SECURITIES AND EXCHANGE COMMISSION
                                 WASHINGTON, DC 20549
                                      FORM 10-Q


                   X   QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
                       OF THE SECURITIES EXCHANGE ACT OF 1934

                       For the quarterly period ended  September 30, 1994March 31, 1995

                       TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d)
                       OF THE SECURITIES EXCHANGE ACT OF 1934

                       For the transition period from            to



                            Commission file number 1-3464


                               Kentucky Utilities Company
                (Exact name of registrant as specified in its charter)


           Kentucky and Virginia                                61-0247570
         (State or other jurisdiction of                    (I.R.S. Employer
          incorporation or organization)                   Identification No.)


        One Quality Street, Lexington, Kentucky                       40507
        (Address of principal executive offices)                    (Zip Code)


        Registrant's telephone number, including area code        606-255-2100


                                    Not Applicable
        Former name, former address  and former fiscal year, if  changed since
        last report


            Indicate by  check mark whether  the Registrant (1)  has filed all
        reports required to be filed by  Section 13 or 15(d) of the Securities
        Exchange  Act of  1934 during  the  preceding 12  months (or  for such
        shorter  period that the Registrant was required to file such reports)
        and (2) has  been subject to such filing requirements  for the past 90
        days.
        Yes   X     No     .


            Number  of  shares of  Common Stock  outstanding  at November 9, 1994:May  8, 1995:
        37,817,878 shares (owned by the parent-KU Energy Corporation).


                                         -1-


                            PART I.  FINANCIAL INFORMATION
                              KENTUCKY UTILITIES COMPANY
                                 STATEMENTS OF INCOME
                                     (Unaudited)
                              (in thousands of dollars)
                                                            For the Three
                                                             Months Ended
                                                              September 30,March 31,
                                                            1995      1994       1993


        Operating Revenues (See Note 3)                   $156,512  $160,6152)                   $167,148  $166,528

        Operating Expenses:
          Fuel, principally coal,
           used in generation (See Note 3)                  33,972    44,8602)                  45,706    43,859
          Electric power purchased                          15,603    10,68915,777    15,883
          Other operating expenses                          27,939    27,12030,598    26,687
          Maintenance                                       15,209    12,75514,856    14,538
          Depreciation                                      16,308    15,19118,701    16,187
          Federal and state income taxes                    14,208    15,94310,634    14,731
          Other taxes                                        3,536     3,4174,314     4,063

               Total Operating Expenses                    126,775   129,975140,586   135,948

        Net Operating Income                                29,737    30,64026,562    30,580

        Other Income and Deductions:
          Interest and dividend income                         771       827633     1,736
          Other income and deductions - net                  1,719     1,3121,480     1,173

               Total Other Income and Deductions             2,490     2,1392,113     2,909

        Income Before Interest Charges                      32,227    32,77928,675    33,489

        Interest Charges                                     8,585     7,9899,747     8,145

        Net Income                                          23,642    24,79018,928    25,344

        Preferred Stock Dividend Requirements                  564       629692

        Net Income Applicable to Common Stock             $ 23,07818,364  $ 24,16124,652



          The accompanying  Notes to  Financial Statements are  an integral
          part of these statements.
                                         -2-


                              KENTUCKY UTILITIES COMPANY
                               STATEMENTS OF INCOMECASH FLOWS
                                     (Unaudited)
                              (in thousands of dollars)
                                                            For the NineThree
                                                             Months Ended
                                                              September 30,March 31,
                                                            1995       1994

        1993Cash Flows from Operating Revenues (See Note 3)                   $477,066  $454,760Activities:

          Net Income                                      $ 18,928   $ 25,344
          Items not requiring (providing) cash currently:
            Depreciation                                    18,701     16,187
            Deferred income taxes and investment tax credit   (630)    (1,819)
            Changes in current assets and liabilities:
              Change in fuel inventory                        (254)     4,644
              Change in accounts receivable                  5,623      1,418
              Change in accounts payable                   (18,239)   (10,332)
              Change in accrued taxes                       10,725     17,858
              Change in accrued utility revenues             2,493      4,788
            Other--net                                       8,424      1,154

        Net Cash Provided by Operating Expenses:
          Fuel, principally coal,
           usedActivities           45,771     59,242

        Cash Flows from Investing Activities:

          Construction expenditures - utility              (28,035)   (40,496)
          Other                                                 10        163

        Cash Used by Investing Activities                  (28,025)   (40,333)

        Cash Flows from Financing Activities:
          Short-term borrowings - net                       (7,100)     3,500
          Funds deposited with trustee - net                 8,600      9,000
          Retirement of long-term debt                         (21)       (21)
          Retirement of preferred stock, including premium       -    (20,302)
          Payment of dividends                             (16,353)   (16,258)

        Net Cash Used by Financing Activities              (14,874)   (24,081)

        Net Increase (Decrease) in generation (See Note 3)                 121,203   132,385
          Electric power purchased                          47,842    26,128
          Other operating expenses                          82,271    77,688
          Maintenance                                       48,640    39,216
          Depreciation                                      48,646    45,606Cash and
         Cash Equivalents                                    2,872     (5,172)

        Cash and Cash Equivalents Beginning of Period        3,111      8,832

        Cash and Cash Equivalents End of Period           $  5,983  $   3,660

        Supplemental Disclosures
        Cash paid for:
          Interest on short and long-term debt            $  6,475  $   4,779
          Federal and state income taxes                  36,872    39,091
          Other taxes                                       11,241    10,642

               Total Operating Expenses                    396,715   370,756

        Net Operating Income                                80,351    84,004

        Other Income and Deductions:
          Interest and dividend income                       3,273     2,359
          Other income and deductions$      -  net                  4,767     4,513

               Total Other Income and Deductions             8,040     6,872

        Income Before Interest Charges                      88,391    90,876

        Interest Charges                                    24,932    25,116

        Net Income                                          63,459    65,760

        Preferred Stock Dividend Requirements                1,820     1,888

        Net Income Applicable to Common Stock             $       61,639  $ 63,872-


          The accompanying  Notes to  Financial Statements are  an integral
          part of these statements.
                                         -3-


                             KENTUCKY UTILITIES COMPANY
                                    STATEMENTS OF CASH FLOWSBALANCE SHEETS
                                     (Unaudited)
                              (in thousands of dollars)

                                                        For the Nine Months
                                                          Ended  September 30,As of       As of
                                                      March 31,    Dec. 31,
                                                         1995        1994

        1993ASSETS
        Utility Plant:
          Plant in service, at cost                   $2,274,572  $2,238,926
          Less: Accumulated depreciation                 953,153     933,394
                                                       1,321,419   1,305,532
          Construction work in progress                   98,617     104,385
                                                       1,420,036   1,409,917
        Current Assets:
          Cash Flows from Operating Activities:

          Net Incomeand cash equivalents                        5,983       3,111
          Escrow funds - coal contract litigation          6,508       6,911
          Construction funds held by trustee               9,979      18,553
          Accounts receivable                             36,089      41,712
          Accrued utility revenues                        21,734      24,227
          Fuel, principally coal, at average cost         35,906      35,652
          Materials and supplies, at average cost         21,670      20,081
          Other                                           11,002      10,616
                                                         148,871     160,863
        Investments, Deferred Charges and Other Assets:
          Unamortized loss on reacquired debt             12,069      12,324
          Other                                           34,933      34,996
                                                          47,002      47,320
               Total Assets                           $1,615,909  $1,618,100

        CAPITALIZATION AND LIABILITIES
        Capitalization:
          Common stock equity                         $  63,459567,776  $  65,761
          Items not requiring (providing) cash currently:
            Depreciation                                    48,646    45,606565,201
          Preferred stock                                 40,000      40,000
          Long-term debt                                 495,987     496,012
                                                       1,103,763   1,101,213
        Current Liabilities:
          Long-term debt due within one year                  21          21
          Short-term borrowings                           69,200      76,300
          Accounts payable                                31,278      49,517
          Accrued interest                                 9,938       7,328
          Accrued taxes                                   20,147       9,422
          Customers' deposits                              6,421       6,423
          Accrued payroll and vacations                   10,718       8,207
          Liab. to ratepayers - coal contract litigation   6,508       6,909
          Other                                            7,956       6,275
                                                         162,187     170,402
        Deferred Credits and Other Liabilities:
          Accumulated deferred income taxes              and215,826     214,892
          Accumulated deferred investment tax credit (4,768)    1,939
            Change in fuel inventory                        (2,968)    3,853
            Change in accounts receivable                   (1,651)  (10,192)
            Change in accounts payable                         623     4,722
            Change in accrued taxes                          3,648     5,869
            Change in accrued utility revenues               4,964     3,037
            Change incredits     37,251      38,275
          Regulatory tax liability                        to ratepayers              (28,704)   34,889
            Change in escrow funds                          29,582   (38,001)
          Other--net                                         3,665    10,067

        Net Cash Provided by Operating Activities          116,496   127,550

        Cash Flows from Investing Activities:

          Construction expenditures - utility             (130,035) (104,932)
          Nonutility property                                 (237)   (4,955)60,119      60,788
          Other                                           337       124

        Cash Used by Investing Activities                 (129,935) (109,763)

        Cash Flows from Financing Activities:
          Short-term borrowings - net                       59,100         -
          Issuance of long-term debt                             -   123,500
          Funds deposited with trustee - net                18,393         -
          Retirement of long-term debt, including premiums     (21) (180,677)
          Retirement of preferred stock, including premium (20,302)        -
          Payment of dividends                             (48,114)  (47,270)

        Net Cash Provided (Used) by Financing Activities     9,056  (104,447)

        Net Decrease in Cash36,763      32,530
                                                         349,959     346,485
               Total Capitalization and Cash Equivalents           (4,383)  (86,660)

        Cash and Cash Equivalents Beginning of Period        8,832    94,299

        Cash and Cash Equivalents End of Period           $  4,449  $  7,639

        Supplemental Disclosures
          Cash paid for:
            Interest on long-term debt                    $ 20,063  $ 24,767
            Federal and state income taxes                $ 38,414  $ 33,148Liabilities   $1,615,909  $1,618,100


          The accompanying  Notes to  Financial Statements are  an integral
          part of these statements.
                                         -4-




                             KENTUCKY UTILITIES COMPANY
                                    BALANCE SHEETS
                                     (Unaudited)
                              (in thousands of dollars)

                                                         As of       As of
                                                       Sept. 30,    Dec. 31,
                                                          1994        1993
        ASSETS
        Utility Plant:
          Plant in service, at cost                    $2,079,701  $2,004,688
          Less: Accumulated depreciation                  925,102     879,960
                                                        1,154,599   1,124,728
          Construction work in progress                   209,325     158,829
                                                        1,363,924   1,283,557
        Current Assets:
          Cash and cash equivalents                         4,449       8,832
          Escrow funds - coal contract litigation           8,170      37,752
          Construction funds held by trustee                    2      18,268
          Accounts receivable                              43,108      41,457
          Accrued utility revenues                         20,611      25,575
          Fuel, principally coal, at average cost          34,041      31,073
          Materials and supplies, at average cost          18,649      17,261
          Other                                             7,584       7,804
                                                          136,614     188,022
        Investments, Deferred Charges and Other Assets:
          Accumulated deferred income taxes                42,162      35,778
          Unamortized loss on reacquired debt              12,578      13,295
          Other                                            36,387      38,400
                                                           91,127      87,473
               Total Assets                            $1,591,665  $1,559,052
        CAPITALIZATION AND LIABILITIES
        Capitalization:
          Common stock equity                          $  567,123  $  552,106
          Preferred stock                                  40,000      40,000
          Long-term debt                                  442,015     442,045
                                                        1,049,138   1,034,151
        Current Liabilities:
          Preferred stock and long-term debt
            due within one year                                21      20,021
          Short-term borrowings                            59,100           -
          Accounts payable                                 44,629      44,006
          Accrued interest                                  9,993       7,302
          Accrued taxes                                     8,308       4,660
          Customers' deposits                               6,284      10,803
          Accrued payroll and vacations                    10,075       7,709
          Liab. to ratepayers - coal contract litigation    8,163      36,867
          Other                                             7,148       6,434
                                                          153,721     137,802
        Deferred Credits and Other Liabilities:
          Accumulated deferred income taxes               254,593     248,103
          Accumulated deferred investment tax credits      39,302      42,385
          Regulatory liabilities                           65,946      69,689
          Other                                            28,965      26,922
                                                          388,806     387,099
               Total Capitalization and Liabilities    $1,591,665  $1,559,052

          The accompanying  Notes to  Financial Statements are  an integral
          part of these statements.
                                         -5-





                              KENTUCKY UTILITIES COMPANY
                            NOTES TO FINANCIAL STATEMENTS
                                     (Unaudited)


          1.  PRESENTATION OF CONDENSED INFORMATION

              Pursuant to the rules  and regulations of the  Securities and

          Exchange Commission,  certain information has been  condensed and

          certain footnote disclosures have been omitted, which are normal-

          ly included  in financial statements prepared  in accordance with

          generally accepted accounting principles.

              These financial  statements  should  be read  in  conjunction

          with the financial statements and  notes thereto in the  Kentucky

          Utili-tiesUtilities  Company (Kentucky Utilities)(KU) Annual Report  on Form 10-

          K10-K  for the year

          ended December 31, 1993.1994.

              In  the  opinion  of management,  the  information  furnished

          herein reflects  all adjustments  which are necessary  to present

          fairly the results of the periods shown and the disclosures which

          have  been made are adequate to make the information not mislead-

          ing.   Results of interim periods  are not necessarily indicative

          of results for any twelve-month period due to the seasonal nature

          of Kentucky Utilities'KU's business.



          2.  PREFERRED STOCK

              Kentucky Utilities  issued  $20 million  of  6.53%  preferred

          stock  in December 1993.  On February 1, 1994, Kentucky Utilities

          used the proceeds from this  issue, together with other available

          funds,  to redeem  its 7.84% Preferred  Stock at a  total cost of

          $20.3 million  (including a  redemption premium  of $.3 million).

          Kentucky  Utilities  announced  its   intention  to  redeem  this

          preferred stock on December 22, 1993.




                                         -6-





                              KENTUCKY UTILITIES COMPANY
                            NOTES TO FINANCIAL STATEMENTS
                                     (Unaudited)


          3.  OPERATING REVENUES AND FUEL COSTS

              Pursuant to  regulatory orders,  Kentucky  UtilitiesKU has  been refunding  fuel

          cost  savings  related  to  the resolution  of  a  coal  contract

          dispute.  Refunds to Kentucky retail customers commenced in  July

          1994.   Refunds were made to Virginia retail customers during the

          period  August  1993 through  June 1994.    Refunds were  made to

          wholesale customers under the  jurisdiction of the Federal Energy

          Regulatory Commission in lump sum payments in September 1993.


                                         Operating  revenues  and  fuel  expense  for  the  respective

          periods  were reduced by the following amounts resulting from the

          above- mentioned refunds:

                              Three Months Ended        Nine Months Ended
                                   Sept. 30,               Sept. 30,

                                1994        1993        1994         1993

                                        (in thousands of dollars)

           Reductions in:

           Operating
            Revenues          $17,540      $4,312      $18,442      $4,312
           Fuel, principally
            coal, used in
            generation        $18,614      $5,098      $21,980      $5,098



              The difference  between the reduction  in Operating  Revenues

          and the  reduction  in Fuel  Expense  is attributed  to  incurred

          litigation costs, fuel costs  savings related to off-system sales

          and costs incurred  to administer the refund plan.  These amounts

          were allowed  to be  retained by  Kentucky Utilities  pursuant to



                                         -7--5-


                              KENTUCKY UTILITIES COMPANY
                            NOTES TO FINANCIAL STATEMENTS
                                     (Unaudited)


              Operating revenues  and  fuel  expense  for  the  three-month

          period ended March 31, 1994 were reduced by $.5 million  and $2.9

          million, respectively, resulting from the above-mentioned refund.

          The refunding had no impact on operating revenues or fuel expense

          for  the three-month period ended March 31, 1995.  The difference

          between the reduction in operating revenues and the  reduction in

          fuel expense is  attributed to incurred litigation costs and fuel

          costs  savings related to  off-system sales.   These amounts were

          allowed to be retained by KU pursuant to regulatory orders.




























                                         -6-


                              KENTUCKY UTILITIES COMPANY
                       MANAGEMENTS' DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF OPERATIONS


          LIQUIDITY & RESOURCES

              Kentucky  Utilities'KU's   construction  expenditures   increaseddecreased   approximately

          $26$12 million forduring the nine-monththree-month  period ended

          September 30,  1994ending March 31, 1995,

          compared  to the same period of  1993.1994.  The increasedecrease is primarily

          attributable to planned reductions in expenditures for combustion

          turbine  peaking units and for compliance with the 1990 Clean Air

          Act Amendments.

              Kentucky UtilitiesKU plans to  issue $54up to an  additional $50 million  of tax-exemptlong-

          term  debt  during  the 4th quarter of  19941995,  principally  to  fund certain solid waste

          disposal facilities' expenditures.refinance  short-term

          indebtedness.



          RESULTS OF OPERATIONS

          Quarter ended September 30, 1994,March 31, 1995, compared
          to the Quarter ended September 30, 1993March 31, 1994

              Net income  applicable to  common stock  for the  three-month

          period ending March  31, 1995  was $18.4 million  as compared  to

          $24.7 million for the  corresponding period of 1994.   Net income

          applicable to common stock for the first quarter of 1994 included

          a  one-time recovery of about $1.9 million from the resolution of

          a coal  contract dispute.  For  additional information concerning

          the  refunds resulting  from resolution  of the  dispute and  the

          impact on 1994 operating results, refer to Note 2 of the Notes to

          Financial Statements, "Operating Revenues and Fuel Costs".



                                         -7-


                              KENTUCKY UTILITIES COMPANY
                       MANAGEMENTS' DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF OPERATIONS


                                                 Increase (Decrease)
                                                    From Prior Year
                                                    Three Months
                                                 Ended Sept. 30, 1994March 31, 1995
                                                 kWh        Revenues
                                                 (%)         (000's)

          Residential                             (9)(6)       $ (3,017)(1,255)
          Commercial                              (1)          4891,060
          Industrial                               9           3,1145           2,299
          Mine Power & Public Authorities         6           1,718(2)            666
              Total Retail Sales                  -           2,304(2)          2,770
          Other Electric Utilities               59           7,403(21)         (2,477)
          Miscellaneous Revenues & Other           -            (582)(210)
              Total Before Refund                 9           9,125(5)             83
          Provision for Refund -
            Litigation Settlement                  -             (13,228)537
              Total                               9(5)       $    (4,103)620


              Operating  revenues, before  the  impact  of the  refunds  to

          customers,  increased  about  $.1  million.    A 5%  decrease  in

          kilowatt-hour sales  was offset  by $3.8 million  recovered under

          the environmental  surcharge discussed below (see  page 10).  The

          decrease in kilowatt-hour  sales is attributable to a  decline in

          residential and off-system sales, partially offset by an increase

          in industrial  sales.  The increase in  industrial sales reflects

          continued  economic growth  in the  manufacturing sector  of KU's

          service area.  About 30% of the industrial sales increase was due

          to greater sales to Toyota Motor Manufacturing U.S.A., Inc., KU's

          largest  customer.     The   decrease  in  off-system   sales  is

          attributable  to a  decrease in  demand for power  at neighboring

          utilities.   The  decline  in residential  sales reflects  milder

          weather during the first quarter of 1995 compared to 1994.

              Fuel expense, excluding the effect of the refunds to customers,

          decreased $1.1 million (2%).  This decrease reflects a 6% decrease

                                         -8-


                              KENTUCKY UTILITIES COMPANY
                       MANAGEMENTS' DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF OPERATIONS

          Operating revenues were  impacted by refunds to  customers of

          fuel  cost  savings associated  with  the  resolution  of a  coal

          contract  dispute.   Refer to  Note 3  of the Notes  to Financial

          Statements for  further discussion.   Operating  revenues, before

          the impact  of the refunds  to customers, increased  $9.1 million

          (6%)  primarily as  a result  of a  9% increase  in kilowatt-hour

          sales.    The  increase   in  kilowatt-hour  sales  is  primarily

          attributable  to  increases in  industrial  and off-system  sales

          partially  offset by  a  decrease  in  residential  sales.    The

          increase in  industrial sales reflects the  continued improvement

          of the manufacturing segment of  the service area.  About  40% of

          the  increase  in industrial  sales is  due  to greater  sales to

          Toyota   Motor  Manufacturing  U.S.A.,   Inc.    (TMM),  Kentucky

          Utilities'  largest  customer.   TMM  completed  an $800  million

          assembly plant expansion  in March  1994.  The  increase in  off-

          system sales is attributable  to an increase in demand  for power

          at  neighboring utilities.    The decrease  in residential  sales

          resulted  from  the mild  weather  experienced  during the  third

          quarter of 1994.

              Fuel expense  was also impacted  by the previously  mentioned

          refunds to customers.  Refer to  Note 3 of the Notes to Financial

          Statements for  further discussion.  Fuel  expense, excluding the

          effect of the refunds to  customers, increased $2.6 million (5%).

          This increase reflects a 4% increase in tons of coal consumed, andpartially offset by a 1%3% increase in

          the  average price  per ton  of coal  consumed.   Purchased power

          expense increased  by $4.9decreased $.1 million (46%(1%)  due to an increase in  demand

          costs  ($1.3 million)  offset  by  a  decrease  in  kilowatt-hour

          purchases   ($1.4 million).     The  decrease   in  kilowatt-hour

          purchases is due to the previously mentioned decline in kilowatt-

          hour sales.

              Other operating expenses increased $3.9 million (15%) due  to

          increased   generating   plant  operations   expenses  (primarily

          attributable  to costs associated with environmental compliance),

          advertising  and  marketing  program   expenses  and  timing   of

          administrative and general expenditures.

              Maintenance  expense increased  $.3 million  (2%)  due to  an

          increase in  production maintenance resulting from  the timing of

          scheduled maintenance at KU's generating stations.  This increase

          was   substantially  offset   by   a  decrease   in  distribution

          maintenance in 1995.   Extensive  ice storm damage  in the  first

          quarter  of  1994  increased  distribution  maintenance  in  that

          period.

              Depreciation  expense increased $2.5  million (16%) resulting

          from the Ghent Unit 1 scrubber and two combustion turbine peaking

          units being placed into service late in 1994 and early 1995.

              Interest  charges increased $1.6 million (20%) reflecting the

          issuance  of additional short-term debt (commercial paper) during

          1995 as well as the issuance of $54 million of  long-term debt in

                                         -9-

                              KENTUCKY UTILITIES COMPANY
                       MANAGEMENTS' DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF OPERATIONS

          higher  demand costs  ($3.6  million)  andthe fourth quarter  of 1994.   The average  amount of  short-term

          debt   outstanding  during   the  first   quarter  of   1995  was

          substantially greater kilowatt-hour

          purchases ($1.3  million).    The  increasethan in demand  costs  is

          primarily due to the permanent increase in capacity entitlement,

          effectivefirst quarter of 1994.



          ENVIRONMENTAL COST RECOVERY

              In July  1994, the PSC approved KU's January 1994 application

          to  implement   an  environmental  surcharge.     The  surcharge,

          authorized  by a Kentucky statute enacted in 1992, is designed to

          recover certain operating and capital costs related to compliance

          with   federal,  state   or   local  environmental   requirements

          associated with the production of energy from Electric Energy, Inc.  (EEI).coal, including the

          1990 Clean Air Act Amendments.  KU's  environmental surcharge was

          implemented in August 1994.  KU estimates that it has resulted in

          an average increase  of about  4% in a  customer's monthly  bill,

          leaving KU's  rates very  competitive.  The  increased  kilowatt-hour purchases  were primarily  from EEI.   A

          contract  between Kentucky  Utilities  and  EEI  allows  Kentucky

          Utilities to purchase, on an economic basis, 20%constitutionality of

          the  available

          capacity fromsurcharge  is  being   challenged  in  the  Franklin  County

          (Kentucky) Circuit Court.  Management believes that the surcharge

          statute  is constitutional and the PSC approval of July 1994 will

          be upheld.



          UTILITY ISSUES - COMPETITION

              In  March  1995,  the  Federal Energy  Regulatory  Commission

          (FERC) issued a 1,000-megawatt generating station ownedNotice of Proposed Rulemaking (NOPR) by EEI.

              Maintenance expenses  increased $2.5 million (19%), primarily

          duewhich the

          FERC will require public utilities that own or control facilities

          used  for  the  transmission  of electric  energy  in  interstate

          commerce  to  the timing of scheduled maintenance at Kentucky Utilities'

          generating stations.



          Nine Months ended September 30, 1994, compared
          to the Nine Months ended September 30, 1993



                                                 Increase (Decrease)
                                                    From Prior Year
                                                     Nine Months
                                                 Ended Sept. 30, 1994
                                                 kWh        Revenues
                                                 (%)         (000's)

          Residential                              2        $  4,790
          Commercial                               3           3,698
          Industrial                               8           6,591
          Mine Power & Public Authorities          5           3,170
              Total Retail Sales                   4          18,249
          Other Electric Utilities                52          17,890
          Miscellaneous Revenues & Other           -             297
              Total Before Refund                 11          36,436
          Provision for Refund -
            Litigation Settlement                  -         (14,130)
              Total                               11        $ 22,306offer  "open  access"  transmission  service  on  a

                                         -10-


                              KENTUCKY UTILITIES COMPANY
                       MANAGEMENTS' DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF OPERATIONS

          Operating revenues were  impactednondiscriminatory  basis. The  FERC  also proposes  to allow,  in

          certain circumstances, the collection of charges for the recovery

          of  stranded costs  when customers  change power  suppliers.   KU

          filed a Transmission Services (TS) Tariff and Power Services (PS)

          Tariff  on September 30,  1994 (Refer to  Management's Discussion

          and  Analysis in  the 1994 Annual  Report on Form  10-K under the

          heading "Utility Issues - Competition" for a discussion of the TS

          Tariff and PS Tariff filed by refunds to  customers of

          fuel  cost  savings associatedKU).  KU revised the TS Tariff in a

          filing made on March 31, 1995 with the resolutionFERC.  KU will comply with

          any requirements mandated by the FERC's final rules.  Although KU

          does not expect either  of these new  tariffs to have a  coal

          contract dispute.   Refer  to Note  3material

          impact on its 1995 revenues or income, they are indicative of the

          Notes  to Financial

          Statements for  further discussion.   Operating  revenues, before

          the impact of the refunds  to customers, increased $36.4  million

          (8%)  primarily as a result  of an 11%  increaseincreasingly  competitive  environment  in  kilowatt-hour

          sales.    The  increase  in  kilowatt-hour  sales  is   primarily

          attributable to increases in residential,  commercial, industrialwhich  KU  and  off-system sales.  The  increase in industrial sales reflects

          the  continued improvement  of the  manufacturing segment  of the

          service area.   About 40% of the increase in  industrial sales is

          attributable  to greater  sales to  TMM due  its to  recent plant

          expansion.   The increase in  off-system sales is attributable to

          an  increase in demand for  power due to  maintenance programs at

          neighboringother

          utilities and to  warm  weather  during the  second

          quarter of 1994.

              Fuel  expense was also  impacted by  the previously mentioned

          refunds to customers.  Refer to  Note 3 of the Notes to Financial

          Statements for  further discussion.  Fuel  expense, excluding the

          effect of the refunds to  customers, increased $5.7 million (4%).

          This increase reflects a 3% increase in the average price per ton

          of coal consumed and a 1% increase in the tons  of coal consumed.

          Purchased power  expense increased  $21.7  million (83%)  due  to

          higher demand costs  ($10 million) and  to greater  kilowatt-hour

          purchases  ($11.7  million).   The  increase in  demand  costs isoperate.









                                         -11-




                              KENTUCKY UTILITIES COMPANY
                       MANAGEMENTS' DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF OPERATIONS

          primarily due to the permanent increase in capacity  entitlement,

          effective January 1994,  from EEI.   The increased  kilowatt-hour

          purchases were primarily from EEI.

              Maintenance  expenses increased  $9.4  million  (24%).    The

          increase is  the result of distribution  utility line maintenance

          costs incurred as a  result of extensive ice storm  damage during

          the first quarter  of 1994, as  well as  the timing of  scheduled

          maintenance at Kentucky Utilities' generating stations.





































                                         -12-

                             PART II.  OTHER INFORMATION

                              KENTUCKY UTILITIES COMPANY


          ITEM 1.  LEGAL PROCEEDINGS


          ENVIRONMENTAL COST RECOVERY

             By  order  of  July  19,  1994,  the  Kentucky  Public  Service

          Commission (PSC) approved Kentucky   Utilities'KU's  plan for environmental  surcharge

          adjustments to customer  billings beginning in August 1994.   The

          surcharge,  authorized by a Kentucky statute enacted in 1992,  is

          designed to recover certain  ongoing operating and capital costs,

          not  already included  in existing  rates, related  to compliance

          with   federal,  state   or   local  environmental   requirements

          associated with the production of energy from coal, including the

          1990 Clean Air Act Amendments.  Surcharge billings are subject to

          periodic  PSC  review  to  confirm  the  level  of  environmental

          expenditures and  to reconcile  previous surcharge  billings with

          actual costs.

             Two requests  for rehearing  were filed  by interveners  before

          the PSC.  The PSC denied those requests for rehearings.

             On September 9, 1994, the Attorney General of the  Commonwealth

          of Kentucky (Attorney  General) filed an  action in the  Franklin

          County  (KY) Circuit  Court challenging the  constitutionality of

          the  Kentucky surcharge  statute  and seeking  to vacate  the PSC

          order of July  19, 1994  on the  ground, among  others, that  the

          environmental  surcharge approved  by the  PSC will  deprive Kentucky

          Utilities'KU's

          customers  of their  property without  due process  of law.   The

          Attorney General has been joined by interveners asserting similar

          claims  on  behalf  of ratepayer groups.   In  December 1994, the

          Circuit Court denied  a motion  by the Attorney  General and  two

          interveners seeking  to have surcharge collections deposited with

                                         -12-


          the  court pending  the outcome  of the  litigation.   Management

          believes that based  on  its review  of  the

          circumstances,  the surcharge  statute is constitutional  and it  is

                                         -13-





          probable that

          the PSC order of  July 19, 1994 approving  the surcharge will  be

          upheld.   In the remote  occurrence that the  statute is declared

          unconstitutional, amounts collected pursuant to the PSC order may

          be subject to refund.



          By motion filed November 8, 1994,  the Attorney General and two

          interveners are seekingFUEL MATTERS

             A  former  coal  supplier  of  KU  has  initiated   arbitration

          proceedings  to   recover  approximately  $536,000   in  on-going

          reclamation  costs claimed  to have  surcharge collections  depositedbeen incurred  during mining

          operations  at  the supplier's  mine used  to  supply KU  under a

          contract that expired  in 1988.   In addition,  the supplier  has

          submitted invoices for approximately $1,324,000 representing what

          it  claims are final reclamation costs incurred during 1994.  The

          supplier  has stated  that invoices  for final  reclamation costs

          will  be submitted every six months over the five years estimated

          by  the supplier for completion of final reclamation, which began

          in  1994.  The supplier  has not sought  arbitration or otherwise

          initiated  proceedings  with  respect  to the  court pendingclaims  for  final

          reclamation nor has it produced any original cost data in support

          of  its claims  for  final reclamation.    Management intends  to

          contest vigorously the outcomeclaims for on-going and final reclamation.

          Although the total amount of the litigation.   Kentucky

          Utilitiesclaims is unknown at this  time,

          KU believes that  this matter  will not have  a material  adverse

          effect on KU's financial position or its results of operation. KU

          will seek to recover any amounts ultimately paid through the motion is without merit and should be

          denied.Fuel

          Adjustment Clause.


                                         -13-





          ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

             (a) Exhibits.

                 The following exhibits are filed as part of this report:

                 Exhibit
                 Number                    Description

                 12      Computation of Ratio of Earnings to Fixed Charges.

                 27      Financial Data Schedule  (required for  electronic
                         filing only in  accordance with Item  601(c)(1) of
                         Regulation S-K.)


             (b) Reports on Form 8-K.

                 None.
























                                         -14-



                              KENTUCKY UTILITIES COMPANY



                                      SIGNATURES





             Pursuant to the requirements of the Securities Exchange Act  of

          1934, the Registrant  has duly caused this report to be signed on

          its behalf by the undersigned thereunto duly authorized.





                                                KENTUCKY UTILITIES COMPANY
                                                       (Registrant)



          Date   November 9, 1994May 8, 1995                    /s/ John T. Newton
                                                John T. Newton
                                                Chairman  of the  Board  and
                                                Chief Executive Officer



          Date   November 9, 1994May 8, 1995                    /s/ Michael D. Robinson
                                                Michael D. Robinson
                                                Controller






                                         -15-