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  June 30, 1995March 31, 1996

                       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  August 9,  1995:May 2, 1996:
        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
                                                              June 30,March 31,
                                                            1996      1995       1994


        Operating Revenues                                (See Note 2)                   $154,757  $154,026$190,996  $167,148

        Operating Expenses:
          Fuel, principally coal,
           used in generation                               (See Note 2)                        40,679    43,37254,025    45,706
          Electric power purchased                          17,631    16,35617,504    15,777
          Other operating expenses                          30,127    27,64529,688    30,598
          Maintenance                                       19,493    18,89314,202    14,856
          Depreciation                                      18,785    16,15120,018    18,701
          Federal and state income taxes                    5,634     7,93316,336    10,634
          Other taxes                                        4,125     3,6424,235     4,314

               Total Operating Expenses                    136,474   133,992156,008   140,586

        Net Operating Income                                18,283    20,03434,988    26,562

        Other Income and Deductions:
          Interest and dividend income                         803       766613       633
          Other income and deductions - net                  1,376     1,8752,100     1,480

               Total Other Income and Deductions             2,179     2,6412,713     2,113

        Income Before Interest Charges                      20,462    22,67537,701    28,675

        Interest Charges                                    9,901     8,20210,198     9,747

        Net Income                                          10,561    14,47327,503    18,928

        Preferred Stock Dividend Requirements                  564       564

        Net Income Applicable to Common Stock             $ 9,99726,939  $ 13,90918,364



          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 SixThree
                                                              Months Ended
                                                               June 30,March 31,
                                                            1996       1995

        1994Cash Flows from Operating Revenues (See Note 2)                   $321,905  $320,554Activities:

          Net Income                                      $ 27,503   $ 18,928
          Items not requiring (providing) cash currently:
            Depreciation                                    20,018     18,701
            Deferred income taxes
              and investment tax credit                       (352)      (630)
            Changes in current assets and liabilities:
              Change in fuel inventory                       4,127       (254)
              Change in accounts receivable                  1,508      5,623
              Change in accounts payable                    (2,455)   (18,239)
              Change in accrued taxes                       15,300     10,725
              Change in accrued utility revenues             2,704      2,493
            Other--net                                       9,665      8,570

        Net Cash Provided by Operating Expenses:
          Fuel, principally coal, usedActivities           78,018     45,917

        Cash Flows from Investing Activities:

          Construction expenditures - utility              (21,105)   (28,035)
          Other                                                201         10

        Cash Used by Investing Activities                  (20,904)   (28,025)

        Cash Flows from Financing Activities:
          Short-term borrowings - net                      (40,200)    (7,100)
          Issuance of long-term debt                        35,710       (146)
          Funds deposited with trustee - net                 1,500      8,600
          Retirement of long-term debt, incl. premiums     (36,192)       (21)
          Payment of dividends                             (16,826)   (16,353)

        Net Cash Used by Financing Activities              (56,008)   (15,020)

        Net Increase 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                                      37,486    32,338Cash and Cash Equivalents            1,106      2,872

        Cash and Cash Equivalents Beginning of Period        5,697      3,111

        Cash and Cash Equivalents End of Period           $  6,803  $   5,983

        Supplemental Disclosures
        Cash paid for:
          Interest on short- and long-term debt           $  6,294  $   6,475
          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$  2,753  $       - 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 FLOWSBALANCE SHEETS
                                     (Unaudited)
                              (in thousands of dollars)

                                                        For the Six Months
                                                             Ended June 30,As of       As of
                                                      March 31,    Dec. 31,
                                                         1996        1995

        1994ASSETS
        Utility Plant:
          Plant in service, at cost                   $2,401,414  $2,394,018
          Less: Accumulated depreciation               1,015,733     997,366
                                                       1,385,681   1,396,652
          Construction work in progress                   72,775      61,410
                                                       1,458,456   1,458,062
        Current Assets:
          Cash Flows from Operating Activities:

          Net Incomeand cash equivalents                        6,803       5,697
          Escrow funds - coal contract litigation          6,599       6,599
          Construction funds held by trustee               2,270       3,743
          Accounts receivable                             47,963      49,471
          Accrued utility revenues                        25,196      27,900
          Fuel, principally coal, at average cost         25,311      29,438
          Materials and supplies, at average cost         23,547      23,064
          Other                                            8,471       8,121
                                                         146,160     154,033
        Investments, Deferred Charges and Other Assets:
          Unamortized loss on reacquired debt             11,640      11,304
          Other                                           37,615      36,589
                                                          49,255      47,893
               Total Assets                           $1,653,871  $1,659,988

        CAPITALIZATION AND LIABILITIES
        Capitalization:
          Common stock equity                         $  29,489587,214  $  39,817
          Items not requiring (providing) cash currently:
            Depreciation                                    37,486    32,338576,537
          Preferred stock                                 40,000      40,000
          Long-term debt                                 546,373     545,980
                                                       1,173,587   1,162,517
        Current Liabilities:
          Long-term debt due within one year                  21          21
          Short-term borrowings                           15,400      55,600
          Accounts payable                                35,545      38,000
          Accrued interest                                10,695       7,556
          Accrued taxes                                   20,501       5,201
          Customers' deposits                              7,245       6,876
          Accrued payroll and vacations                   11,177       8,706
          Liab. to ratepayers - coal contract litigation   6,599       6,599
          Other                                            8,697       6,752
                                                         115,880     135,311
        Deferred Credits and Other Liabilities:
          Accumulated deferred income taxes              and233,158     231,717
          Accumulated deferred investment tax credit (1,097)   (3,342)
            Changes in current assetscredits     33,177      34,180
          Regulatory tax liability                        56,806      57,726
          Other                                           41,263      38,537
                                                         364,404     362,160
               Total Capitalization 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  $ 25,378Liabilities   $1,653,871  $1,659,988


          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
                                                        June 30,    Dec. 31,
                                                          1995        1994
        ASSETS
        Utility Plant:
          Plant in service, at cost                    $2,286,014  $2,238,926
          Less: Accumulated depreciation                  970,974     933,394
                                                        1,315,040   1,305,532
          Construction work in progress                   112,268     104,385
                                                        1,427,308   1,409,917
        Current Assets:
          Cash and cash equivalents                         4,092       3,111
          Escrow funds - coal contract litigation           6,594       6,911
          Construction funds held by trustee               10,108      18,553
          Accounts receivable                              38,755      41,712
          Accrued utility revenues                         24,855      24,227
          Fuel, principally coal, at average cost          37,851      35,652
          Materials and supplies, at average cost          22,123      20,081
          Other                                            13,818      10,616
                                                          158,196     160,863
        Investments, Deferred Charges and Other Assets:
          Unamortized loss on reacquired debt              11,814      12,324
          Other                                            35,006      34,996
                                                           46,820      47,320
               Total Assets                            $1,632,324  $1,618,100

        CAPITALIZATION AND LIABILITIES
        Capitalization:
          Common stock equity                          $  561,984  $  565,201
          Preferred stock                                  40,000      40,000
          Long-term debt                                  545,984     496,012
                                                        1,147,968   1,101,213
        Current Liabilities:
          Long-term debt due within one year                   21          21
          Short-term borrowings                            45,000      76,300
          Accounts payable                                 38,442      49,517
          Accrued interest                                  7,499       7,328
          Accrued taxes                                    14,159       9,422
          Customers' deposits                               6,535       6,423
          Accrued payroll and vacations                     9,194       8,207
          Liab. to ratepayers - coal contract litigation    6,595       6,909
          Other                                             6,317       6,275
                                                          133,762     170,402
        Deferred Credits and Other Liabilities:
          Accumulated deferred income taxes               216,893     214,892
          Accumulated deferred investment tax credits      36,227      38,275
          Regulatory tax liability                         59,482      60,788
          Other                                            37,992      32,530
                                                          350,594     346,485
               Total Capitalization and Liabilities    $1,632,324  $1,618,100


          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

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

          ended December 31, 1994 (1994 10K).1995.

              In  the  opinion  of management,  the  information  furnished

          herein  reflects all  adjustments, all  of which  are normal  and

          recurring, 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.misleading.   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,ENVIRONMENTAL COST RECOVERY

              Since August  1994, KU has  been refunding  fuel

          cost savings  related  to  the  resolution  of  a  coal  contract

          dispute.  Refunds tocollecting an  environmental

          surcharge  from its  Kentucky retail  customers commenced in July

          1994.   Refunds were madeunder  a Kentucky

          statute which  authorizes electric  utilities  (including KU)  to

          Virginia retail customers during the

          period  Augustimplement, beginning January 1, 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.



                                         -6-


                              KENTUCKY UTILITIES COMPANY
                            NOTES TO FINANCIAL STATEMENTS
                                     (Unaudited)


              Operating revenues  for the three-month and six-month periods

          ended June 30, 1994 were  reduced by $.4 million and $.9 million,

          respectively,  resulting from  the above-mentioned  refund.   The

          refund  also  resulted in  a reduction  of  fuel expense  for the

          three-month  and  six-month   periods  ended  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.

          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 toof  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--5-


                              KENTUCKY UTILITIES COMPANY
                            NOTES TO FINANCIAL STATEMENTS
                                     (Unaudited)


          reviewenergy from coal, including the Federal Clean Air Act as amended.

          KU's environmental surcharge was  approved by the Kentucky Public

          Service  Commission (PSC)  in July  1994 and  hearing process was completedimplemented  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.August 1994.

              The   constitutionality   of   the   surcharge  statute   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 joined by  representatives of customerconsumer  groups.  In

          July  1995, the  Circuit Court  entered a judgment  upholding the

          constitutionality of the statute,  but vacating that part  of the

          PSC's July 1994 order which the judgment describes as allowing KU

          to  recover,  under  the  surcharge,  environmental  expenditures

          incurred before  January 1, 1993, and ordering  the case remanded

          to the PSC for determination in accordance with the Circuit Court

          judgment.

              The  Attorney  General  and  other  consumer  representatives

          appealed  to the  Kentucky  Court of  Appeals  that part  of  the

          Circuit  Court judgment  upholding the  constitutionality of  the

          surcharge  but vacatingstatute.   The PSC  and KU appealed  that part  of the

          judgment denying recovery of environmental  expenditures incurred

          before  January 1, 1993.  On August 22, 1995, the PSC order   allowingordered all

          surcharge revenues  collected by  KU  from that  date subject  to

          recoverrefund pending final determination of all appeals.  In March 1996

          in  the semi-annual  reconciliation review,  the PSC  ordered all

          surcharge  revenues collected  during the  six-month period  then

          under review (February 1, 1995 through July  31, 1995) subject to


                                         -6-


                              KENTUCKY UTILITIES COMPANY
                            NOTES TO FINANCIAL STATEMENTS
                                     (Unaudited)


          refund pending final  determination of  all appeals.   The  total

          surcharge collections  from  February 1, 1995  through  March 31,

          1996 were approximately $22 million.

              KU believes  the constitutionality  of the surcharge  statute

          will be upheld, but it cannot predict the outcome of that part of

          the Circuit Court judgment disallowing recovery  of environmental

          expenditures  incurred before  January 1, 1993.   If  the Circuit

          Court judgment is ultimately upheld as entered, KU estimates that

          the amount it would be required  to refund (which is based solely

          on  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 refund1993)  for   surcharge  collections  through

          JuneMarch 31, 1996, from the implementation of the surcharge would be

          approximately $7 million,  and  from February 1,  1995  would  be

          approximately  $4$5 million.  At this time, KU cannot predicthas not recorded any

          reserve for refund.



          3.  FINANCING

              In  January 1996,  KU issued  $36 million  of Series S  First

          Mortgage  Bonds  which  will  mature January 15,  2006  and  bear

          interest  at   5.99%.     The  proceeds  were   used  to   redeem

          $35.5 million  of Series K  First Mortgage  Bonds.   A redemption

          premium of approximately $.7 million  was recorded on the outcomebalance

          sheet  and will  be amortized  over the  period to  the scheduled

          maturity of this proceeding.





                                         -8-the new bonds.




                                         -7-


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



          LIQUIDITY & RESOURCES

              At  March 31,   1996,   KU's   short-term   borrowings   were

          $15.4 million compared  to  $55.6 million at  December 31,  1995.

          The  short-term borrowings  have been  used primarily  to finance

          ongoing   construction   expenditures   decreased   approximately

          $35 million during  the  six-month period  ending  June 30,  1995

          compared  to  the  same   period  of  1994.and   general   corporate

          requirements.     The  decrease  is  attributabledue   primarily  to  planned

          reductions  in  construction  expenditures  for

          combustion turbine peaking units and  for compliance withadditional  cash

          provided by operations during the 1990

          Clean Air Act Amendments.first quarter of 1996.

              Refer to  Note 3 of the  Notes to Financial  Statements for a

          discussion of KU's recent financing activities.



          RESULTS OF OPERATIONS

          Quarter ended June 30, 1995,March 31, 1996, compared
          to the Quarter ended June 30, 1994March 31, 1995

              Net Incomeincome  applicable to  common stock  for the  three-month

          period  ended   June 30,   1995March 31,  1996  was  $10$26.9 million  compared  to

          $13.9$18.4 million for the corresponding period of 1994.1995.  The decreaseincrease

          primarily  reflects milderthe  positive effects  of colder  weather and

          a decline in off-systemincreased  opportunity sales  during  the secondfirst  quarter of  19951996

          compared to 1994 as well as1995.   The  positive effects of  these factors  were

          somewhat offset by increases in  interest, depreciationfuel and other operating expensespurchased power expense

          as further discussed below.




                                         -9--8-


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



                                                  Increase (Decrease)
                                                    From Prior Year
                                                     Three Months
                                                 Ended June 30, 1995March 31, 1996
                                                 kWh        Revenues
                                                 (%)         (000's)

          Residential                             (2)13        $  6398,186
          Commercial                               1           1,3765           2,018
          Industrial                              5           2,20910           3,134
          Mine Power & Public Authorities          (1)            5803             907
              Total Retail Sales                   1           4,8049          14,245
          Wholesale                                5             773
          Opportunity                            405           7,920
              Total Other Electric Utilities      (25)         (5,007)89           8,693
          Miscellaneous Revenues & Other           -             569910
              Total                               Before Refund                (5)            366
          Provision for Refund -
            Litigation Settlement                  -             365
              Total                               (5)19        $ 73123,848


              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$23.8 million  (14%).     The

          increase reflects  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% decrease19%  increase 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.)sales.   The

          decreaseincrease in  kilowatt-hour  sales is  primarily  attributable  to

          a  declineincreases in residential, industrial  and off-system  sales,  partially   offset  by  anopportunity sales.  The

          increase  in  industrial  sales.opportunity  sales   (525,495 megawatt-hours versus

          104,148 megawatt-hours) is primarily due to Non-Firm energy sales

          agreements with two neighboring utilities for the year 1996.  The

          increase in industrial  sales reflects  continued  economic growth

          in the manufacturing sector of KU's service area.  About 35%area evidenced primarily

          by a 6% increase in  the number of industrial customers  over 1995.

          The increase in residential sales was primarily due to colder weather

          in the industrial salesfirst quarter of 1996  compared to  1995.  KU  set an  all-time

          peak demand  for  electricity on February 5, 1996 of 3,391 megawatts.

              Fuel expense increased $8.3 million (18%).   The increase was

          primarily due to  greater    sales    to    Toyota    Motor    Manufacturing

                                         -10-a 20% increase  in the  tons of coal  consumed,


                                         -9-


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

          U.S.A., Inc. (TMM), KU's largest customer.which was primarily caused  by a 19% increase in generation.  The

          decreaseincrease in off-

          system sales is attributable to a decreaseconsumption  resulted from  the previously  mentioned

          increase  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.kilowatt-hour  sales.    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  six-month

          period  ended  June 30, 1995  was  $28.4 million  as compared  to

          $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."

                                                 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

          sales   was   offset   by  $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 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 33% of the industrial sales increase is due

          to greater sales  to 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  six-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 $4.2 million (5%).   This decrease primarily

          reflects a 4% decrease in tons of coal consumed.  Purchased power

          expense  increased $1.2 million (4%(11%) due to an increase in demand

          costsenergy charges

          ($2.22.0 million) partially offset  slightly by  a decrease in  kilowatt-

          hour  purchasesdemand charges

          ($1.0.3 million).    The decreaseincrease  in  energy costs  reflects  a 10%

          increase in kilowatt-hour purchases is due to the previously mentioned decline in kilowatt-

          hour sales.

              Other operating expensespurchases.

              Federal and state income taxes  increased $6.4$5.7 million (12%(54%).

          The increase was primarily 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  $.9 million  (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  $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 $3.3 million  (20%) 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.

              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

          situation  in cooperation  with the  vendor of  the three  110 MW

          generating units.  Although KU cannot predict the outcome of this

          matter, KU does not  believe this will 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

          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 (referRefer to  Management's Discussion  and Analysis  in the  19941995

          Annual  Report on Form 10-K  under the heading  "Utility Issues -

          Competition" for  a discussion  of the TS TariffFederal  Energy Regulatory

          Commission's (FERC) proposed rules  addressing  open  access trans-

          mission service 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  in order  to meet

          certain provisionscollection of the NOPR and reaffirmed its requestcharges  for the  market-based  PS Tariff.   On  May 31, 1995,recovery of

          stranded costs. In late April 1996, the FERC issued an

          order which approvedtwo final rules

          and  a  Notice  of Proposed  Rulemaking (NOPR).  FERC Order  No. 888

          addresses  both open  access  and stranded cost  issues.  FERC Order

          No. 889  requires utilities to establish electronic systems to share

          information about available transmission capacity. It also establishes

          standards of conduct.  The NOPR proposes to establish a new system for

          utilities to use  in  reserving  capacity on  their  own and  other's

          transmission lines.  KU is currently evaluating the revised TS  Tariff, subject to  refund,

          and  approved the  PS Tariff  subject to  KU making  a compliance

          filing  which addressed certain aspectsimpacts of the

          TS and PS Tariffs.

          On June 30, 1995, KU made the compliance filing with the FERCfinal rules  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.







































                                         -18-NOPR.


                                         -10-


                             PART II.  OTHER INFORMATION

                              KENTUCKY UTILITIES COMPANY



          ITEM 1.  LEGAL PROCEEDINGS

                 ENVIRONMENTAL COST RECOVERY

             See   Note 42  of  the   Notes  to   Financial  Statements,

          Environmental   Cost   Recovery,   for   an updatea   discussion   of  the

          environmental surcharge legal

          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 the Board of Directors of

                  Kentucky Utilities Company.

                                                      Votes
                                           Votes for  Withheld

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



          ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

             (a) Exhibits.

                 The following exhibits areexhibit is filed as part of this report:

                 Exhibit
                 Number                    Description



                    4    Supplemental Indenture dated June 1,  1995 between
                         Kentucky  Utilities  Company and  Bank  of America
                         Illinois  and  Robert  J.  Donahue,  as  Trustees,
                         providing for  First  Mortgage Bonds  Series R  of
                         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.

                                         -19-(1)  KU filed a  Form 8-K dated January 18, 1996 to report

                      certain  financial   information  included   in   the

                      Prospectus  dated January 18,  1996 for  its Series S

                      First Mortgage Bonds.









                                         -11-



                              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   August 9, 1995May 2, 1996                    /s/ Michael R. Whitley
                                                Michael R. Whitley
                                                Chairman of the Board and Chief Executive OfficerPresident




          Date   August 9, 1995May 2, 1996                    /s/ Michael D. Robinson
                                                Michael D. Robinson
                                                Controller






                                         -20--12-