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Revenue from Contracts with Customers
 12 Months Ended
Dec. 31, 2020
Revenue from Contract with Customer [Abstract]  
Revenue from Contract with Customer
(All Registrants)

The following is a description of the principal activities from which the Registrants and PPL’s segments generate their revenues.

(PPL)

U.K. Regulated Segment Revenue

The U.K. Regulated Segment generates revenues from contracts with customers primarily from WPD’s DUoS operations.

DUoS revenues result from WPD charging licensed third-party energy suppliers for their use of WPD’s distribution systems to deliver energy to their customers. WPD satisfies its performance obligation and DUoS revenue is recognized over-time as electricity is delivered. The amount of revenue recognized is based on actual and forecasted volumes of electricity delivered during the period multiplied by a per-unit energy tariff, plus fixed charges. This method of recognition fairly presents WPD's transfer of electric service to the customer as the calculation is based on volumes, and the tariff rate is set by WPD using a methodology prescribed by Ofgem. Customers are billed monthly and outstanding amounts are typically due within 14 days of the invoice date.

DUoS customers are “at will” customers of WPD with no term contract and no minimum purchase commitment. Performance obligations are limited to the service requested and received to date. Accordingly, there is no unsatisfied performance obligation associated with WPD’s DUoS contracts.

(PPL and PPL Electric)

Pennsylvania Regulated Segment Revenue

The Pennsylvania Regulated Segment generates substantially all of its revenues from contracts with customers from PPL Electric’s tariff-based distribution and transmission of electricity.

Distribution Revenue

PPL Electric provides distribution services to residential, commercial, industrial, municipal and governmental end users of energy. PPL Electric satisfies its performance obligation to its distribution customers and revenue is recognized over-time as electricity is delivered and simultaneously consumed by the customer. The amount of revenue recognized is the volume of electricity delivered during the period multiplied by the price per tariff, plus a monthly fixed charge. This method of recognition fairly presents PPL Electric's transfer of electric service to the customer as the calculation is based on actual volumes, and the
price per tariff and the monthly fixed charge are set by the PUC. Customers are typically billed monthly and outstanding amounts are normally due within 21 days of the date of the bill.

Distribution customers are "at will" customers of PPL Electric with no term contract and no minimum purchase commitment. Performance obligations are limited to the service requested and received to date. Accordingly, there is no unsatisfied performance obligation associated with PPL Electric’s retail account contracts.

Transmission Revenue

PPL Electric generates transmission revenues from a FERC-approved PJM Open Access Transmission Tariff. An annual revenue requirement for PPL Electric to provide transmission services is calculated using a formula-based rate. This revenue requirement is converted into a daily rate (dollars per day). PPL Electric satisfies its performance obligation to provide transmission services and revenue is recognized over-time as transmission services are provided and consumed. This method of recognition fairly presents PPL Electric's transfer of transmission services as the daily rate is set by a FERC approved formula-based rate. PJM remits payment on a weekly basis.

PPL Electric's agreement to provide transmission services contains no minimum purchase commitment. The performance obligation is limited to the service requested and received to date. Accordingly, PPL Electric has no unsatisfied performance obligations.

(PPL, LKE, LG&E and KU)

Kentucky Regulated Segment Revenue

The Kentucky Regulated Segment generates substantially all of its revenues from contracts with customers from LG&E's and KU's regulated tariff-based sales of electricity and LG&E's regulated tariff-based sales of natural gas.

LG&E and KU are engaged in the generation, transmission, distribution and sale of electricity in Kentucky and, in KU's case, Virginia. LG&E also engages in the distribution and sale of natural gas in Kentucky. Revenue from these activities is generated from tariffs approved by applicable regulatory authorities including the FERC, KPSC and VSCC. LG&E and KU satisfy their performance obligations upon LG&E's and KU's delivery of electricity and LG&E's delivery of natural gas to customers. This revenue is recognized over-time as the customer simultaneously receives and consumes the benefits provided by LG&E and KU. The amount of revenue recognized is the billed volume of electricity or natural gas delivered multiplied by a tariff rate per-unit of energy, plus any applicable fixed charges or additional regulatory mechanisms. Customers are billed monthly and outstanding amounts are typically due within 22 days of the date of the bill. Additionally, unbilled revenues are recognized as a result of customers' bills rendered throughout the month, rather than bills being rendered at the end of the month. Unbilled revenues for a month are calculated by multiplying an estimate of unbilled kWh or Mcf delivered but not yet billed by the estimated average cents per kWh or Mcf. Any difference between estimated and actual revenues is adjusted the following month when the previous unbilled estimate is reversed and actual billings occur. This method of recognition fairly presents LG&E's and KU's transfer of electricity and LG&E's transfer of natural gas to the customer as the amount recognized is based on actual and estimated volumes delivered and the tariff rate per-unit of energy and any applicable fixed charges or regulatory mechanisms as set by the respective regulatory body.

LG&E's and KU's customers generally have no minimum purchase commitment. Performance obligations are limited to the service requested and received to date. Accordingly, there is no unsatisfied performance obligation associated with these customers.
(All Registrants)

The following table reconciles "Operating Revenues" included in each Registrant's Statement of Income with revenues generated from contracts with customers for the years ended December 31:
2020
PPLPPL ElectricLKELG&EKU
Operating Revenues (a)$7,607 $2,331 $3,106 $1,456 $1,690 
Revenues derived from:
Alternative revenue programs (b)(24)(12)(12)(8)(4)
Other (c)(27)(3)(17)(7)(10)
Revenues from Contracts with Customers$7,556 $2,316 $3,077 $1,441 $1,676 
2019
PPLPPL ElectricLKELG&EKU
Operating Revenues (a)$7,769 $2,358 $3,206 $1,500 $1,740 
Revenues derived from:
Alternative revenue programs (b)(30)(6)(24)(10)(14)
Other (c)(38)(10)(21)(9)(12)
Revenues from Contracts with Customers$7,701 $2,342 $3,161 $1,481 $1,714 
2018
PPLPPL ElectricLKELG&EKU
Operating Revenues (a)$7,785 $2,277 $3,214 $1,496 $1,760 
Revenues derived from:
Alternative revenue programs (b)32 (6)38 12 26 
Other (c)(38)(12)(17)(5)(12)
Revenues from Contracts with Customers$7,779 $2,259 $3,235 $1,503 $1,774 

(a)For the years ended December 31, 2020 and 2019, PPL includes $2.1 billion and $2.2 billion of revenues from external customers reported by the U.K. Regulated segment. PPL Electric and LKE represent revenues from external customers reported by the Pennsylvania Regulated and Kentucky Regulated segments. See Note 2 for additional information.
(b)Alternative revenue programs include the transmission formula rate for PPL Electric, the ECR and DSM programs for LG&E and KU, the GLT program for LG&E, and the generation formula rate for KU. This line item shows the over/under collection of these rate mechanisms with over-collections of revenue shown as positive amounts in the table above and under-collections shown as negative amounts.
(c)Represents additional revenues outside the scope of revenues from contracts with customers such as leases and other miscellaneous revenues.

The following table shows revenues from contracts with customers disaggregated by customer class for the years ended December 31:
2020
PPL (d)PPL Electric (d)LKELG&EKU
Licensed energy suppliers (a)$1,990 $— $— $— $— 
Residential2,585 1,238 1,347 676 671 
Commercial1,185 314 871 444 427 
Industrial582 44 538 173 365 
Other (b)484 50 261 114 147 
Wholesale - municipal20 — 20 — 20 
Wholesale - other (c)40 — 40 34 46 
Transmission670 670 — — — 
Revenues from Contracts with Customers$7,556 $2,316 $3,077 $1,441 $1,676 
2019
PPL (d)PPL Electric (d)LKELG&EKU
Licensed energy suppliers (a)$2,032 $— $— $— $— 
Residential2,610 1,288 1,322 668 654 
Commercial1,257 349 908 466 442 
Industrial621 59 562 180 382 
Other (b)495 52 277 121 156 
Wholesale - municipal43 — 43 — 43 
Wholesale - other (c)49 — 49 46 37 
Transmission594 594 — — — 
Revenues from Contracts with Customers$7,701 $2,342 $3,161 $1,481 $1,714 
2018
PPLPPL Electric LKELG&EKU
Licensed energy suppliers (a)$2,127 $— $— $— $— 
Residential2,704 1,379 1,325 666 659 
Commercial1,233 368 865 455 410 
Industrial624 54 570 180 390 
Other (b)489 53 278 129 149 
Wholesale - municipal118 — 118 — 118 
Wholesale - other (c)79 — 79 73 48 
Transmission405 405 — — — 
Revenues from Contracts with Customers$7,779 $2,259 $3,235 $1,503 $1,774 

(a)Represents customers of WPD.
(b)Primarily includes revenues from pole attachments, street lighting, other public authorities and other non-core businesses.
(c)Includes wholesale power and transmission revenues. LG&E and KU amounts include intercompany power sales and transmission revenues, which are eliminated upon consolidation at LKE.
(d)In 2020 and 2019, management deemed it appropriate to present the revenue offset associated with network integration transmission service (NITS) as distribution revenue rather than transmission revenue.

As discussed in Note 2, PPL segments its business by geographic location. Revenues from external customers for each segment/geographic location are reconciled to revenues from contracts with customers in the footnotes to the tables above. PPL Electric's revenues from contracts with customers are further disaggregated by distribution and transmission as indicated in the above tables.

Contract receivables from customers are primarily included in "Accounts receivable - Customer" and "Unbilled revenues" on the Balance Sheets.

The following table shows the accounts receivable and unbilled revenues balances that were impaired for the year ended December 31:
202020192018
PPL$29 $27 $34 
PPL Electric17 21 24 
LKE8 6 9 
LG&E4 2 4 
KU4 4 5 
The following table shows the balances and certain activity of contract liabilities resulting from contracts with customers:
PPLPPL ElectricLKELG&EKU
Contract liabilities as of December 31, 2020$48 $23 $11 $5 $6 
Contract liabilities as of December 31, 201944 21 9 5 4 
Revenue recognized during the year ended December 31, 2020 that was included in the contract liability balance at December 31, 201929 9 9 5 4 
Contract liabilities as of December 31, 2019$44 $21 $9 $5 $4 
Contract liabilities as of December 31, 201842 23 9 5 4 
Revenue recognized during the year ended December 31, 2019 that was included in the contract liability balance at December 31, 201832 11 9 5 4 
Contract liabilities as of December 31, 2018$42 $23 $9 $5 $4 
Contract liabilities as of December 31, 201729 19 8 4 4 
Revenue recognized during the year ended December 31, 2018 that was included in the contract liability balance at December 31, 201721 8 8 4 4 

Contract liabilities result from recording contractual billings in advance for customer attachments to the Registrants' infrastructure and payments received in excess of revenues earned to date. Advanced billings for customer attachments are recognized as revenue ratably over the billing period. Payments received in excess of revenues earned to date are recognized as revenue as services are delivered in subsequent periods.

At December 31, 2020, PPL had $46 million of performance obligations attributable to Corporate and Other that have not been satisfied. Of this amount, PPL expects to recognize approximately $46 million within the next 12 months.