In a goodwill effort, E.ON will donate parting gifts of $2 million to the University of Kentucky, $2 million to the University of Louisville and $2 million to the Louisville Gas & Electric Foundation.
The power company's donations could help generate public support for the German company's announced $7.6 billion sale of LG&E and Kentucky Utilities to PPL, a Pennsylvania-based utility consortium that beat out a bid by the city of Louisville to take local ownership.
The gift to UK will go to support "clean coal" research. The gift to U of L is for engineering and energy-efficiency programs, and the gift to the LG&E Foundation will continue support of community and charitable efforts, according to a company release. The utilities have financially supported education and research at the universities for decades, and that will continue.
Louisville Mayor Jerry Abramson's office said that after it became clear over the weekend that the city's bid could not succeed, he talked with E.ON's leadership about what he "felt was critical to gain the community's support for a sale," including maintaining Kentucky jobs, service and financial commitments.
The $6 million in E.ON gifts will be on top of PPL's commitments to continue grants and financial support and research investments, according to Abramson's office.
In announcements of the deal, E.ON and Abramson said PPL has committed to:
■ Keeping LG&E's and KU's respective headquarters in Louisville and in Lexington for at least 15 years.
■ Keeping local management and work force, with no job losses and union contracts remaining intact;
■ Maintaining service to customers with no changes;
■ Keeping the LG&E and KU names;
■ Continuing existing economic development efforts with the state.
"E.ON has been a strong partner in Kentucky, and they want to leave a legacy for the future," said Victor Staffieri, chairman, CEO and president of E.ON U.S. "Throughout their ownership, they have invested in LG&E and KU, especially in areas of research and development and supporting the civic and charitable organizations in the communities we serve. In addition to the commitments made by PPL, E.ON's donations will help ensure those efforts continue."
At a meeting with LG&E employees Thursday afternoon in Louisville, Staffieri and PPL chairman, president and CEO Jim Miller reiterated that.
"You can be assured that our commitment to the communities in which we operate will continue," Staffieri said. "The people we serve have played a vital role in the success of LG&E and KU, and will continue to do so going forward. PPL has committed to maintaining the same level of charitable contributions and community activities that LG&E and KU now provide to many worthwhile causes throughout our service areas."
Miller said the combination of PPL, LG&E and KU "is a perfect fit. ... While this announcement may symbolize a change in ownership, most of what makes up LG&E and KU will remain as it is today. ... To put it plainly, this transaction is based on growth."
The sale, announced late Wednesday, is subject to the approval of the Kentucky Public Service Commission, the Virginia State Corporation Commission (KU also serves five counties in Virginia), and the Federal Energy Regulatory Commission. E.ON and PPL said they anticipate completing the sale by year's end.
The donations are a parting gift to the state made after negotiations with the city of Louisville fell apart.
The company stressed that the gift from E.ON is not part of the transaction agreement but rather "in recognition of the community relationships it has built as the parent as the parent company of LG&E and KU over the past decade."