**EXHIBIT 12**

 

LOUISVILLEGAS AND ELECTRIC COMPANY

COMPUTATIONOF RATIO OF EARNINGS TO FIXED CHARGES

(Millionsof $)

 
| ** **                                             | ** ** | **2005** | ** ** | **2004** | ** ** | **2003** | ** ** | **2002** | ** ** | **2001** | ** ** |
|--------------------------------------------------------|------------|----------|------------|----------|------------|----------|------------|----------|------------|----------|------------|
|                                                   |       |     |       |     |       |     |       |     |       |     |       |
| Earnings:                                              |       |     |       |     |       |     |       |     |       |     |       |
| Net Income                                             |       | $        | 128.9      |     | $          | 95.6     |       | $        | 90.8       |     | $          | 88.9 |   | $ | 106.8 |   |
|                                                   |       |     |       |     |       |     |       |     |       |     |       |
| Add:                                                   |       |     |       |     |       |     |       |     |       |     |       |
| Federal  income taxes - current                        |       | $        | 73.2       |     | $          | 33.9     |       | $        | 25.8       |     | $          | 24.6 |   | $ | 41.1 |   |
| State income  taxes - current                          |       | $        | 10.1       |     | $          | 13.0     |       | $        | 10.0       |     | $          | 7.7 |   | $ | 8.2 |   |
| Deferred  Federal income taxes - net                   |       | $        | (12.6      | )        | $          | 11.4     |       | $        | 16.8       |     | $          | 20.3 |   | $ | 12.6 |   |
| Deferred  State income taxes - net                     |       | $        | (1.7       | )        | $          | (0.8     | )          | $        | 1.7        |     | $          | 4.4 |   | $ | 3.8 |   |
| Investment  tax credit - net                           |       | $        | (4.1       | )        | $          | (4.2     | )          | $        | (4.2       | )        | $          | (4.2 | ) | $ | (4.3 | ) |
| Fixed  charges                                         |       | $        | 37.8       |     | $          | 33.7     |       | $        | 31.4       |     | $          | 30.5 |   | $ | 38.8 |   |
| Earnings                                               |       | $        | 231.6      |     | $          | 182.6    |       | $        | 172.3      |     | $          | 172.2 |   | $ | 207.0 |   |
|                                                   |       |     |       |     |       |     |       |     |       |     |       |
| Fixed  Charges:                                        |       |     |       |     |       |     |       |     |       |     |       |
| Interest  Charges per statements of income             |       | $        | 36.8       |     | $          | 32.8     |       | $        | 30.7       |     | $          | 29.8 |   | $ | 37.9 |   |
| Add:                                                   |       |     |       |     |       |     |       |     |       |     |       |
| One-third of  rentals charged to operating expense (1) |       | $        | 1.0        |     | $          | 0.9      |       | $        | 0.7        |     | $          | 0.7 |   | $ | 0.9 |   |
| Fixed  charges                                         |       | $        | 37.8       |     | $          | 33.7     |       | $        | 31.4       |     | $          | 30.5 |   | $ | 38.8 |   |
|                                                   |       |     |       |     |       |     |       |     |       |     |       |
| Ratio of  Earnings to Fixed Charges                    |       | 6.13     |       | 5.42     |       | 5.49     |       | 5.65     |       | 5.34     |       |

 

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NOTE:

 

(1)          In the Company’s opinion, one-third of rentals represents a reasonableapproximation of the interest factor.

 

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KENTUCKYUTILITIES COMPANY

COMPUTATIONOF RATIO OF EARNINGS TO FIXED CHARGES

(Millionsof $)

 
| ** **                                             | ** ** | **2005** | ** ** | **2004** | ** ** | **2003** | ** ** | **2002** | ** ** | **2001** | ** ** |
|--------------------------------------------------------|------------|----------|------------|----------|------------|----------|------------|----------|------------|----------|------------|
|                                                   |       |     |       |     |       |     |       |     |       |     |       |
| Earnings:                                              |       |     |       |     |       |     |       |     |       |     |       |
| Net Income                                             |       | 112.1    |       | 133.5    |       | 91.4     |       | 93.4     |       | 96.3     |       |
|                                                   |       |     |       |     |       |     |       |     |       |     |       |
| Add:                                                   |       |     |       |     |       |     |       |     |       |     |       |
| Federal  income taxes - current                        |       | 56.8     |       | 39.3     |       | 29.1     |       | 37.8     |       | 57.4     |       |
| State income  taxes - current                          |       | 10.6     |       | 17.7     |       | 11.4     |       | 10.3     |       | 13.2     |       |
| Deferred  Federal income taxes - net                   |       | (1.9     | )          | 22.0     |       | 11.4     |       | 3.5      |       | (12.1    | )          |
| Deferred  State income taxes - net                     |       | 0.2      |       | (0.5     | )          | 0.9      |       | 1.5      |       | (1.1     | )          |
| Investment  tax credit - net                           |       | (1.7     | )          | (2.1     | )          | (2.7     | )          | (2.9     | )          | (3.5     | )          |
| Undistributed  income of Electric Energy, Inc          |       | (2.3     | )          | (2.6     | )          | (3.7     | )          | (7.0     | )          | 0.3      |       |
| Fixed  charges                                         |       | 32.1     |       | 26.4     |       | 25.9     |       | 26.7     |       | 35.2     |       |
| Earnings                                               |       | 205.9    |       | 233.7    |       | 163.7    |       | 163.3    |       | 185.7    |       |
|                                                   |       |     |       |     |       |     |       |     |       |     |       |
| Fixed  Charges:                                        |       |     |       |     |       |     |       |     |       |     |       |
| Interest  Charges per statements of income             |       | 31.0     |       | 25.5     |       | 25.2     |       | 25.7     |       | 34.0     |       |
| Add:                                                   |       |     |       |     |       |     |       |     |       |     |       |
| One-third of  rentals charged to operating expense (1) |       | 1.1      |       | 0.9      |       | 0.7      |       | 1.0      |       | 1.2      |       |
| Fixed  charges                                         |       | 32.1     |       | 26.4     |       | 25.9     |       | 26.7     |       | 35.2     |       |
|                                                   |       |     |       |     |       |     |       |     |       |     |       |
| Ratio of  Earnings to Fixed Charges                    |       | 6.41     |       | 8.85     |       | 6.32     |       | 6.12     |       | 5.28     |       |

 

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NOTE:

 

(1)          In the Company’s opinion, one-third of rentals represents a reasonableapproximation of the interest factor.

 

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