PPL Corporation: Rate base
PPL Corporation’s (PPL) projected 5% annual rate base growth is expected to drive its EPS growth in the next few years. PPL’s Pennsylvania Transmission rate base is expected to increase 10% while the UK (or Western Power Distribution) rate base is estimated to grow more than 5%, compounded annually through 2020.
Incremental spending can improve a utility’s rate base, which can have a positive impact on its earnings. The business model of regulated utilities (XLU) generally supports the company in spending more in operational territories to earn more.