**Exhibit12**

Louisville Gas andElectric Company

Computation ofRatio of Earnings to Fixed Charges

(Millions of $)
| ** **                                             | ** ** | **2006** | ** ** | **2005** | ** ** | **2004** | ** ** | **2003** | ** ** | **2002** | ** ** |
|--------------------------------------------------------|------------|----------|------------|----------|------------|----------|------------|----------|------------|----------|------------|
| Earnings:                                              |       |     |       |     |       |     |       |     |       |     |       |
| Net Income                                             |       | $        | 117        |     | $          | 129      |       | $        | 96         |     | $          | 91 |   | $ | 89 |   |
|                                                   |       |     |       |     |       |     |       |     |       |     |       |
| Add:                                                   |       |     |       |     |       |     |       |     |       |     |       |
| Federal income  taxes — current                   |       | 60       |       | 73       |       | 34       |       | 26       |       | 25       |       |
| State income  taxes — current                     |       | 11       |       | 10       |       | 13       |       | 10       |       | 8        |       |
| Deferred Federal  income taxes — net              |       | (7       | )          | (12      | )          | 11       |       | 17       |       | 20       |       |
| Deferred State  income taxes — net                |       | (1       | )          | (2       | )          | (1       | )          | 1        |       | 4        |       |
| Investment tax  credit — net                      |       | (1       | )          | (4       | )          | (4       | )          | (4       | )          | (4       | )          |
| Fixed charges                                          |       | 43       |       | 38       |       | 34       |       | 31       |       | 30       |       |
| Earnings                                               |       | $        | 222        |     | $          | 232      |       | $        | 183        |     | $          | 172 |   | $ | 172 |   |
|                                                   |       |     |       |     |       |     |       |     |       |     |       |
| Fixed Charges:                                         |       |     |       |     |       |     |       |     |       |     |       |
| Interest charges  per statements of income             |       | $        | 41         |     | $          | 37       |       | $        | 33         |     | $          | 31 |   | $ | 30 |   |
| Add:                                                   |       |     |       |     |       |     |       |     |       |     |       |
| One-third of  rentals charged to operating expense (1) |       | 2        |       | 1        |       | 1        |       | —   |       | —   |       |
| Fixed charges                                          |       | $        | 43         |     | $          | 38       |       | $        | 34         |     | $          | 31 |   | $ | 30 |   |
| Ratio of Earnings to Fixed Charges                     |       | 5.16     |       | 6.11     |       | 5.38     |       | 5.55     |       | 5.73     |       |

----

NOTE:  (1) In the Company’s opinion, one-third ofrentals represents a reasonable approximation of the interest factor.

1

----