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      PPL 10K 2004 Comment Letter 7/7/05

              Paul
                Farr

              Vice
                President and Controller

              Tel.
                610.774.2426 Fax 610.774.5087

              E-mail:
                pfarr@pplweb.com

              PPL
                Corporation

              Two
                North Ninth Street

              Allentown,
                PA 18101-1179

              Tel.
                610.774.5151

              http://www.pplweb.com

      July
        7,
        2005

      Mr.
        Jim
        Allegretto

      Mail
        Stop
        0308

      U.S.
        Securities and Exchange Commission

      Judiciary
        Plaza

      450
        Fifth
        Street, N.W.

      Washington
        D.C. 20549

                Re:

                PPL
                  Corporation

                Form
                  10-K for Fiscal Year Ended December 31,
                  2004

                Form
                  10-Q for Fiscal Quarter Ended March 31,
                  2005

                File
                  No. 1-11459

                  PPL
                    Energy Supply, LLC

                Form
                  10-K for Fiscal Year Ended December 31,
                  2004

                Form
                  10-Q for Fiscal Quarter Ended March 31,
                  2005

                File
                  No. 333-74794

                  PPL
                    Electric Utilities
                    Corporation

                Form
                  10-K for Fiscal Year Ended December 31,
                  2004

                Form
                  10-Q for Fiscal Quarter Ended March 31,
                  2005

                File
                  No. 1-905

      Dear
        Mr.
        Allegretto:

      In
        response to your letter dated June 20, 2005 regarding the above-referenced
        filings, we are providing the following information to address your comments.
        Each of your comments has been reprinted in bold type and is followed by
        the
        response of PPL Corporation and its applicable subsidiary registrants
        (collectively “PPL”).

      Form
        10-K for Fiscal Year Ended December 31, 2004

      General

                1.

                Where
                  a comment below requests additional disclosures or other revisions
                  to be
                  made, these revisions should be included in your future filings,
                  as
                  applicable.

      We
        agree
        to provide these disclosures, where applicable, in our filings for future
        periods.

      Item
        7. Management's Discussion and Analysis of Financial Condition and Results
        of
        Operations

      Results
        of Operations

                2.

                To
                  the extent discussion of segment information contributes to an
                  understanding of the business, or when discussion on a consolidated
                  basis
                  does not present a complete picture, segment discussion should
                  be included
                  in MD&A. See Item 303(a) of Regulation
                  S-K.

      We
        believe that our Form 10-K for 2004 provided investors with a clear
        understanding of our business. In order to even further enhance our disclosure,
        we have included a discussion of segment information in PPL Corporation’s and
        PPL Energy Supply, LLC’s (PPL Energy Supply) first quarter 2005 Form 10-Q in the
        Results of Operations section of their respective MD&As. PPL Corporation’s
        and PPL Energy Supply’s Form 10-Q and Form 10-K filings for future periods will
        also include a discussion of segment information. Since PPL Electric Utilities
        Corporation (PPL Electric) operates in a single segment, there is no discussion
        of segment information in its MD&A.

      Consolidated
        Statement of Cash Flows

      PPL
        Corporation and Subsidiaries

                3.

                Please
                  explain to us why depreciation for the year ended December 31,
                  2002 per
                  the statement of cash flows does not agree to depreciation per
                  the
                  statement of income for the corresponding year. We note that these
                  items
                  agree for the years ended December 31, 2003 and
                  2004.

      The
        $78
        million difference in depreciation in 2002 between the Statement of Cash
        Flows
        and Statement of Income for both PPL and PPL Energy Supply was attributable
        to
        PPL’s acquisition of a controlling interest in Western Power Distribution
        Holdings Limited and WPD Investment Holdings Limited (together “WPD”) from
        Mirant Corporation (Mirant). As discussed in Note 9 in the Form 10-K for
        2004,
        on September 6, 2002, PPL acquired a controlling interest in WPD for
        approximately $236 million, including acquisition costs. Based on paragraph
        11
        of ARB 51, “Consolidated Financial Statements,” PPL’s Statement of Income for
        the 12 months ended December 31, 2002 reflected the consolidated results
        of WPD
        for the 12 months ended November 30, 2002, as though it had been acquired
        at the
        beginning of the year. The portion of earnings attributable to Mirant was
        reported as “Minority Interest.” The acquisition also resulted in the addition
        of $3.4 billion of WPD’s assets and $2.1 billion of WPD's debt to the Balance
        Sheet at September 30, 2002.

      The
        $367
        million of depreciation expense in 2002 reflected on the Statement of Income
        represented twelve months of depreciation, including a full year for WPD.
        The
        $289 million depreciation adjustment to net income in 2002 reflected in
        operating activities on the Statement of Cash Flows includes depreciation
        for
        WPD for only the last three months of 2002, which is the time period for
        which
        the accounts of WPD were consolidated on the Balance Sheet. Appendix
        C of SFAS 95, “Statement of Cash Flows,” depicts the payment for the purchase of
        an entity, net of the cash acquired, as an investing activity, in the Statement
        of Cash Flows with the cash flows of the acquired entity from the date of
        acquisition, reflected as operating, financing or investing activity, as
        appropriate, within the Statement of Cash Flows.

      Note
        1. Summary of Significant Accounting Policies

      Stock-Based
        Compensation

                4.

                You
                  disclose that PPL grants stock options with no intrinsic value.
                  We would
                  assume that "disqualifying dispositions" would occur and give rise
                  to tax
                  benefits that would be shown as a direct addition to stockholders
                  equity
                  pursuant to the guidance in paragraph 17 of APB 25. Please advise
                  why the
                  Statement of Shareholder's Equity contains no such adjustments.
                  If such
                  adjustments occurred and you classified them as income due to materiality,
                  please show us your quantitative and qualitative analysis regarding
                  materiality.

      The
        tax
        benefits that arise from disqualifying dispositions of PPL’s stock option grants
        are reflected as an addition to stockholders’ equity in the Statement of
        Shareowners’ Common Equity. The tax benefits are included in “Capital in excess
        of par - Other.” We have not provided a separate line item for the tax benefits,
        as they have not been deemed significant for separate line item disclosure.
        (The
        tax benefits have been less than $5 million per year, which is less than
        1
        percent of the total activity for Capital in Excess of Par for 2004.) However,
        we will continue to monitor the tax benefits and will provide a separate
        line
        item if this activity becomes significant in the future.

      Independent
        System Operator

                5.

                Please
                  explain in detail how you record hourly net sales and purchases
                  in your
                  financial statements and why such accounting is "...in accordance
                  with the
                  FERC and industry accounting." Please focus on the rationale for
                  a gross
                  or net display and indicate how you determine the unit of time
                  in which
                  gross or net accounting is
                  applied.

      PPL
        records sales to retail customers, bilateral wholesale sales and purchases
        of
        physical power and fuel expense for the generation of power using the accrual
        method of accounting in the period when the power is delivered. The wholesale
        sales and purchases that meet the criteria in EITF 03-11, “Reporting Realized
        Gains and Losses on Derivative Instruments That Are Subject to FASB Statement
        No. 133 and Not ‘Held for Trading Purposes’ as Defined in Issue No. 02-3,” are
        reported net on the Statement of Income within “Wholesale energy marketing.”
        Additionally, the bilateral sales and purchases that are designated as trading
        activities are also reported net, in accordance with EITF 02-3, “Issues Involved
        with Accounting for Derivative Contracts Held for Trading Purposes and Contracts
        Involved in Energy Trading and Risk Management Activities,” and are reported on
        the Statement of Income within “Net energy trading margins.” PPL sometimes
        settles these transactions by delivery in the Independent System Operator
        (ISO)
        spot market. Spot market activity that balances our physical trading positions
        is included on the Statement of Income in “Net energy trading
        margins.”

      To
        the
        extent that PPL’s generation output does not equal its net physical sales
        obligation on an hourly basis, PPL is required to either purchase from or
        sell
        to the governing ISO in order to balance its position. With the two-market
        settlement system that ISOs use, a participant’s day-ahead position for any
        given hour determines whether the participant is a net buyer or net seller
        for
        that hour. This position is subsequently adjusted in the real-time market
        to
        reflect actual generation and customer load activity. Thus, it is possible
        to be
        long in the day-ahead market (thus, a net seller to the ISO) but end up being
        short in the real-time market (a net purchaser), or vice versa. PPL records
        its
        hourly sales or purchases with the ISO based on real-time activity. In the
        Statement of Income, the sum of all hourly sales positions is recorded as
        “Wholesale energy marketing” and the sum of all hourly purchase positions is
        recorded as “Energy purchases.”

      We
        believe that this approach is consistent with FERC and industry accounting.
        FERC
        provides accounting guidance through its Uniform System of Accounts.
        Additionally, FERC provides oversight of ISOs, and ISOs operate hourly markets
        to ensure that the physical power grids are balanced at all times to satisfy
        system reliability requirements. To accomplish this, market participants
        bid in
        their megawatthour (MWh) entitlements (generation plus scheduled bilateral
        purchases) against their MWh obligations (expected customer load requirements
        plus scheduled bilateral sales) in the day-ahead market for every hour of
        every
        day, so that they have price certainty and the ISOs can direct the lowest-cost
        dispatch of generation. Market prices are determined and power positions
        are
        ultimately settled on an hourly basis in both the day-ahead and real-time
        markets. The ISOs do not allow for the exchange of power across time periods;
        if
        a participant is short 100 MWhs in one hour, it cannot compensate by being
        100
        MWhs long in the next hour.

      As
        noted
        above, the day-ahead market provides price stability for spot market activity;
        only the portion that is not settled in the day-ahead market is subject to
        the
        greater price volatility that happens in the real-time market. Infrequently,
        the
        real-time price is significantly different from the day-ahead price in any
        given
        hour, which could create a “negative purchase” or “negative sale.” PPL continues
        to report the transaction in a manner consistent with the real-time position
        for
        that hour. To illustrate:

              ·

                Assume
                  that during a given hour PPL sold 100 MWhs at $40 in the day-ahead
                  market,
                  but delivered 105 MWhs in the real-time market due to fluctuations
                  in
                  customer load. The real-time price for that hour was $60. PPL would
                  record
                  a 105 MWh sale for that hour with corresponding revenue of $4,300
                  or (100
                  MWhs x $40 + 5 MWhs x $60).

              ·

                Assume
                  further that in the next hour PPL bought 75 MWhs in the day-ahead
                  market
                  for $40 but required 90 MWhs in the real-time market, again due
                  to
                  fluctuations in customer load. Because of unexpected outages within
                  the
                  ISO territory, the real-time price for that hour was $400. PPL
                  would
                  record a 90 MWh purchase for that hour with corresponding expense
                  of
                  $9,000 or (75 MWhs x $40 + 15 MWhs x $400).

              ·

                Finally,
                  assume that in the third hour PPL sold 100 MWhs at $40 in the day-ahead
                  market, but only delivered 90 MWhs in the real-time market. The
                  real-time
                  price for that hour was $430. PPL would record 90 MWhs sale for
                  that hour
                  with a corresponding revenue of $(300) or (100 MWhs x $40 - 10
                  MWhs x
                  $430).

      In
        total,
        for those three hours PPL would have provided 105 MWhs to the ISO but would
        owe
        the ISO $5,000. PPL’s financial statements would reflect revenues of $4,000 for
        delivering 195 MWhs and purchased power of $9,000 for receiving 90 MWhs.
        We
        believe that this presentation accurately reflects the economics of the
        transactions. Additionally, we believe that this presentation is in accordance
        with revenue recognition guidance provided by Staff Accounting Bulletin No.
        104,
“Revenue Recognition,” of the Commission.

      Note
        2. Segment and Related Information

                6.

                We
                  note that you include PPL Telcom in the PPL Supply segment. Tell
                  us
                  whether you consider PPL Telcom to be a stand-alone operating segment
                  as
                  defined by paragraph 10 of SFAS 131. If not, explain to us how