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  March 31,June 30, 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 May  8,August 9,  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
                                                               March 31,June 30,
                                                            1995       1994


        Operating Revenues (See Note 2)                   $167,148  $166,528$154,757  $154,026

        Operating Expenses:
          Fuel, principally coal, used in
             generation (See Note 2)                        45,706    43,85940,679    43,372
          Electric power purchased                          15,777    15,88317,631    16,356
          Other operating expenses                          30,598    26,68730,127    27,645
          Maintenance                                       14,856    14,53819,493    18,893
          Depreciation                                      18,701    16,18718,785    16,151
          Federal and state income taxes                     10,634    14,7315,634     7,933
          Other taxes                                        4,314     4,0634,125     3,642

               Total Operating Expenses                    140,586   135,948136,474   133,992

        Net Operating Income                                26,562    30,58018,283    20,034

        Other Income and Deductions:
          Interest and dividend income                         633     1,736803       766
          Other income and deductions - net                  1,480     1,1731,376     1,875

               Total Other Income and Deductions             2,113     2,9092,179     2,641

        Income Before Interest Charges                      28,675    33,48920,462    22,675

        Interest Charges                                     9,747     8,1459,901     8,202

        Net Income                                          18,928    25,34410,561    14,473

        Preferred Stock Dividend Requirements                  564       692564

        Net Income Applicable to Common Stock             $  18,3649,997  $ 24,65213,909







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

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

                                                             For the ThreeSix
                                                             Months Ended
                                                               March 31,June 30,
                                                            1995       1994


        Cash Flows from Operating Activities:

          Net Income                                      $ 18,928   $ 25,344
          Items not requiring (providing) cash currently:Revenues (See Note 2)                   $321,905  $320,554

        Operating Expenses:
          Fuel, principally coal, used in
             generation (See Note 2)                        86,385    87,231
          Electric power purchased                          33,408    32,239
          Other operating expenses                          60,725    54,332
          Maintenance                                       34,349    33,431
          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 Activities           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 Cash 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  $   4,77937,486    32,338
          Federal and state income taxes                    16,268    22,664
          Other taxes                                        8,439     7,705

               Total Operating Expenses                    277,060   269,940

        Net Operating Income                                44,845    50,614

        Other Income and Deductions:
          Interest and dividend income                       1,436     2,502
          Other income and deductions - net                  2,856     3,048

               Total Other Income and Deductions             4,292     5,550

        Income Before Interest Charges                      49,137    56,164

        Interest Charges                                    19,648    16,347

        Net Income                                          29,489    39,817

        Preferred Stock Dividend Requirements                1,128     1,256

        Net Income Applicable to Common Stock             $ -28,361  $ -38,561







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

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

                                                           For the Six Months
                                                             Ended June 30,
                                                            1995      1994
        Cash Flows from Operating Activities:

          Net Income                                      $ 29,489  $ 39,817
          Items not requiring (providing) cash currently:
            Depreciation                                    37,486    32,338
            Deferred income taxes and investment tax credit (1,097)   (3,342)
            Changes in current assets and liabilities:
              Change in fuel inventory                      (2,199)      179
              Change in accounts receivable                  2,957     2,059
              Change in accounts payable                   (11,075)   (3,195)
              Change in accrued taxes                        4,737     2,998
              Change in accrued utility revenues              (628)    1,865
            Other--net                                       1,201    (2,393)

        Net Cash Provided by Operating Activities           60,871    70,326

        Cash Flows from Investing Activities:

          Construction expenditures - utility              (54,480)  (89,468)
          Other                                                 17       170

        Cash Used by Investing Activities                  (54,463)  (89,298)

        Cash Flows from Financing Activities:

          Short-term borrowings - net                      (31,300)   47,900
          Issuance of long-term debt                        50,000         -
          Funds deposited with trustee - net                 8,600    18,393
          Retirement of long-term debt                         (21)      (21)
          Retirement of preferred stock, including premium       -   (20,302)
          Payment of dividends                             (32,706)  (32,139)

        Net Cash Provided (Used) by Financing Activities    (5,427)   13,831

        Net Increase (Decrease) in Cash and Cash Equivalents   981    (5,141)

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

        Cash and Cash Equivalents End of Period           $  4,092  $  3,691

        Supplemental Disclosures
          Cash paid for:
            Interest on short and long-term debt          $ 18,622  $ 15,378
            Federal and state income taxes                $ 12,826  $ 25,378



          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
                                                        March 31,June 30,    Dec. 31,
                                                          1995        1994
        ASSETS
        Utility Plant:
          Plant in service, at cost                    $2,274,572$2,286,014  $2,238,926
          Less: Accumulated depreciation                  953,153970,974     933,394
                                                        1,321,4191,315,040   1,305,532
          Construction work in progress                   98,617112,268     104,385
                                                        1,420,0361,427,308   1,409,917
        Current Assets:
          Cash and cash equivalents                         5,9834,092       3,111
          Escrow funds - coal contract litigation           6,5086,594       6,911
          Construction funds held by trustee               9,97910,108      18,553
          Accounts receivable                              36,08938,755      41,712
          Accrued utility revenues                         21,73424,855      24,227
          Fuel, principally coal, at average cost          35,90637,851      35,652
          Materials and supplies, at average cost          21,67022,123      20,081
          Other                                            11,00213,818      10,616
                                                          148,871158,196     160,863
        Investments, Deferred Charges and Other Assets:
          Unamortized loss on reacquired debt              12,06911,814      12,324
          Other                                            34,93335,006      34,996
                                                           47,00246,820      47,320
               Total Assets                            $1,615,909$1,632,324  $1,618,100

        CAPITALIZATION AND LIABILITIES
        Capitalization:
          Common stock equity                          $  567,776561,984  $  565,201
          Preferred stock                                  40,000      40,000
          Long-term debt                                  495,987545,984     496,012
                                                        1,103,7631,147,968   1,101,213
        Current Liabilities:
          Long-term debt due within one year                   21          21
          Short-term borrowings                            69,20045,000      76,300
          Accounts payable                                 31,27838,442      49,517
          Accrued interest                                  9,9387,499       7,328
          Accrued taxes                                    20,14714,159       9,422
          Customers' deposits                               6,4216,535       6,423
          Accrued payroll and vacations                     10,7189,194       8,207
          Liab. to ratepayers - coal contract litigation    6,5086,595       6,909
          Other                                             7,9566,317       6,275
                                                          162,187133,762     170,402
        Deferred Credits and Other Liabilities:
          Accumulated deferred income taxes               215,826216,893     214,892
          Accumulated deferred investment tax credits      37,25136,227      38,275
          Regulatory tax liability                         60,11959,482      60,788
          Other                                            36,76337,992      32,530
                                                          349,959350,594     346,485
               Total Capitalization and Liabilities    $1,615,909$1,632,324  $1,618,100


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

          Utilities Company  (KU) Annual Report  on Form 10-K for  the year

          ended December 31, 1994.1994 (1994 10K).

              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 KU's business.

          2.  OPERATING REVENUES AND FUEL COSTS

              Pursuant to  regulatory orders,  KU 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.



                                         -5--6-


                              KENTUCKY UTILITIES COMPANY
                            NOTES TO FINANCIAL STATEMENTS
                                     (Unaudited)


              Operating revenues  and  fuel  expense  for the three-month periodand six-month periods

          ended March 31,June 30, 1994 were  reduced by $.5$.4 million and $2.9$.9 million,

          respectively,  resulting from  the above-mentioned  refund.   The

          refunding had no impact on operating revenues orrefund  also  resulted in  a reduction  of  fuel expense  for the

          three-month  periodand  six-month   periods  ended  March 31, 1995.June 30,  1994   of

          $.4 million  and  $3.4 million,  respectively.    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.

          -6-3.  FINANCING

              In  June  1995,  KU  issued  $50 million  of  Series R  First

          Mortgage Bonds  which will mature June 1, 2025  and bear interest

          at 7.55%.  The  proceeds were used primarily to  refinance short-

          term  indebtedness  incurred   to  finance  ongoing  construction

          expenditures and general corporate requirements.

          4.  ENVIRONMENTAL COST RECOVERY

              In July 1994,  the Kentucky  Public Service Commission  (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 coal, including the 1990 Clean Air Act Amendments.

          KU's environmental  surcharge was implemented in  August 1994 and

          is described in  Item 1 of the 1994  10K.  The initial  six-month


                                         -7-


                              KENTUCKY UTILITIES COMPANY
                            NOTES TO FINANCIAL STATEMENTS
                                     (Unaudited)


          review and hearing process was completed  in June of 1995, and KU

          is  awaiting an  order  from the  PSC.   The  typical  customer's

          monthly  bill during  the  six-month review  period increased  by

          about 2% as a result of the surcharge.

              The constitutionality of the surcharge  was challenged in the

          Franklin County  (Kentucky) Circuit  Court (Circuit Court)  in an

          action brought against KU and the PSC by  the Attorney General of

          Kentucky and representatives of customer  groups.  In July  1995,

          the    Circuit    Court    entered   judgment    upholding    the

          constitutionality of the surcharge but vacating  that part of the

          PSC  order   allowing  KU   to  recover  costs   associated  with

          environmental expenditures  incurred before January 1,  1993, the

          effective date of the surcharge statute, and remanding to the PSC

          for  determination in accordance with the judgment.  On August 7,

          1995, KU filed a motion requesting the Circuit Court to amend its

          judgment  and sustain  the PSC  order  in its  entirety.   If the

          judgment is ultimately upheld as entered, KU estimates the amount

          it would  be required to refund for surcharge collections through

          June  1995 would be approximately  $4 million.  At  this time, KU

          cannot predict the outcome of this proceeding.





                                         -8-

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

          LIQUIDITY & RESOURCES

              KU's   construction  expenditures   decreased   approximately

          $12$35 million during  the  three-monthsix-month period  ending  March 31,June 30,  1995

          compared  to  the  same   period  of  1994.    The   decrease  is

          attributable  primarily

          attributable to planned reductions in expenditures for

          combustion turbine peaking units and for compliance with the 1990

          Clean Air Act Amendments.

              KU plansRefer to  issue upNote 3 of the  Notes to an  additional $50 millionFinancial  Statements for a

          discussion of long-

          term  debt  during  1995,  principally  to  refinance  short-term

          indebtedness.KU's financing activities.

          RESULTS OF OPERATIONS

          Quarter ended March 31,June 30, 1995, compared
          to the Quarter ended March 31,June 30, 1994

               Net Income  applicable to  common stock  for the  three-month

          period  ended   June 30,   1995  was   $10 million  compared   to

          $13.9 million for the corresponding period of 1994.  The decrease

          reflects milder weather and a decline in off-system  sales during

          the second quarter of 1995 compared to 1994 as well as  increases

          in interest, depreciation and other operating expenses as further

          discussed below.










                                         -9-

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



                                                 Increase (Decrease)
                                                    From Prior Year
                                                    Three Months
                                                 Ended June 30, 1995
                                                 kWh        Revenues
                                                 (%)         (000's)

          Residential                             (2)       $    639
          Commercial                               1           1,376
          Industrial                               5           2,209
          Mine Power & Public Authorities         (1)            580
              Total Retail Sales                   1           4,804
          Other Electric Utilities               (25)         (5,007)
          Miscellaneous Revenues & Other           -             569
               Total Before Refund                (5)            366
          Provision for Refund -
            Litigation Settlement                  -             365
              Total                               (5)       $    731


              Operating  revenues, before  the  impact  of the  refunds  to

          customers during 1994, increased $.4 million. (Refer to Note 2 of

          the Notes  to Financial Statements, "Operating  Revenues and Fuel

          Costs", for a  discussion of the  refunds to customers  resulting

          from the resolution of a coal contract dispute and  the impact on

          1994 operating results). A 5% decrease in kilowatt-hour sales was

          offset   by  $4.3 million   recovered  under   the  environmental

          surcharge.    (Refer   to  Note 4  of  the   Notes  to  Financial

          Statements,  Environmental   Cost  Recovery,  for  an  update  of

          environmental  surcharge legal  proceedings.)    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 35% of the industrial sales increase was due

          to     greater    sales    to    Toyota    Motor    Manufacturing

                                         -10-

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

          U.S.A., Inc. (TMM), 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 second  quarter of  1995 compared  to

          1994.  However, KU set an all-time peak demand for electricity on

          July 14, 1995 of 3,250 megawatts.

              Fuel  expense,  excluding  the  effect   of  the  refunds  to

          customers, decreased $3.1 million (7%).  This decrease reflects a

          3% decrease in  tons of coal consumed as well as a 4% decrease in

          the  average price  per ton  of coal  consumed.   Purchased power

          expense increased  $1.3 million (8%)  due to increases  in demand

          ($1 million)  and energy costs ($.3 million).    A  6% decline in

          kilowatt-hour purchases, resulting from the  previously mentioned

          decline  in kilowatt-hour  sales,  was offset  by less  favorable

          pricing.

              Other operating expenses  increased by $2.5 million (9%)  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.

              Depreciation  expense increased  $2.6 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 $1.7 million (21%) reflecting the

          issuance of $54 million  of long-term debt in the  fourth quarter

          of 1994 and an increase in  the average amount of short-term debt

          outstanding compared to the corresponding quarter of 1994.

                                         -11-

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

              Federal   and   state   operating   income  taxes   decreased

          $2.3 million  (29%), primarily due to lower pre-tax income.

































                                         -12-

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

          Six Months ended June 30, 1995, compared
          to the Six Months ended June 30, 1994

              Net  income applicable  to  common  stock for  the  three-monthsix-month

          period  ending March  31,ended  June 30, 1995  was  $18.4$28.4 million  as compared  to

          $24.7$38.6 million for the corresponding period of 1994.  The decrease

          reflects milder weather and a  decline in off-system sales during

          the six-month period ending June 30, 1995 as compared to the same

          period in 1994 as well as increases in interest, depreciation and

          other operating expenses as further discussed below.   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-Costs."

                                                 Increase (Decrease)
                                                    From Prior Year
                                                      Six Months
                                                 Ended June 30, 1995
                                                 kWh        Revenues
                                                 (%)         (000's)

          Residential                             (4)        $  (616)
          Commercial                               -           2,436
          Industrial                               5           4,508
          Mine Power & Public Authorities         (2)          1,246
              Total Retail Sales                  (1)          7,574
          Other Electric Utilities               (23)         (7,484)
          Miscellaneous Revenues & Other           -             359
               Total Before Refund                (5)            449
          Provision for Refund -
            Litigation Settlement                  -             902
              Total                               (5)       $  1,351


              Operating  revenues, before  the  impact  of the  refunds  to

          customers, increased $.4 million.  A 5% decrease in kilowatt-hour


                                         -13-

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

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

          Residential                             (6)       $ (1,255)
          Commercial                              (1)          1,060
          Industrial                               5           2,299
          Mine Power & Public Authorities         (2)            666
              Total Retail Sales                  (2)          2,770
          Other Electric Utilities               (21)         (2,477)
          Miscellaneous Revenues & Other           -            (210)
              Total Before Refund                 (5)             83
          Provision for Refund -
            Litigation Settlement                  -             537
              Total                               (5)       $    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$8.1 million   recovered   under   the

          environmental surcharge.    (Refer  to  Note 4 of  the  Notes  to

          Financial Statements, Environmental Cost Recovery, for  an update

          of environmental  surcharge discussed below (see  page 10).legal proceedings.)   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%33% of the industrial sales increase wasis due

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

          largest  customer.TMM.   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 ofsix-month  period ended  June 30,  1995  as

          compared to the same period of 1994.

              Fuel  expense,  excluding  the  effect   of  the  refunds  to

          customers, decreased $1.1$4.2 million (2%(5%).   This decrease primarily

          reflects a 6%4% decrease -8-


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

          in tons of coal consumed, partially offset by a 3% increase in

          the  average price  per ton of coal consumed.  Purchased power

          expense  decreased $.1increased $1.2 million (1%(4%) due to an increase in demand

          costs ($1.32.2 million) partially offset  by a decrease in kilowatt-hourkilowatt-

          hour  purchases  ($1.41.0 million).  The decrease  in  kilowatt-hour

          purchases is due to the previously mentioned decline in kilowatt-

          hour sales.

              Other operating expenses increased $3.9$6.4 million (15%(12%)  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.

                                         -14-

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

              Maintenance  expense increased  $.3$.9 million  (2%(3%)  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$5.1 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$3.3 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-the fourth quarter

          of 1994 and an increase in the average  amount of short-term debt

          outstanding.

              Federal  and   state   operating   income   taxes   decreased

          $6.4 million  (28%), primarily due to lower pre-tax income.


          CAPACITY REQUIREMENTS

              In   May  1995,  a   110-megawatt  (MW)   combustion  turbine

          generating unit, which was  placed in commercial operation during

          the  first quarter  of 1995, was  taken out  of service  due to a

          turbine blade problem.  In addition to this unit, KU has  decided

          not to  operate another similar combustion turbine unit placed in

          commercial operation  in  1994 and  has temporarily  discontinued

          testing  of  a  third   similar  unit  scheduled  for  commercial

          operation  later in 1995 until  the turbine blade  problem can be

          identified  and  corrected.     KU  is  currently  analyzing  the

                                         -15-

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

          the fourth quarter  of 1994.   The average  amount of  short-term

          debt   outstanding  during   the  first   quarter  of   1995  was

          substantially greater thansituation  in the first 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

          associatedcooperation  with the  production of energy from 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  constitutionalityvendor of  the surcharge  is  being   challenged  inthree  110 MW

          generating units.  Although KU cannot predict the Franklin  County

          (Kentucky) Circuit Court.  Management believes that the surcharge

          statute  is constitutional and the PSC approvaloutcome of July 1994this

          matter, KU does not  believe this will be upheld.have a  significant impact

          on  its results  of operations  or its  ability to  meet customer

          requirements.

































                                         -16-


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

          UTILITY ISSUES - COMPETITION

              In  March  1995,  the  Federal Energy  Regulatory  Commission

          (FERC) issued a Notice of Proposed Rulemaking (NOPR) by which the

          FERC will require public utilities that own or control facilities

          used  for  the  transmission  of electric  energy  in  interstate

          commerce  to  offer  "open  access"  transmission  service  on  a

          -10-


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

          nondiscriminatory 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.   The

          FERC expects to issue final rules by February 1996.

              KU  filed  a  Transmission Services  (TS)  Tariff  and  Power

          Services (PS) Tariff on September 30, 1994 (Refer(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 KU).  The FERC accepted

          the TS Tariff, subject to refund, effective December 1, 1994, but

          did not approve  the PS Tariff.   KU revised the  TS Tariff in  a

          filing made  on March 31,  1995 with  the FERC.FERC  in order  to meet

          certain provisions of the NOPR and reaffirmed its request for the

          market-based  PS Tariff.   On  May 31, 1995,  the FERC  issued an

          order which approved  the revised TS  Tariff, subject to  refund,

          and  approved the  PS Tariff  subject to  KU will complymaking  a compliance

          filing  which addressed certain aspects of the TS and PS Tariffs.

          On June 30, 1995, KU made the compliance filing with any requirements mandated by the FERC's final rules.FERC and

          the PS Tariff became effective on that date.

              Although KU  does not expect  either of these  new tariffs to

          have  a material impact on its  1995 revenues or income, they are

                                         -17-

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

          indicative of  the increasingly competitive environment  in which

          KU and other utilities operate.







































                                         -11--18-

                             PART II.  OTHER INFORMATION

                              KENTUCKY UTILITIES COMPANY

          ITEM 1.  LEGAL PROCEEDINGS

          ENVIRONMENTAL COST RECOVERY

             By  orderSee Note 4 of July  19,  1994,  the Kentucky  Public  Service

          Commission (PSC) approved KU's  planNotes to Financial Statements,  Environmental

          Cost  Recovery, for  an update  of environmental  surcharge adjustmentslegal

          proceedings.

          ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

             At  the April 25,  1995  Annual Meeting  of  Shareholders,  the

          following proposal was acted upon and approved.

             (1)   To elect three Directors 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 productionBoard 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.

             On September 9, 1994, the Attorney General of the  CommonwealthDirectors 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 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  the surcharge  statute is constitutional  and 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.



          FUEL MATTERS

             A  former  coal  supplier  of  KU  has  initiated   arbitration

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

          reclamation  costs claimed  to have  been 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 invoicesUtilities Company.

                                                      Votes
                                           Votes 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  claims  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 claims for on-going and final reclamation.

          Although the total amount of the claims 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 Fuel

          Adjustment Clause.


                                         -13-
Withheld

             William B. Bechanan           37,817,878    0
             Harry M. Hoe                  37,817,878    0
             Michael R. Whitley            37,817,878    0


          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      Computation4    Supplemental Indenture dated June 1,  1995 between
                         Kentucky  Utilities  Company and  Bank  of RatioAmerica
                         Illinois  and  Robert  J.  Donahue,  as  Trustees,
                         providing for  First  Mortgage Bonds  Series R  of
                         Earnings to Fixed Charges.Kentucky Utilities Company.

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

             (b) Reports on Form 8-K.

                 None.

                                         -14--19-




                              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     May 8,August 9, 1995               /s/ John T. Newton
                                                John T. NewtonMichael R. Whitley
                                                Michael R. Whitley
                                                Chairman of the Board and
                                                Chief Executive Officer






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






                                         -15--20-