofConduct andIntegrityforSuppliersrequires thatallsuppliersadhere toallapplicablelaborand addressed inourStandards ofConduct andIntegrityforSuppliers. None. We complywithapplicablelaws, rulesandregulations wherever we operate. Freedom ofassociation isalso DELIVERING TODAY FOR A BRIGHTER TOMORROW

G4 GRI Description Response Indicator Standards

ANTI-CORRUPTION

Total number and percentage of operations assessed for risks related to corruption and the significant risks G4-SO3 205-1 All business units are subject to corruption risks analysis. identified All employees receive regular anti-corruption training as well as training on a variety of important policies and G4-SO4 205-2 Communication and training on anti-corruption policies and procedures procedures. PPL's Standards of Integrity, which highlights certain key policies and procedures, can be accessed online at any time.

G4-SO5 205-3 Confirmed incidents of corruption and actions taken None.

PUBLIC POLICY

G4-SO6 415-1 Total value of political contributions by country and recipient/beneficiary For information on PPL's public policy approach, see page 18.

ANTI-COMPETITIVE BEHAVIOR

Total number of legal actions for anti-competitive behavior, anti-trust and monopoly practices and their G4-SO7 206-1 None. outcomes.

COMPLIANCE

Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with G4-SO8 419-1 No significant fines (defined as greater than $100,000). laws and regulations

SOCIAL PRODUCT RESPONSIBILITY

CUSTOMER HEALTH AND SAFETY

Percentage of significant product and service categories for which health and safety impacts are assessed Electricity and natural gas can be dangerous if handled incorrectly. Safety programs are part of our ongoing opera- G4-PR1 416-1 for improvement tions. We have extensive training and safety education programs for customers, contractors and employees. Total number of incidents of non-compliance with regulations and voluntary codes concerning the health G4-PR2 416-2 PPL does not publicly disclose this information. and safety impacts of products and services during their life cycle, by type of outcome

PRODUCT AND SERVICE LABELING

Type of product and service information required by the organization's procedures for product and service Electric and natural gas service cannot be labeled. We provide regular and detailed safety information to customers G4-PR3 417-1 information and labeling, and percentage of significant product and service categories subject to such via bill inserts, public service announcements, presentations, social media and the company's websites. information requirements 102-43 and G4-PR5 Results of surveys measuring customer satisfaction For information on customer satisfaction, see page 45. 102-44

MARKETING COMMUNICATIONS

Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing G4-PR7 417-3 None. communications, including advertising, promotion and sponsorship, by type of outcomes

CUSTOMER PRIVACY

Total number of substantiated complaints regarding breaches of customer privacy and losses of customer G4-PR8 418-1 None. data Monetary value of significant fines for non-compliance with laws and regulations concerning the provision G4-PR9 419-1 Please refer to the PPL's 2017 Form 10-K. and use of products and services

71 72 PPL 2017 SUSTAINABILITY REPORT GRI INDEX EU2 EU1 SECTOR DISCLOSURES -ELECTRICUTILITIES Reliability ability & Avail- G4-DMA EU5 EU4 EU3 EU18 EU17 EU15 Workforce Skilled G4-DMA Indicator G4 EU13 EU12 EU11 agement Side Man- Demand G4-DMA EU10 opment & Devel- Research G4-DMA Standards GRI Net energy outputbroken down energy regime by primary source andregulatory Installed capacity, broken down energy regime by primary source andregulatory Description Management approach toensure short-andlong-termelectricity availability andreliability Allocation ofCO2emissions allowances, orequivalent, broken down by carbontrading framework Length ofabove andunderground transmission anddistribution Number ofresidential, industrial,institutionalandcommercial accounts training Percentage ofcontractor andsubcontractor employees whohave undergone relevant healthandsafety nance activities Days worked by contractor andsubcontractor employees involved inconstruction, operation andmainte- Percentage ofemployees toretire eligible innext5and10years, broken down andregion by jobcategory Programs andprocesses toensure theavailability ofaskilledworkforce Biodiversity ofoffset habitatscompared tothebiodiversity oftheaffected areas Transmission anddistributionlosses asapercentage oftotalenergy Average generation efficiency ofthermalplants byenergy regime source and regulatory programs Demand-side managementprograms includingresidential, commercial, institutionalandindustrial regime and regulatory Planned capacityagainstprojected electricity demand over thelongterm,broken down by energy source sustainable development Research anddevelopment activity andexpenditure aimedatproviding reliable electricity andpromoting LG&E andKU's installedcapacityis8,017 MW. Response None. See Infrastructure onpage40. For details onPPL's customers,seepage44. See AboutOurCompany onpage3. our electric systems. PPL provides required healthandsafety-related training for100%ofthecontractors performingphysical work on PPL doesnotpubliclydisclosethisinformation. ready andqualified workforce. For information ongenerational diversity andturnover rates, seepage54. PPL hasdeveloped workforce strategic planstoidentifykey functions andproactively implementplanstoassure a For informationonhow PPLisensuringtheavailability ofaskilledworkforce, seepage54. For informationonhabitat-protection efforts, seepage34. processes across theorganization. For more informationonresearch anddevelopment initiatives, seepage37 studies topilotdemonstrations. The informationsupportstheintegrated resource-planning andbusiness-planning scale energy tosupporttheintegrated grid. Theresearch storage andadvanced gridtechnologies spansfrom paper investigations ofadvanced fossil generation, flexibleplantoperations, distributedenergy resource integration, grid Research anddevelopment activities addressing short-andlong-termelectricity availability andreliability include see pages37 agencies.Forsubmitted toregulatory informationaboutdemand-sidemanagementprograms forcustomers, Where applicable, PPLaddresses plannedcapacityandprojected demandinintegrated resource plansthatare More informationisavailable inPPL's 2017Form 10-K PPL addresses availability andreliability agencies. inourintegrated resource plansthatare submittedtoregulatory This dataisnotcentrally tracked. In 2017, theaverage generation efficiency for LG&EandKU was10.1(MMBTU/Net MWh) providing a21.6% margin. reserve Forecast demandforLG&E andKUis6,807MW, andLG&E andKUgeneration capacityiscurrently 8,274MW, , 46and48. . . DELIVERING TODAY FOR A BRIGHTER TOMORROW

G4 GRI Description Response Indicator Standards At the watershed or hydrological basin level, include collaborative approaches to managing watersheds and reservoirs for multiple uses (e.g., irrigation, drinking water, ecosystem conservation, etc.). Also report long- G4-DMA term planning for securing water resources, for meeting the needs of both the utility and other stakeholders For information on PPL's approach to water conservation, see page 29. Water (e.g. local communities). This includes describing the criteria for managing maximum/minimum flow of surface water and volume of ground water and how these are determined and maintained. G4-DMA Vege- Report approaches for pest and vegetation management along transmission and distribution corridors (e.g., tation For information on our approach to vegetation management, see page 35. use of Integrated Pest Management and Integrated Vegetation Management) Manage- ment G4-DMA Local Stakeholder participation in decision making processes related to energy planning and infrastructure For information on stakeholder engagement, see page 49. Communi- development ties We avoid displacement of anyone to the extent feasible by careful planning during the siting process of major EU22 Number of people physically or economically displaced and compensation, broken down by type of product projects. If displacement is unavoidable, we make fair compensation for any property transactions. G4-DMA Emer- Contingency planning measures, disaster/emergency management plan and training programs, and recov- For information on PPL's disaster and emergency management planning, see page 61. gency ery/restoration plans Planning G4-DMA Customer Programs, including those in partnership with government, to improve or maintain access to electricity and For information on customer programs, see pages 43-51. Support customer support services. Programs

EU26 Percentage of population unserved in licensed distribution or service areas PPL's utilities have an obligation to serve all that want electrical service in their service territory.

Number of residential disconnections for non-payment, broken down by duration of disconnection and by EU27 In 2017, PPL's U.S.-based utilities had 160,794 residential disconnections. regulatory regime

EU28 Power outage frequency For information on reliability, see page 25.

EU29 Average power outage duration For information on reliability, see page 25.

LG&E's and KU's plant availability factor is 84.81%. The unplanned outage rate for LG&E and KU plants in 2017 was EU30 Average plant availability factor by energy source and by regulatory regime 7.59%, down from 8.39% in 2016. G4-DMA Practices to address language, cultural, low literacy and disability related to barriers to accessing and safely Customer For information on customer programs, see pages 43-51. using electricity and customer support services Access

73 74 PPL 2017 SUSTAINABILITY REPORT help provide thefinancingandtechnicalcapabilitiesneededtoachieve the UNSDGs. Forging aPathforBusiness intheUN 2030Development Agendainitiative, whichaimstopromote opportunityfortheprivate sector todrive progress toward sustainabledevelopment andact asapartnerto considered how they would supporttheUNSDGs intheirobjective toachieve abetter world forall.PPLalsoparticipatedintheUnitedStatesCouncil forInternationalBusiness’ (USCIB)Business for2030– As amultinationalbusiness, PPLunderstandswe have arole toplay incontributingtotheUnitedNationsSustainableDevelopment Goals (UNSDGs). As we developed ourown sustainabilitycommitments, we PPL’s contribution to theU.N. Sustainable Development Goals Development Goal Sustainable

PPL’s SustainabilityStrategy ment thatcreates jobsthroughout the territories we serve. We alsowork closelywithlocaland stateofficialstofostereconomic develop- professional development andenables employees toachieve theirfullpotential. inclusive, respectful anddiverse workplace thatrewards performance, promotes We are focusedoncultivating success forouremployees by fostering an our customers. on providing affordable, reliable, safeandenvironmentally responsible energy to stakeholders to have asustainableenvironmental impact. We alsoare focused responsible stewardshipEncouraging inpartnershipwithourcustomersand future. resilient andefficientgridthatfosterscontinued progress andacleanerenergy Investing in tomorrow’s energy infrastructure by developing amore reliable, areas whereecosystems theutilitiesoperate. thatdepend onthemintheservice waterways. Thecompany supportsprograms thatprotect waterways andthe the water itusesandmonitorstheimpact ofwaste water discharged into As partofourefforts toadvance acleanerenergy future, PPLcarefully manages programs toencourage energy efficiency. mental upgrades atPPLpower plants,carbon-free generation projects and promote aclean, safeandhealthy environment. We have invested inenviron- outallofourbusinesscommitment tocarry activities inways and thatpreserve We are working toadvance acleanerenergy future. PPLhasalongstanding What PPLisdoing ------Supporting theeconomic development ofthe communitieswe page62. serve, Fostering adiverse and inclusive workforce, page53. Nurturing thefuture workforce through apprenticeships andtraining programs, pages54-55. Developing aconstructive culture thatnurtures employee engagementandaccountability, page52. Providing tomeet theneedsofallourcustomers,page50. specialservices Conducting research anddevelopment toprepare thegridforelectric vehicles, page37 programs, pages37and46. Helping ourcustomersgogreen, saving money andenergy, through energy efficiency educationand LG&E andKUwere upgrading more aheadofthecurve, than500milesofnatural gaspipelines,page40. page 41. PPL Electric’s smartgridprogram isleadingtorecord-breaking reliability improvements forcustomers, efficiency onthegrid,page20. WPD isimplementingatransition toDistributionSystem Operator thatwilldrive performanceand Deploying innovative ways tocutwaste, page39. Reducing theuseofwater consumedandusedatpower plants, page29. emissions, page30. Investing in technology, upgrades andprojects thatreduce ourenergy consumptionand Working toexpandrenewable energy integration intothegrid,page27 Taking stepstomanageclimate-related risks, page36. . . DELIVERING TODAY FOR A BRIGHTER TOMORROW Appendix

Installed Capacity

Total Owned Nameplate Generation Total Net Summer Rating Coal Owned Nameplate Generation Natural Gas Owned Nameplate Renewable Owned Nameplate Year Capacity at end of year (MW)1 at end of year (MW) Capacity at end of year (MW)2 Generation Capacity at end of year (MW)3 Generation Capacity at end of year (MW)4

2013 9,174 8,079 6,583 2,477 113.4

2014 9,174 8,087 6,583 2,477 113.4

2015 9,148 7,997 5,750 3,284 113.4

2016 9,157 8,011 5,750 3,284 123

2017 9,183 8,017 5,754 3,285 144

1LGEKU Installed 2LGEKU Installed 3LGEKU Installed 4LGEKU Installed

Energy Consumption and Output

Percentage Change Small Plant Stationary Plant Mobile Fuel Organization Organization Organization Generation Generation Total BTU Generation Efficiency: YEAR in Generation (Subpart C) Combustion Combustion Building Electricity Building Gas Use Fleet Vehicle (MWh gross) (MWh net)2 Consumed at Plant (BTU/Net Generation) Efficiency Sources (Liters) Sources (Liters) Use (kWh) (kWh) Energy Use (Liters)

20131 37,706,347 34,329,844 389,289,544 11.3 5,934,934 * 1,882,854 * 101,880,013 * 100,920,048 * 18,712,396 *

2014 38,236,325 34,852,836 394,375,570 11.3 -0.21% 5,934,934 * 1,882,854 * 112,529,670 * 101,445,325 * 19,067,244 *

2015 36,937,034 33,880,343 371,360,145 11.0 -3.13% 5,934,934 * 1,882,854 * 113,735,235 * 101,156,024 * 18,392,459 *

2016 36,857,210 33,968,857 360,888,362 10.6 -3.07% 5,934,934 * 1,882,854 * 108,898,199 * 101,078,573 * 17,816,820 *

2017 35,759,848 32,704,879 330,071,507 10.1 -5.00% 5,934,934 1,882,854 116,693,279 101,227,880 17,919,631

1 2013 data does not include WPD Surf Telecom. 2 Net Generation data excludes OVEC. * Estimated data for Kentucky Operations.

75 76 PPL 2017 SUSTAINABILITY REPORT *Reporting beganin2015 *** 2010Scope1PlantEmissions istheonlydatapointthatincludesPPLEnergy Supply, LLC. ** Estimated dataforPennsylvania Operations. * Estimated dataforKentuckyOperations. 1 Year Emissions 5 4 3 2 1 Carbon Emissions andIntensity APPENDIX 2013 2014 2015 2016 2017 Net Generation dataexcludes OVEC Total CO Note:There isnotamaterialdifference intheconversion formulasutilizedinourU.K. Operations (DECC Conversion Factor) vs. ourKentuckyOperations (EIA's Conversion Factor). OurCO Total CO Net Generation dataexcludes OVEC. Goal Year 2013 2010 2015 2016 2014 2017 2 Goal includescolumnsidentifiedwithacheckmark. 2 2 2 e excluding Scope3purchased power/gas andgasoperations. e associated withgross generation dividedby net generation. 60,736,086*** (Gross MWh) 33,068,054 30,199,495 28,737,028 28,407,677 (Includes 33,212,770 and CH Tonnes of C0 Scope 1 Metric (MWh net) Generation 34,329,844 34,852,836 33,880,343 33,968,857 32,704,879 CO 2 3 , N 2 e 2 4 0 ): 1 Vehicles): 46,633* 50,469* 48,773* 49,727* 48,343* 1 (Fleet of CO Tonnes Scope 47,630 Metric 3 2 e (Metric Tonnes) Total NOxEmissions 30,874 31,644 22,365 18,380 15,710 Metric Tonnes not included Combustion Emissions): in Stack Sources Station- ary Fuelary Scope 1 of CO (Small 32,645 Plant 3,209 8,984 2,515 5,610 3,417 3 2 e Equipment) Tonnes of Scope 1 Mobile 4,893* 4,893* 4,893* 4,893* 4,893* (Plant Metric 4,893 CO 3 2 e Tonnes /Net MWh) Intensity (Metric Total NOxEmissions 0.00090 0.00091 0.00066 0.00054 0.00048 Operations): Tonnes of Scope 1 35,622 30,437 35,376 Metric 28,132 30,419 (Gas CO

2 e Distribution Substation Tonnes of (Electric 114,727** Scope 1 131,230 86,940 46,069 Metric 85,195 90,107 SF6): CO and 3 2 e Wholesale): (Purchased (Metric Tonnes) Total SO 66,897 70,697 40,075 16,398 13,499 1,906,442 530,829 482,359 Scope 2 520,845 456,118 619,191 Power Net of (MWh)

2 Emissions Power Net of Wholesale): (Purchased Tonnes of 1,597,157 395,828 Scope 2 558,092 387,968 451,533 470,110 Metric CO 3 2 e

Buildings): (Electric- ity Usein Tonnes of Scope 2 89,732* 70,472* 67,022* 71,687* 71,016* Metric 69,781 CO Tonnes /Net MWh) Intensity (Metric Total SO 0.00195 0.00203 0.00118 0.00048 0.00041 3 2 e 2 Emissions Tonnes of (Gas Use 18,325.6* in Build- 18,378.1* Scope 2 18,317.6* 18,311.1* 18,310.5 18,250* ings) Metric CO 3 2 e 4 : Customers): for EndUse (Electricity Purchased 15,980,340 9,082,309 8,949,034 9,134,536 9,272,725 9,100,894 Scope 3 (MWh)

Emissions) (Kg) Pollutants (Total HG Hazardous Air * * 230 70 77 Metric Tonnes Customers): for EndUse (Electricity Purchased 4,590,490 4,497,655 4,172,432 7,263,132 4,177,384 Scope 3 4,110,251 of CO

2 e Customers): for EndUse Purchased Scope 3 MMCUFT 44,546 44,835 40,656 43,287 49,079 46,516 (Gas

Emissions (Kg)/Net MWh) Intensity (Total HG Hazardous AirPollutants * * 6.79E-06 2.06E-06 2.35E-06 Customers): for EndUse Purchased Tonnes of 2,304,800 2,389,400 2,355,666 2,034,406 2,225,952 2,533,521 Scope 3 Metric (Gas CO

2 e Emissions: 30,796,883 29,083,085 33,909,091 Total Goal 62,577,296 29,515,412 33,614,771 Tonnes of Related Metric CO

2 e (in millions) USD Million $7,263 $7,852 $7,669 $7,447 Sales $7,517

(Metric Tonnes) Particulate Matter 3,874 4,209 4,168 2,634 1,900 Calculation Intensity Revenue) 0.00393 0.00463 0.00432 0.00402 Carbon 0.00391 (CO

2 e/ 1

(MWh Net) Generation 33,880,343 34,852,836 34,329,844 33,968,857 32,704,089

3 Calculation Generation Generation) (CO Intensity by MWh Carbon 0.85 0.89 0.96 0.95 0.87 2 e/Net

5

DELIVERING TODAY FOR A BRIGHTER TOMORROW

2017 Water Sources Affected by Withdrawal of Water

% Impact (Water Waterbody Size Consumption Total Volume of Water Recycled 2017 Withdrawal 2017 Discharge Plant Withdrawn compared Water body [Lake-megaliters] or [Megaliters/year] and Reused as a Percentage of [megaliters/year] [megaliters/year] to Waterbody Size) [River-megaliters/day] (Withdrawal - Discharge) Total Water Withdrawal

KU-Brown 21,796 0.018% 21,949 Herrington Lake (created by Dix River Dam) 324,405 * -153 *** 100.70%

KU-Ghent 104,296 0.26% 115,304 Ohio River 110,829 ** -11,008 *** 110.55%

LG&E-Cane Run 4,883 0.011% 1,336 Ohio River 119,882 ** 3,547 27.36%

LG&E-Mill Creek 325,205 0.74% 321,131 Ohio River 119,882 ** 4,074 98.75%

LG&E-Trimble County 38,766 0.1% 15,778 Ohio River 110,829 ** 22,988 40.70%

* Volume of lake during 10Q7 low flow conditions. ** Flow during 10Q7 low flow conditions. *** Discharge exceeds withdrawal due to rainfall.

Ash-Use Trends Waste

Ash-Use Trends: Production1 Ash-Use Trends: Generation Ash-Use Trends (Million Year Hazardous Waste3, 4 (Total Tonnes) Non-Hazardous Waste5 (Total Tonnes) Year (Million Metric Tonnes) Reuse1 (MWh net)2 Metric Tonnes / Net MWh) 2013 252.7 9,861.13 2013 1.489 22.0% 34,329,844 0.043 2014 347.68 11,329.87 2014 1.377 22.5% 34,852,836 0.040 2015 460.2 16,099.39 2015 1.231 25.7% 33,880,343 0.036 2016 743.97 136,124.63 2016 1.133 34.2% 33,968,857 0.033 2017 829.03 45,347.15 2017 1.010 34.1% 32,704,879 0.031 3 All Operations. 4 1 Includes Kentucky operations only. Poles are designated as hazardous waste in U.K. 5 Includes Pennsylvania and U.K. operations only. 2 Net Generation data excludes OVEC. Note: Kentucky does not track Non-Hazardous Waste other than ash.

77 78 PPL 2017 SUSTAINABILITY REPORT *SAIDI istheaverage outageduration (inminutes),excluding majorevents, perIEEEdefinition1366. WPD PPL Electric LG&E andKU System Average InterruptionDuration Index (SAIDI)* Average OutageDuration (inminutes) definition 1366. *SAIFI istheaverage numberofinterruptionspercustomer,excluding majorevents, perInstituteofElectrical andElectronics Engineers WPD PPL Electric LG&E andKU System Average InterruptionFrequency Index*(SAIFI) Average NumberofInterruptions(percustomer) 2017 RELIABILITY Work RelatedFatalities Recordable IncidentRate Lost TimeIncidentRate Number ofLostDay Cases Total HoursWorked 2017 SAFETY APPENDIX 1 1.23 0.25 27 25,172,506 2015 0 1.30 0.19 24 24,700,051 2016 28 75 87 2015 0.57 0.67 0.998 2015 29 71 100 2016 0.52 0.70 1.04 2016 1 1.08 0.15 18 24,157,564 2017 29 70 75 2017 0.50 0.60 0.84 2017