Major Midlands and South West power distribution company goes up for sale

Western Power Distribution

Western Power Distribution, which operates networks that supply almost eight million customers across the Midlands, south Wales and the southwest has been put up for sale by its USA parent, The PPL Corporation.

PPL said it wanted to position itself as a “purely US-focused utility holding company and create additional shareowner value”.

Vincent Sorgi, PPL president and chief executive officer, said: “WPD is a very strong business that continues to perform exceptionally well as the premier distribution network operator (DNO) group in the UK, but we believe it continues to be undervalued by the market as part of PPL.

The company said it expects to evaluate a variety of offers for the purchase of WPD, including all cash or a combination of cash and U.S. utility assets.

WPD consists of four DNOs in the UK that have strong track records of performance, earning more performance incentive revenues under UK regulation than every other DNO group in the UK. WPD, which serves about eight million customers in central and southwest England and south Wales, is expected to play a critical role in supporting the UK’s transition to net-zero carbon emissions by 2050, providing significant future investment opportunities and regulated asset value growth.

PPL noted that a sale of WPD in the near term would provide the new owner an opportunity to influence WPD’s business plans for RIIO-ED2, the next U.K. price control period for electric distribution companies. The business plans are expected to be filed with the regulator Ofgem, in mid-2021. RIIO-ED2 will begin in April 2023 and ends in March 2028.

PPL has engaged JP Morgan Securities LLC to act as its financial advisor to assist with the sale process, with the intent to announce a transaction in the first half of 2021.