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<TITLE>Form 10-Q PPL Transisiton Bond Co.</TITLE>
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      <div align="center"><B>United States</b><BR>
        <B>Securities and Exchange Commission</B></div>
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      <div align="center"><B>Washington, DC 20549</b></div>
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    <TD VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
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    <TD VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
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    <TD VALIGN="TOP" COLSPAN=2>
      <div align="center"><B>Form 10-Q</b></div>
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    <TD VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
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      <div align="center">THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN<BR>
        GENERAL INSTRUCTIONS H(1) (a) AND (b) OF FORM 10-Q AND<BR>
        IS THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT</div>
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    <TD VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
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    <TD WIDTH="4%" VALIGN="TOP"> [X]</TD>
    <TD WIDTH="96%" VALIGN="TOP"> QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
      OF THE SECURITIES<BR>
      EXCHANGE ACT OF 1934</TD>
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    <TD WIDTH="4%" VALIGN="TOP">&nbsp;</TD>
    <TD WIDTH="96%" VALIGN="TOP"> For the quarterly period ended <U>&nbsp;March
      31, 2002&nbsp;</U></TD>
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    <TD VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
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      <div align="center">OR</div>
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    <TD VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
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    <TD WIDTH="4%" VALIGN="TOP"> [ ]</TD>
    <TD WIDTH="96%" VALIGN="TOP"> TRANSITION REPORT PURSUANT TO SECTION 13 OR
      15(d) OF THE SECURITIES<BR>
      EXCHANGE ACT OF 1934</TD>
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    <TD WIDTH="4%" VALIGN="TOP">&nbsp;</TD>
    <TD WIDTH="96%" VALIGN="TOP"> For the transition period from ____________________
      to ____________________</TD>
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<P ALIGN="JUSTIFY">&nbsp;</P>
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    <TD WIDTH="19%" VALIGN="TOP"> Commission File<BR>
      Number</TD>
    <TD WIDTH="9%" VALIGN="TOP">&nbsp;</TD>
    <TD WIDTH="43%" VALIGN="TOP"> Registrant; State of Incorporation;<BR>
      Address; and Telephone No.</TD>
    <TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
    <TD WIDTH="18%" VALIGN="TOP"> IRS Employer<BR>
      Identification No.</TD>
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      <hr noshade>
    </TD>
    <TD WIDTH="9%" VALIGN="TOP">&nbsp;</TD>
    <TD WIDTH="43%" VALIGN="TOP">
      <hr noshade>
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    <TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
    <TD WIDTH="18%" VALIGN="TOP">
      <hr noshade>
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    <TD WIDTH="19%" VALIGN="TOP"> 333-75369</TD>
    <TD WIDTH="9%" VALIGN="TOP">&nbsp;</TD>
    <TD WIDTH="43%" VALIGN="TOP"> <B>PPL Transition Bond Company, LLC</B><BR>
      (Delaware) <BR>
      Two North Ninth Street, GENA92, Room 3<BR>
      Allentown, PA 18101-1179<BR>
      (610) 774-7934</TD>
    <TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
    <TD WIDTH="18%" VALIGN="TOP"> 23-3004428</TD>
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<P ALIGN="JUSTIFY">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 [ ]</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P>
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<P ALIGN="JUSTIFY">&nbsp;</P>&nbsp;<P ALIGN="JUSTIFY">&nbsp;
</P><P ALIGN="JUSTIFY"></P>&nbsp;<P ALIGN="JUSTIFY"></P>
<TABLE CELLSPACING=0 BORDER=0 cellpadding=0 WIDTH=100%>
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    <TD VALIGN="TOP" COLSPAN=5>
      <div align="center"><B><U>PPL TRANSITION BOND COMPANY, LLC</u></b></div>
    </TD>
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  <TR>
    <TD VALIGN="TOP" COLSPAN=5>&nbsp;</TD>
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  <TR>
    <TD VALIGN="TOP" COLSPAN=5>&nbsp;</TD>
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    <TD VALIGN="TOP" COLSPAN=5>
      <div align="center">FORM 10-Q</div>
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    <TD VALIGN="TOP" COLSPAN=5>
      <div align="center">FOR THE QUARTER ENDED MARCH 31, 2002</div>
    </TD>
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  <TR>
    <TD VALIGN="TOP" COLSPAN=5>&nbsp;</TD>
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  <TR>
    <TD VALIGN="TOP" COLSPAN=5>&nbsp;</TD>
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    <TD VALIGN="TOP" COLSPAN=5>
      <div align="center"><U>TABLE OF CONTENTS</u></div>
    </TD>
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  <TR>
    <TD WIDTH="4%" VALIGN="TOP">&nbsp;</TD>
    <TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
    <TD WIDTH="82%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
    <TD WIDTH="4%" VALIGN="TOP">&nbsp;</TD>
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    <TD WIDTH="95%" VALIGN="TOP" COLSPAN=3> PART I. FINANCIAL INFORMATION</TD>
    <TD WIDTH="5%" VALIGN="TOP" COLSPAN=2 align="right"> Page</TD>
  </TR>
  <TR>
    <TD WIDTH="4%" VALIGN="TOP">&nbsp;</TD>
    <TD WIDTH="10%" VALIGN="TOP">&nbsp;</TD>
    <TD WIDTH="82%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
    <TD WIDTH="4%" VALIGN="TOP">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="92%" COLSPAN=3> Item 1. Financial Statements</TD>
    <TD WIDTH="4%">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="10%">&nbsp;</TD>
    <TD WIDTH="82%" COLSPAN=2>&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="10%">&nbsp;</TD>
    <TD WIDTH="82%" COLSPAN=2> <a href="#MEMBERS">Condensed Statement of Operations
      and Changes in Member's Equity</a></TD>
    <TD WIDTH="4%">
      <div align="right">1</div>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="10%">&nbsp;</TD>
    <TD WIDTH="82%" COLSPAN=2>&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="10%">&nbsp;</TD>
    <TD WIDTH="82%" COLSPAN=2> <a href="#CASHFLOWS">Condensed Statement of Cash
      Flows</a></TD>
    <TD WIDTH="4%">
      <div align="right">2</div>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="10%">&nbsp;</TD>
    <TD WIDTH="82%" COLSPAN=2>&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="10%">&nbsp;</TD>
    <TD WIDTH="82%" COLSPAN=2> <a href="#BALANCESHEET">Condensed Balance Sheet</a></TD>
    <TD WIDTH="4%">
      <div align="right">3</div>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="10%">&nbsp;</TD>
    <TD WIDTH="82%" COLSPAN=2>&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="10%">&nbsp;</TD>
    <TD WIDTH="82%" COLSPAN=2> <a href="#NOTES">Notes to Condensed Financial Statements</a></TD>
    <TD WIDTH="4%">
      <div align="right">4</div>
    </TD>
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  <TR valign="bottom">
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="10%">&nbsp;</TD>
    <TD WIDTH="82%" COLSPAN=2>&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="92%" COLSPAN=3> <a href="#MDA">Item 2. Management's Discussion
      and Analysis of Financial Condition and Results of Operations</a></TD>
    <TD WIDTH="4%">
      <div align="right">7</div>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="10%">&nbsp;</TD>
    <TD WIDTH="82%" COLSPAN=2>&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="92%" COLSPAN=3> <a href="#RISK">Item 3. Quantitative and Qualitative
      Disclosures About Market Risk</a></TD>
    <TD WIDTH="4%">&nbsp;</TD>
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  <TR valign="bottom">
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="10%">&nbsp;</TD>
    <TD WIDTH="82%" COLSPAN=2>&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD WIDTH="96%" COLSPAN=4> PART II. OTHER INFORMATION</TD>
    <TD WIDTH="4%">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="10%">&nbsp;</TD>
    <TD WIDTH="82%" COLSPAN=2>&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="92%" COLSPAN=3> <a href="#LEGAL">Item 1. Legal Proceedings</a></TD>
    <TD WIDTH="4%">
      <div align="right">8</div>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="10%">&nbsp;</TD>
    <TD WIDTH="82%" COLSPAN=2>&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="92%" COLSPAN=3> <a href="#EXHIBITS">Item 6. Exhibits and Reports
      on Form 8-K</a></TD>
    <TD WIDTH="4%">
      <div align="right">8</div>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="10%">&nbsp;</TD>
    <TD WIDTH="82%" COLSPAN=2>&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD WIDTH="96%" COLSPAN=4> <a href="#GLOSSARY">GLOSSARY OF TERMS AND ABBREVIATIONS</a></TD>
    <TD WIDTH="4%">
      <div align="right">9</div>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD WIDTH="4%">&nbsp;</TD>
    <TD WIDTH="10%">&nbsp;</TD>
    <TD WIDTH="82%" COLSPAN=2>&nbsp;</TD>
    <TD WIDTH="4%">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD WIDTH="96%" COLSPAN=4> <a href="#SIGNATURES">SIGNATURES</a></TD>
    <TD WIDTH="4%">
      <div align="right">10</div>
    </TD>
  </TR>
</TABLE>
<br><hr noshade><br>
<P ALIGN="JUSTIFY">&nbsp;</P>&nbsp;<P ALIGN="JUSTIFY">&nbsp;
</P><P ALIGN="JUSTIFY"></P>&nbsp;<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P>&nbsp;<P ALIGN="JUSTIFY">&nbsp;
</P><P ALIGN="JUSTIFY"></P>&nbsp;<P ALIGN="JUSTIFY"></P>
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    <TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=26> <B><U><A NAME="MEMBERS"></A>PPL
      TRANSITION BOND COMPANY, LLC</u></b></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=26></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=26></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=26></TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=26></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=26></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=26></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=26></TD>
  </TR>
  <TR>
    <TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=26> <B><U>Part 1. FINANCIAL
      INFORMATION</u></b></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=26></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=26></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=26></TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=26></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=26></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=26></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=26></TD>
  </TR>
  <TR>
    <TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=26> <B><U>Item 1. Financial
      Statements</u></b></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=26></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=26></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=26></TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=26></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=26></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=26></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=26></TD>
  </TR>
  <TR>
    <TD WIDTH="99%" VALIGN="BOTTOM" COLSPAN=10 HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD VALIGN="BOTTOM" COLSPAN=11 HEIGHT=18> <B>CONDENSED STATEMENT OF OPERATIONS
      AND CHANGES IN MEMBER'S EQUITY</B></TD>
  </TR>
  <TR>
    <TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18> (Unaudited)</TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18> <I>(Thousands of Dollars)</I></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="29%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=18>
      <div align="center"><B><font size="2">Three Months Ended</font></b><font size="2"><BR>
        <B>March 31,</B> </font>
        <hr noshade>
      </div>
    </TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD colspan="2" VALIGN="BOTTOM" HEIGHT=18>
      <div align="center"><B>2002</b></div>
    </TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD colspan="2" VALIGN="BOTTOM" HEIGHT=18>
      <div align="center"><B>2001</b></div>
    </TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <tr valign="top">
    <td width="68%" colspan=4 height=18></td>
    <td width="2%" height=18></td>
    <td colspan="2" height=18>
      <hr noshade>
    </td>
    <td width="3%" height=18></td>
    <td colspan="2" height=18>
      <hr noshade>
    </td>
    <td width="1%" height=18></td>
  </tr>
  <TR>
    <TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18> <B>Revenue</B></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18> Intangible transition
      charge revenue</TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>$</b></div>
    </TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>90,671</b></div>
    </TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">$</div>
    </TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">107,565</div>
    </TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18> Interest income</TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"></div>
    </TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>57</b></div>
    </TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">190</div>
    </TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <tr valign="top">
    <td width="68%" colspan=4 height=18></td>
    <td width="2%" height=18></td>
    <td colspan="2" height=18>
      <hr noshade>
    </td>
    <td width="3%" height=18></td>
    <td colspan="2" height=18>
      <hr noshade>
    </td>
    <td width="1%" height=18></td>
  </tr>
  <TR>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="59%" VALIGN="BOTTOM" HEIGHT=18> Total revenue</TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>90,728</b></div>
    </TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">107,755</div>
    </TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <tr valign="top">
    <td width="68%" colspan=4 height=18></td>
    <td width="2%" height=18></td>
    <td colspan="2" height=18>
      <hr noshade>
    </td>
    <td width="3%" height=18></td>
    <td colspan="2" height=18>
      <hr noshade>
    </td>
    <td width="1%" height=18></td>
  </tr>
  <TR>
    <TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18> <B>Expenses</B></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18> Amortization of intangible
      transition property</TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>56,374</b></div>
    </TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">69,320</div>
    </TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18> Interest expense</TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>33,875</b></div>
    </TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">37,835</div>
    </TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="65%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18> Administrative and general
      expenses</TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>422</b></div>
    </TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">424</div>
    </TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <tr valign="top">
    <td width="68%" colspan=4 height=18></td>
    <td width="2%" height=18></td>
    <td colspan="2" height=18>
      <hr noshade>
    </td>
    <td width="3%" height=18></td>
    <td colspan="2" height=18>
      <hr noshade>
    </td>
    <td width="1%" height=18></td>
  </tr>
  <TR>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="59%" VALIGN="BOTTOM" HEIGHT=18> Total expenses</TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>90,671</b></div>
    </TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">107,579</div>
    </TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <tr valign="top">
    <td width="68%" colspan=4 height=18></td>
    <td width="2%" height=18></td>
    <td colspan="2" height=18>
      <hr noshade>
    </td>
    <td width="3%" height=18></td>
    <td colspan="2" height=18>
      <hr noshade>
    </td>
    <td width="1%" height=18></td>
  </tr>
  <TR>
    <TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18> <B>Operating Income</B></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>57</b></div>
    </TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">176</div>
    </TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18> Income tax expense</TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>24</b></div>
    </TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">73</div>
    </TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <tr valign="top">
    <td width="68%" colspan=4 height=18></td>
    <td width="2%" height=18></td>
    <td colspan="2" height=18>
      <hr noshade>
    </td>
    <td width="3%" height=18></td>
    <td colspan="2" height=18>
      <hr noshade>
    </td>
    <td width="1%" height=18></td>
  </tr>
  <TR>
    <TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18> <B>Net Income</B></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>33</b></div>
    </TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">103</div>
    </TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <tr valign="top">
    <td width="68%" colspan=4 height=18></td>
    <td width="2%" height=18></td>
    <td colspan="2" height=18>
      <hr noshade size="5">
    </td>
    <td width="3%" height=18></td>
    <td colspan="2" height=18>
      <hr noshade size="5">
    </td>
    <td width="1%" height=18></td>
  </tr>
  <TR>
    <TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18> Member's equity - beginning
      of period</TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>12,468</b></div>
    </TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">12,330</div>
    </TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18> Distribution to Member</TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>(200</b></div>
    </TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18> <B>)</B></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <tr valign="top">
    <td width="68%" colspan=4 height=18></td>
    <td width="2%" height=18></td>
    <td colspan="2" height=18>
      <hr noshade>
    </td>
    <td width="3%" height=18></td>
    <td colspan="2" height=18>
      <hr noshade>
    </td>
    <td width="1%" height=18></td>
  </tr>
  <TR>
    <TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18> Member's equity - end
      of period</TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>$</b></div>
    </TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>12,301</b></div>
    </TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">$</div>
    </TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">12,433</div>
    </TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <tr valign="top">
    <td width="68%" colspan=4 height=18></td>
    <td width="2%" height=18></td>
    <td colspan="2" height=18>
      <hr noshade size="5">
    </td>
    <td width="3%" height=18></td>
    <td colspan="2" height=18>
      <hr noshade size="5">
    </td>
    <td width="1%" height=18></td>
  </tr>
  <TR>
    <TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="68%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD VALIGN="BOTTOM" COLSPAN=11 HEIGHT=18>
      <div align="center"><I><font size="2">The accompanying Notes to Condensed
        Financial Statements are an integral part of the financial statements.</font></i></div>
    </TD>
  </TR>
</TABLE>
<br><hr noshade><br>
<TABLE BORDER=0 cellpadding=0 CELLSPACING=0 WIDTH=100%>
  <TR>
    <TD WIDTH="69%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="69%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=24> <B><U><A NAME="CASHFLOWS"></A>PPL
      TRANSITION BOND COMPANY, LLC</u></b></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=24></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=24></TD>
    <TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=24></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=24></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=24></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=24></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=24></TD>
  </TR>
  <TR>
    <TD WIDTH="69%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=24> <B>CONDENSED STATEMENT
      OF CASH FLOWS</B></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=24></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=24></TD>
    <TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=24></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=24></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=24></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=24></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=24></TD>
  </TR>
  <TR>
    <TD WIDTH="69%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18> (Unaudited)</TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="69%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18> <I>(Thousands of Dollars)</I></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="69%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="69%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="28%" VALIGN="BOTTOM" COLSPAN=5 HEIGHT=18>
      <div align="center"><B><font size="2">Three Months Ended</font></b><font size="2"><BR>
        <B>March 31,</B></font></div>
    </TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <tr valign="top">
    <td width="69%" colspan=4 height=18></td>
    <td width="2%" height=18></td>
    <td width="28%" colspan=5 height=18>
      <hr noshade>
    </td>
    <td width="1%" height=18></td>
  </tr>
  <TR>
    <TD WIDTH="69%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD colspan="2" VALIGN="BOTTOM" HEIGHT=18>
      <div align="center"><B>2002</b></div>
    </TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD colspan="2" VALIGN="BOTTOM" HEIGHT=18>
      <div align="center"><B>2001</b></div>
    </TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <tr valign="top">
    <td width="69%" colspan=4 height=18></td>
    <td width="2%" height=18></td>
    <td colspan="2" height=18>
      <hr noshade>
    </td>
    <td width="2%" height=18></td>
    <td colspan="2" height=18>
      <hr noshade>
    </td>
    <td width="1%" height=18></td>
  </tr>
  <TR>
    <TD WIDTH="69%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18> <B>Cash Flows From Operating
      Activities</B></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18> Net Income</TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>$</b></div>
    </TD>
    <TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>33</b></div>
    </TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">$</div>
    </TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">103</div>
    </TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18> Adjustments to reconcile
      net income to net cash provided by<BR>
      &nbsp;&nbsp;operating activities:</TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18> Amortization of intangible
      transition property</TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>56,374</b></div>
    </TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">69,320</div>
    </TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18> Amortization of debt
      issuance expenses</TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>616</b></div>
    </TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">732</div>
    </TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18> Amortization of debt
      discount</TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>9</b></div>
    </TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">14</div>
    </TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18> Changes in current assets
      and liabilities:</TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="63%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18> Intangible transition
      charge receivable from Servicer</TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>6,306</b></div>
    </TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">4,420</div>
    </TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="63%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18> Other</TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>(327</b></div>
    </TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18> <B>)</B></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">43</div>
    </TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18> Other operating activities
      - net</TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>917</b></div>
    </TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">1,140</div>
    </TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <tr valign="top">
    <td width="69%" colspan=4 height=18></td>
    <td width="2%" height=18></td>
    <td colspan="2" height=18>
      <hr noshade>
    </td>
    <td width="2%" height=18></td>
    <td colspan="2" height=18>
      <hr noshade>
    </td>
    <td width="1%" height=18></td>
  </tr>
  <TR>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="59%" VALIGN="BOTTOM" HEIGHT=18> Net cash provided by operating
      activities</TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>63,928</b></div>
    </TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">75,772</div>
    </TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <tr valign="top">
    <td width="69%" colspan=4 height=18></td>
    <td width="2%" height=18></td>
    <td colspan="2" height=18>
      <hr noshade>
    </td>
    <td width="2%" height=18></td>
    <td colspan="2" height=18>
      <hr noshade>
    </td>
    <td width="1%" height=18></td>
  </tr>
  <TR>
    <TD WIDTH="69%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18> <B>Cash Flows From Investing
      Activities</B></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18> Change in restricted
      funds</TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>3,932</b></div>
    </TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">(9,774</div>
    </TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18> )</TD>
  </TR>
  <tr valign="top">
    <td width="69%" colspan=4 height=18></td>
    <td width="2%" height=18></td>
    <td colspan="2" height=18>
      <hr noshade>
    </td>
    <td width="2%" height=18></td>
    <td colspan="2" height=18>
      <hr noshade>
    </td>
    <td width="1%" height=18></td>
  </tr>
  <TR>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="59%" VALIGN="BOTTOM" HEIGHT=18> Net cash provided by (used in)
      investing activities</TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>3,932</b></div>
    </TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">(9,774</div>
    </TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18> )</TD>
  </TR>
  <tr valign="top">
    <td width="69%" colspan=4 height=18></td>
    <td width="2%" height=18></td>
    <td colspan="2" height=18>
      <hr noshade>
    </td>
    <td width="2%" height=18></td>
    <td colspan="2" height=18>
      <hr noshade>
    </td>
    <td width="1%" height=18></td>
  </tr>
  <TR>
    <TD WIDTH="69%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18> <B>Cash Flows From Financing
      Activities</B></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18> Payment of principal
      on bonds</TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>(67,883</b></div>
    </TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18> <B>)</B></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">(65,820</div>
    </TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18> )</TD>
  </TR>
  <TR>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="66%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18> Distribution to Member</TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>(200</b></div>
    </TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18> <B>)</B></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <tr valign="top">
    <td width="69%" colspan=4 height=18></td>
    <td width="2%" height=18></td>
    <td colspan="2" height=18>
      <hr noshade>
    </td>
    <td width="2%" height=18></td>
    <td colspan="2" height=18>
      <hr noshade>
    </td>
    <td width="1%" height=18></td>
  </tr>
  <TR>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="3%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="59%" VALIGN="BOTTOM" HEIGHT=18> Net cash used in financing activities</TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>(68,083</b></div>
    </TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18> <B>)</B></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">(65,820</div>
    </TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18> )</TD>
  </TR>
  <tr valign="top">
    <td width="69%" colspan=4 height=18></td>
    <td width="2%" height=18></td>
    <td colspan="2" height=18>
      <hr noshade>
    </td>
    <td width="2%" height=18></td>
    <td colspan="2" height=18>
      <hr noshade>
    </td>
    <td width="1%" height=18></td>
  </tr>
  <TR>
    <TD WIDTH="69%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18> <B>Net Increase (Decrease)
      in Cash and Cash Equivalents</B></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>(223</b></div>
    </TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18> <B>)</B></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">178</div>
    </TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="69%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18> Cash and Cash Equivalents
      at Beginning of Period</TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>588</b></div>
    </TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">793</div>
    </TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <tr valign="top">
    <td width="69%" colspan=4 height=18></td>
    <td width="2%" height=18></td>
    <td colspan="2" height=18>
      <hr noshade>
    </td>
    <td width="2%" height=18></td>
    <td colspan="2" height=18>
      <hr noshade>
    </td>
    <td width="1%" height=18></td>
  </tr>
  <TR>
    <TD WIDTH="69%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18> Cash and Cash Equivalents
      at End of Period</TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>$</b></div>
    </TD>
    <TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>365</b></div>
    </TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">$</div>
    </TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">971</div>
    </TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <tr valign="top">
    <td width="69%" colspan=4 height=18></td>
    <td width="2%" height=18></td>
    <td colspan="2" height=18>
      <hr noshade size="5">
    </td>
    <td width="2%" height=18></td>
    <td colspan="2" height=18>
      <hr noshade size="5">
    </td>
    <td width="1%" height=18></td>
  </tr>
  <TR>
    <TD WIDTH="69%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="69%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="12%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="11%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="99%" VALIGN="BOTTOM" COLSPAN=10 HEIGHT=18>
      <div align="center"><I><font size="2">The accompanying Notes to Condensed
        Financial Statements are an integral part of the financial statements.</font></i></div>
    </TD>
    <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
</TABLE>
<br><hr noshade><br>
<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=100%>
  <TR>
    <TD WIDTH="61%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18> <B><U><A NAME="BALANCESHEET"></A>PPL
      TRANSITION BOND COMPANY, LLC</u></b></TD>
    <TD WIDTH="2%" VALIGN="TOP" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="61%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18> <B>CONDENSED BALANCE
      SHEET</B> </TD>
    <TD WIDTH="2%" VALIGN="TOP" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="61%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18> (Unaudited)</TD>
    <TD WIDTH="2%" VALIGN="TOP" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="61%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18> <I>(Thousands of Dollars)</I></TD>
    <TD WIDTH="2%" VALIGN="TOP" HEIGHT=18></TD>
    <TD WIDTH="16%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="17%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18></TD>
  </TR>
  <TR valign="bottom">
    <TD WIDTH="61%" COLSPAN=4 HEIGHT=18></TD>
    <TD WIDTH="2%" HEIGHT=18></TD>
    <TD WIDTH="16%" COLSPAN=2 HEIGHT=18>
      <div align="center"><font size="2"><B>March 31,</b><BR>
        <B>2002</B></font></div>
    </TD>
    <TD WIDTH="4%" HEIGHT=18><font size="2"></font></TD>
    <TD WIDTH="17%" COLSPAN=2 HEIGHT=18>
      <div align="center"><font size="2"><B>December 31,</b><BR>
        <B>2001</B></font></div>
    </TD>
  </TR>
  <tr valign="top">
    <td width="61%" colspan=4 height=18></td>
    <td width="2%" height=18></td>
    <td width="16%" colspan=2 height=18>
      <hr noshade>
    </td>
    <td width="4%" height=18>&nbsp;</td>
    <td width="17%" colspan=2 height=18>
      <hr noshade>
    </td>
  </tr>
  <TR>
    <TD WIDTH="61%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18> <B>ASSETS</B></TD>
    <TD WIDTH="2%" VALIGN="TOP" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="57%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18> <B>Current Assets</B></TD>
    <TD WIDTH="2%" VALIGN="TOP" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="53%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18> Cash and cash equivalents</TD>
    <TD WIDTH="2%" VALIGN="TOP" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>$</b></div>
    </TD>
    <TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>365</b></div>
    </TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">$</div>
    </TD>
    <TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">588</div>
    </TD>
  </TR>
  <TR>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="53%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18> Intangible transition
      charges receivable from Servicer</TD>
    <TD WIDTH="2%" VALIGN="TOP" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>65,537</b></div>
    </TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">71,843</div>
    </TD>
  </TR>
  <TR>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="53%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18> Other current assets</TD>
    <TD WIDTH="2%" VALIGN="TOP" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>34</b></div>
    </TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">57</div>
    </TD>
  </TR>
  <tr valign="top">
    <td width="61%" colspan=4 height=18></td>
    <td width="2%" height=18></td>
    <td width="16%" colspan=2 height=18>
      <hr noshade>
    </td>
    <td width="4%" height=18>&nbsp;</td>
    <td width="17%" colspan=2 height=18>
      <hr noshade>
    </td>
  </tr>
  <TR>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="49%" VALIGN="BOTTOM" HEIGHT=18> Current assets</TD>
    <TD WIDTH="2%" VALIGN="TOP" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>65,936</b></div>
    </TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">72,488</div>
    </TD>
  </TR>
  <tr valign="top">
    <td width="61%" colspan=4 height=18></td>
    <td width="2%" height=18></td>
    <td width="16%" colspan=2 height=18>
      <hr noshade>
    </td>
    <td width="4%" height=18>&nbsp;</td>
    <td width="17%" colspan=2 height=18>
      <hr noshade>
    </td>
  </tr>
  <TR>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="57%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18> <B>Noncurrent Assets</B></TD>
    <TD WIDTH="2%" VALIGN="TOP" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="53%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18> Intangible transition
      property, net</TD>
    <TD WIDTH="2%" VALIGN="TOP" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>1,772,888</b></div>
    </TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">1,829,852</div>
    </TD>
  </TR>
  <TR>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="53%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18> Unamortized debt issuance
      expenses</TD>
    <TD WIDTH="2%" VALIGN="TOP" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>8,228</b></div>
    </TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">8,844</div>
    </TD>
  </TR>
  <TR>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="53%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18> Restricted funds</TD>
    <TD WIDTH="2%" VALIGN="TOP" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>30,620</b></div>
    </TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">34,552</div>
    </TD>
  </TR>
  <tr valign="top">
    <td width="61%" colspan=4 height=18></td>
    <td width="2%" height=18></td>
    <td width="16%" colspan=2 height=18>
      <hr noshade>
    </td>
    <td width="4%" height=18>&nbsp;</td>
    <td width="17%" colspan=2 height=18>
      <hr noshade>
    </td>
  </tr>
  <TR>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="49%" VALIGN="BOTTOM" HEIGHT=18> Noncurrent assets</TD>
    <TD WIDTH="2%" VALIGN="TOP" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>1,811,736</b></div>
    </TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">1,873,248</div>
    </TD>
  </TR>
  <tr valign="top">
    <td width="61%" colspan=4 height=18></td>
    <td width="2%" height=18></td>
    <td width="16%" colspan=2 height=18>
      <hr noshade>
    </td>
    <td width="4%" height=18>&nbsp;</td>
    <td width="17%" colspan=2 height=18>
      <hr noshade>
    </td>
  </tr>
  <TR>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="49%" VALIGN="BOTTOM" HEIGHT=18> Total assets</TD>
    <TD WIDTH="2%" VALIGN="TOP" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>$</b></div>
    </TD>
    <TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>1,877,672</b></div>
    </TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">$</div>
    </TD>
    <TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">1,945,736</div>
    </TD>
  </TR>
  <tr valign="top">
    <td width="61%" colspan=4 height=18></td>
    <td width="2%" height=18></td>
    <td width="16%" colspan=2 height=18>
      <hr noshade size="5">
    </td>
    <td width="4%" height=18>&nbsp;</td>
    <td width="17%" colspan=2 height=18>
      <hr noshade size="5">
    </td>
  </tr>
  <TR>
    <TD WIDTH="61%" VALIGN="BOTTOM" COLSPAN=4 HEIGHT=18> <B>LIABILITIES AND MEMBER'S
      EQUITY</B></TD>
    <TD WIDTH="2%" VALIGN="TOP" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="57%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18> <B>Current Liabilities</B></TD>
    <TD WIDTH="2%" VALIGN="TOP" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="53%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18> Long-term debt</TD>
    <TD WIDTH="2%" VALIGN="TOP" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>$</b></div>
    </TD>
    <TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>247,151</b></div>
    </TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">$</div>
    </TD>
    <TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">245,476</div>
    </TD>
  </TR>
  <TR>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="53%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18> Interest accrued</TD>
    <TD WIDTH="2%" VALIGN="TOP" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>1,788</b></div>
    </TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">1,850</div>
    </TD>
  </TR>
  <TR>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="53%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18> Other</TD>
    <TD WIDTH="2%" VALIGN="TOP" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>2,382</b></div>
    </TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">2,670</div>
    </TD>
  </TR>
  <tr valign="top">
    <td width="61%" colspan=4 height=18></td>
    <td width="2%" height=18></td>
    <td width="16%" colspan=2 height=18>
      <hr noshade>
    </td>
    <td width="4%" height=18>&nbsp;</td>
    <td width="17%" colspan=2 height=18>
      <hr noshade>
    </td>
  </tr>
  <TR>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="49%" VALIGN="BOTTOM" HEIGHT=18> Current liabilities</TD>
    <TD WIDTH="2%" VALIGN="TOP" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>251,321</b></div>
    </TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">249,996</div>
    </TD>
  </TR>
  <tr valign="top">
    <td width="61%" colspan=4 height=18></td>
    <td width="2%" height=18></td>
    <td width="16%" colspan=2 height=18>
      <hr noshade>
    </td>
    <td width="4%" height=18>&nbsp;</td>
    <td width="17%" colspan=2 height=18>
      <hr noshade>
    </td>
  </tr>
  <TR>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="57%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18> <B>Noncurrent Liabilities</B></TD>
    <TD WIDTH="2%" VALIGN="TOP" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="53%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18> Long-term debt, net of
      discount</TD>
    <TD WIDTH="2%" VALIGN="TOP" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>1,608,164</b></div>
    </TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">1,677,713</div>
    </TD>
  </TR>
  <TR>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="53%" VALIGN="BOTTOM" COLSPAN=2 HEIGHT=18> Other</TD>
    <TD WIDTH="2%" VALIGN="TOP" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>5,886</b></div>
    </TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">5,559</div>
    </TD>
  </TR>
  <tr valign="top">
    <td width="61%" colspan=4 height=18></td>
    <td width="2%" height=18></td>
    <td width="16%" colspan=2 height=18>
      <hr noshade>
    </td>
    <td width="4%" height=18>&nbsp;</td>
    <td width="17%" colspan=2 height=18>
      <hr noshade>
    </td>
  </tr>
  <TR>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="49%" VALIGN="BOTTOM" HEIGHT=18> Noncurrent liabilities</TD>
    <TD WIDTH="2%" VALIGN="TOP" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>1,614,050</b></div>
    </TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">1,683,272</div>
    </TD>
  </TR>
  <tr valign="top">
    <td width="61%" colspan=4 height=18></td>
    <td width="2%" height=18></td>
    <td width="16%" colspan=2 height=18>
      <hr noshade>
    </td>
    <td width="4%" height=18>&nbsp;</td>
    <td width="17%" colspan=2 height=18>
      <hr noshade>
    </td>
  </tr>
  <TR>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="57%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18> <B>Commitments and Contingent
      Liabilities</B></TD>
    <TD WIDTH="2%" VALIGN="TOP" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="57%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="TOP" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="57%" VALIGN="BOTTOM" COLSPAN=3 HEIGHT=18> <B>Member's Equity</B></TD>
    <TD WIDTH="2%" VALIGN="TOP" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>12,301</b></div>
    </TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">12,468</div>
    </TD>
  </TR>
  <tr valign="top">
    <td width="61%" colspan=4 height=18></td>
    <td width="2%" height=18></td>
    <td width="16%" colspan=2 height=18>
      <hr noshade>
    </td>
    <td width="4%" height=18>&nbsp;</td>
    <td width="17%" colspan=2 height=18>
      <hr noshade>
    </td>
  </tr>
  <TR>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="49%" VALIGN="BOTTOM" HEIGHT=18> Total liabilities and member's
      equity</TD>
    <TD WIDTH="2%" VALIGN="TOP" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>$</b></div>
    </TD>
    <TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right"><B>1,877,672</b></div>
    </TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">$</div>
    </TD>
    <TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=18>
      <div align="right">1,945,736</div>
    </TD>
  </TR>
  <tr valign="top">
    <td width="61%" colspan=4 height=18></td>
    <td width="2%" height=18></td>
    <td width="16%" colspan=2 height=18>
      <hr noshade size="5">
    </td>
    <td width="4%" height=18>&nbsp;</td>
    <td width="17%" colspan=2 height=18>
      <hr noshade size="5">
    </td>
  </tr>
  <TR>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="49%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="TOP" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="14%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="4%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=18></TD>
    <TD WIDTH="15%" VALIGN="BOTTOM" HEIGHT=18></TD>
  </TR>
  <TR>
    <TD VALIGN="BOTTOM" COLSPAN=10 HEIGHT=18>
      <div align="center"><I><font size="2">The accompanying Notes to Condensed
        Financial Statements are an integral part of the financial statements.</font></i></div>
    </TD>
  </TR>
</TABLE>
<br><hr noshade><br>
<br>
<p>&nbsp;</p>
<P ALIGN="CENTER"> <b><A NAME="NOTES"></A>PPL Transition Bond Company, LLC</b><BR>
  <B><U>Notes to Condensed Financial Statements</u></b></p>

<P ALIGN="CENTER"></p>

<P ALIGN="JUSTIFY">Terms and abbreviations appearing in Notes to Condensed Financial
  Statements are explained in the glossary.</P>
<P ALIGN="JUSTIFY"></P>
<OL>
  <li>
    <p align="justify"><B>Interim Financial Statements</B></p>

    <P ALIGN="JUSTIFY"></P>
    <P ALIGN="JUSTIFY">Certain information in footnote disclosures, normally included
      in financial statements prepared in accordance with accounting standards
      generally accepted in the U.S., has been condensed or omitted in this Form
      10-Q pursuant to the rules and regulations of the SEC. These condensed financial
      statements should be read in conjunction with the financial statements and
      notes included in PPL Transition Bond Company, LLC's Annual Report to the
      SEC on Form 10-K for the year ended December 31, 2001.</P>
    <P ALIGN="JUSTIFY"></P>
  <li>
    <p align="justify"><b>Nature of Operations</B></p>

    <P ALIGN="JUSTIFY"></P>
    <P ALIGN="JUSTIFY">The condensed financial statements include the accounts
      of PPL Transition Bond Company, LLC. The Company is a limited liability
      company established under the laws of the State of Delaware, and was formed
      on March 25, 1999, pursuant to the filing of a certificate of formation
      with the Delaware Secretary of State and a limited liability company agreement.
      PPL Electric Utilities is the sole member of the Company.</P>
    <P ALIGN="JUSTIFY"></P>
    <P ALIGN="JUSTIFY">The Company was organized for the sole purpose of purchasing
      and owning ITP, issuing transition bonds (the Bonds), pledging its interest
      in ITP and other collateral to the Trustee under an Indenture between the
      Company and the Trustee to collateralize the Bonds, and performing activities
      that are necessary to accomplish these purposes. ITP represents the irrevocable
      right of PPL Electric Utilities, or its successor or assignee, to collect
      a non-bypassable ITC from customers pursuant to the PUC Restructuring Order
      in accordance with the Competition Act. The PUC Restructuring Order authorized
      the ITC to be sufficient to recover up to $2.85 billion aggregate principal
      amount of Bonds, plus an amount sufficient to provide for any credit enhancement,
      to fund any reserves and to pay interest, redemption premiums, servicing
      fees and other expenses relating to the Bonds.</P>
    <P ALIGN="JUSTIFY"></P>
    <P ALIGN="JUSTIFY">The Company's organizational documents require it to operate
      in a manner so that its assets would not be consolidated with the bankruptcy
      estate of PPL Electric Utilities in the event PPL Electric Utilities becomes
      subject to a bankruptcy proceeding. Both PPL Electric Utilities and the
      Company have treated the transfer of the ITP to the Company as a sale under
      applicable law. The Bonds are treated as debt obligations of the Company.
      The assets of the Company are not available to creditors of PPL Electric
      Utilities or PPL Corporation, and the ITP is legally not an asset of PPL
      Electric Utilities or PPL Corporation. The Company is expected to terminate
      its existence after final maturity of the Bonds.</P>
    <P ALIGN="JUSTIFY"></P>
    <P ALIGN="JUSTIFY">The Company issued $2.42 billion of Bonds in eight different
      classes on August 10, 1999. See Note 4 for additional information.</P>
    <P ALIGN="JUSTIFY"></P>
  <li>
    <p align="justify"><B>Summary of Significant Accounting Policies</B></p>

    <P ALIGN="JUSTIFY"></P>
    <p align="justify"><b>Management's Estimates</b></p>
    <P ALIGN="JUSTIFY"></P>
    <P ALIGN="JUSTIFY">The preparation of condensed financial statements in conformity
      with generally accepted accounting principles requires management to make
      estimates and assumptions. These estimates and assumptions will affect the
      reported amount of revenues, expenses, assets and liabilities, and disclosure
      of contingencies. Actual results could differ from these estimates.</P>
    <P ALIGN="JUSTIFY"></P>
    <p align="justify"><b>Cash and Cash Equivalents</b></p>
    <P ALIGN="JUSTIFY"></P>
    <P ALIGN="JUSTIFY">The Company considers all liquid debt instruments purchased
      with a maturity of three months or less to be cash equivalents. Cash and
      Cash Equivalents do not include Restricted Funds.</P>
    <P ALIGN="JUSTIFY"></P>
    <p align="justify"><b>Restricted Funds</b></p>
    <P ALIGN="JUSTIFY"></P>
    <P ALIGN="JUSTIFY">Under the Indenture, the Company deposited an amount equal
      to 0.5% of the initial principal amount of the Series 1999-1 Bonds into
      the Capital Subaccount with the Trustee. This amount was contributed by
      PPL Electric Utilities to the Company. This account is the last account
      drawn in the event funds are insufficient to make scheduled allocations.
      If the Capital Subaccount is used, it will be replenished from ITC remittances
      to its original level through the periodic reconciliation process. The Indenture
      also provides for an Overcollateralization Subaccount. The funding level
      of this account is 0.5% of the initial principal amount of the Series 1999-1
      Bonds, funded ratably over the life of the Bonds. Any excess amounts of
      ITC collections and investment earnings not released to the Company are
      deposited into a Reserve Subaccount. Accordingly, the Capital Subaccount,
      Overcollateralization Subaccount, and Reserve Subaccount are classified
      as "Restricted Funds" on the Balance Sheet.</P>
    <P ALIGN="JUSTIFY"></P>
    <p><b>Amortization of Intangible Transition Property</b></p>
    <P ALIGN="JUSTIFY"></P>
    <P ALIGN="JUSTIFY">The ITP was recorded at the acquired cost and is being
      amortized over the life of the Bonds, based on ITC revenues, interest accruals
      and other fees. The ITP is solely the property of the Company.</P>
    <p align="justify"><b>Amortization of Debt Issuance Costs and Discount on
      Debt</b></p>
    <P ALIGN="JUSTIFY"></P>
    <P ALIGN="JUSTIFY">The costs associated with the issuance of the Bonds have
      been capitalized and are being amortized over the life of the Bonds, utilizing
      the effective interest method.</P>
    <P ALIGN="JUSTIFY"></P>
    <p align="justify"><b>Income Taxes</b></p>
    <P ALIGN="JUSTIFY"></P>
    <P ALIGN="JUSTIFY">The Company is a limited liability company and has elected
      to be disregarded as a separate entity for federal and state income tax
      purposes. The Company's taxable income or loss is included in the consolidated
      federal and state income tax returns of its member. The Condensed Statement
      of Operations and Changes in Member's Equity reflects the Company's pro
      rata allocation of its Member's consolidated income taxes in accordance
      with its Member's tax sharing policy.</P>
    <P ALIGN="JUSTIFY"></P>
    <p align="justify"><b>Reclassification</b></p>
    <P ALIGN="JUSTIFY"></P>
    <P ALIGN="JUSTIFY">Certain amounts in the March 31, 2001 and December 31,
      2001 financial statements have been reclassified to conform to the current
      presentation.</P>
    <P ALIGN="JUSTIFY"></P>
  <li>
    <p align="justify"><B>Long-Term Debt and Source of Repayment</B></p>

    <P ALIGN="JUSTIFY"></P>
    <P ALIGN="JUSTIFY">In August 1999, the Company issued $2.42 billion of Series
      1999-1 Bonds. The Bonds consist of eight classes. The Company used the proceeds
      from the Bonds to purchase ITP from CEP Securities. PPL Electric Utilities
      arranged for the formation of CEP Securities to provide flexibility to issue
      multiple tranches of transition bonds at different dates. The Bonds are
      collateralized by the ITP and the amounts in the subaccounts maintained
      by the Trustee under the Indenture (as described below).</P>
    <P ALIGN="JUSTIFY"></P>
    <P ALIGN="JUSTIFY">Scheduled maturities and interest rates for the Bonds at
      March 31,&nbsp;2002 are:</P>
    <P ALIGN="JUSTIFY"></P>
    <TABLE BORDER=0 CELLSPACING=0 cellpadding=0 WIDTH=75%>
      <tr align="center">
        <td width="9%" valign="BOTTOM" height=16><font size="2"><u>Class</u> </font></td>
        <td valign="BOTTOM" colspan=2 height=16><font size="2"></font></td>
        <td valign="BOTTOM" colspan=2 height=16><font size="2"><u>Bond Rate</u></font></td>
        <td width="1%" valign="BOTTOM" height=16>&nbsp;</td>
        <td width="1%" valign="BOTTOM" height=16>&nbsp;</td>
        <td valign="BOTTOM" colspan=2 height=16><font size="2"><u>Amount</u></font></td>
        <td valign="BOTTOM" colspan=2 height=16>&nbsp;</td>
        <td valign="BOTTOM" colspan=2 height=16 align="left"><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expected
          Final <u><br>
          </u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>Payment Date</u></font></td>
        <td colspan="3" valign="BOTTOM" height=16 align="left"><font size="2"><u>Final
          Maturity Date</u></font></td>
      </tr>
      <TR>
        <TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=16 align="center"><font size="2">
          A-1</font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><font size="2"></font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
          <div align="center"><font size="2">6.08%</font></div>
        </TD>
        <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=16><font size="2"></font></TD>
        <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=16><font size="2"> $</font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
          <div align="right"><font size="2">0</font></div>
        </TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><font size="2"></font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><font size="2"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;March
          25, 2001</font></TD>
        <TD colspan="3" VALIGN="BOTTOM" HEIGHT=16><font size="2"></font><font size="2">
          March 25, 2003</font></TD>
      </TR>
      <TR>
        <TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=16 align="center"><font size="2">
          A-2</font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><font size="2"></font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
          <div align="center"><font size="2">6.41%</font></div>
        </TD>
        <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=16><font size="2"></font></TD>
        <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=16><font size="2"></font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
          <div align="right"><font size="2">0</font></div>
        </TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><font size="2"></font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><font size="2"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December
          26, 2001</font></TD>
        <TD colspan="3" VALIGN="BOTTOM" HEIGHT=16><font size="2"></font><font size="2">
          December 26, 2003</font></TD>
      </TR>
      <TR>
        <TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=16 align="center"><font size="2">
          A-3</font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><font size="2"></font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
          <div align="center"><font size="2">6.60%</font></div>
        </TD>
        <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=16><font size="2"></font></TD>
        <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=16><font size="2"></font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
          <div align="right"><font size="2">209,425</font></div>
        </TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><font size="2"></font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><font size="2"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;March
          25, 2003</font></TD>
        <TD colspan="3" VALIGN="BOTTOM" HEIGHT=16><font size="2"></font><font size="2">
          March 25, 2005</font></TD>
      </TR>
      <TR>
        <TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=16 align="center"><font size="2">
          A-4</font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><font size="2"></font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
          <div align="center"><font size="2">6.72%</font></div>
        </TD>
        <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=16><font size="2"></font></TD>
        <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=16><font size="2"></font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
          <div align="right"><font size="2">201,000</font></div>
        </TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><font size="2"></font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><font size="2"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December
          26, 2003</font></TD>
        <TD colspan="3" VALIGN="BOTTOM" HEIGHT=16><font size="2"></font><font size="2">
          December 26, 2005</font></TD>
      </TR>
      <TR>
        <TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=16 align="center"><font size="2">
          A-5</font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><font size="2"></font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
          <div align="center"><font size="2">6.83%</font></div>
        </TD>
        <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=16><font size="2"></font></TD>
        <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=16><font size="2"></font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
          <div align="right"><font size="2">313,000</font></div>
        </TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><font size="2"></font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><font size="2"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;March
          25, 2005</font></TD>
        <TD colspan="3" VALIGN="BOTTOM" HEIGHT=16><font size="2"></font><font size="2">
          March 25, 2007</font></TD>
      </TR>
      <TR>
        <TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=16 align="center"><font size="2">
          A-6</font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><font size="2"></font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
          <div align="center"><font size="2">6.96%</font></div>
        </TD>
        <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=16><font size="2"></font></TD>
        <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=16><font size="2"></font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
          <div align="right"><font size="2">223,000</font></div>
        </TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><font size="2"></font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><font size="2"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December
          26, 2005</font></TD>
        <TD colspan="3" VALIGN="BOTTOM" HEIGHT=16><font size="2"></font><font size="2">
          December 26, 2007</font></TD>
      </TR>
      <TR>
        <TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=16 align="center"><font size="2">
          A-7</font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><font size="2"></font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
          <div align="center"><font size="2">7.05%</font></div>
        </TD>
        <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=16><font size="2"></font></TD>
        <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=16><font size="2"></font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
          <div align="right"><font size="2">455,000</font></div>
        </TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><font size="2"></font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><font size="2"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;June
          25, 2007</font></TD>
        <TD colspan="3" VALIGN="BOTTOM" HEIGHT=16><font size="2"></font><font size="2">
          June 25, 2009</font></TD>
      </TR>
      <TR>
        <TD WIDTH="9%" VALIGN="BOTTOM" HEIGHT=16 align="center"><font size="2">
          A-8</font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><font size="2"></font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
          <div align="center"><font size="2">7.15%</font></div>
        </TD>
        <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=16><font size="2"></font></TD>
        <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=16><font size="2"></font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
          <div align="right"><font size="2">454,000</font></div>
        </TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><font size="2"></font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><font size="2"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December
          26, 2008</font></TD>
        <TD colspan="3" VALIGN="BOTTOM" HEIGHT=16><font size="2"></font><font size="2">
          June 25, 2009</font></TD>
      </TR>
      <TR valign="top">
        <TD WIDTH="9%" HEIGHT=16><font size="2"></font></TD>
        <TD COLSPAN=2 HEIGHT=16><font size="2"></font></TD>
        <TD COLSPAN=2 HEIGHT=16><font size="2"></font></TD>
        <TD WIDTH="1%" HEIGHT=16><font size="2"></font></TD>
        <TD colspan="3" HEIGHT=16>
          <hr noshade>
        </TD>
        <TD COLSPAN=2 HEIGHT=16><font size="2"></font></TD>
        <TD COLSPAN=2 HEIGHT=16><font size="2"></font></TD>
        <TD WIDTH="2%" HEIGHT=16><font size="2"></font></TD>
        <TD COLSPAN=2 HEIGHT=16 WIDTH="28%"><font size="2"></font></TD>
      </TR>
      <tr>
        <td width="9%" valign="BOTTOM" height=16><font size="2"></font></td>
        <td valign="BOTTOM" colspan=2 height=16><font size="2"></font></td>
        <td valign="BOTTOM" colspan=2 height=16><font size="2"></font></td>
        <td width="1%" valign="BOTTOM" height=16><font size="2"></font></td>
        <td width="1%" valign="BOTTOM" height=16><font size="2"> $</font></td>
        <td valign="BOTTOM" colspan=2 height=16>
          <div align="right"><font size="2">1,855,425</font></div>
        </td>
        <td valign="BOTTOM" colspan=2 height=16><font size="2"></font></td>
        <td valign="BOTTOM" colspan=2 height=16><font size="2"></font></td>
        <td width="2%" valign="BOTTOM" height=16><font size="2"></font></td>
        <td valign="BOTTOM" colspan=2 height=16 width="28%"><font size="2"></font></td>
      </tr>
      <TR>
        <TD VALIGN="BOTTOM" COLSPAN=6 HEIGHT=16><font size="2"> Current Maturities</font></TD>
        <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=16><font size="2"></font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
          <div align="right"><font size="2">(247,151</font></div>
        </TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><font size="2"> )</font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><font size="2"></font></TD>
        <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><font size="2"></font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16 WIDTH="28%"><font size="2"></font></TD>
      </TR>
      <TR>
        <TD VALIGN="BOTTOM" COLSPAN=6 HEIGHT=16><font size="2"> Unamort Discount</font></TD>
        <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=16><font size="2"></font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
          <div align="right"><font size="2">(110</font></div>
        </TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><font size="2"> )</font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><font size="2"></font></TD>
        <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><font size="2"></font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16 WIDTH="28%"><font size="2"></font></TD>
      </TR>
      <tr valign="top">
        <td width="9%" height=16><font size="2"></font></td>
        <td colspan=2 height=16><font size="2"></font></td>
        <td colspan=2 height=16><font size="2"></font></td>
        <td width="1%" height=16><font size="2"></font></td>
        <td colspan="3" height=16>
          <hr noshade>
        </td>
        <td colspan=2 height=16><font size="2"></font></td>
        <td colspan=2 height=16><font size="2"></font></td>
        <td width="2%" height=16><font size="2"></font></td>
        <td colspan=2 height=16 width="28%"><font size="2"></font></td>
      </tr>
      <TR>
        <TD VALIGN="BOTTOM" COLSPAN=6 HEIGHT=16><font size="2"> Long-term Debt</font></TD>
        <TD WIDTH="1%" VALIGN="BOTTOM" HEIGHT=16><font size="2"> $</font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16>
          <div align="right"><font size="2">1,608,164</font></div>
        </TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><font size="2"></font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16><font size="2"></font></TD>
        <TD WIDTH="2%" VALIGN="BOTTOM" HEIGHT=16><font size="2"></font></TD>
        <TD VALIGN="BOTTOM" COLSPAN=2 HEIGHT=16 WIDTH="28%"><font size="2"></font></TD>
      </TR>
      <tr valign="top">
        <td width="9%" height=16><font size="2"></font></td>
        <td colspan=2 height=16><font size="2"></font></td>
        <td colspan=2 height=16><font size="2"></font></td>
        <td width="1%" height=16><font size="2"></font></td>
        <td colspan="3" height=16>
          <hr noshade size="5">
        </td>
        <td colspan=2 height=16><font size="2"></font></td>
        <td colspan=2 height=16><font size="2"></font></td>
        <td width="2%" height=16><font size="2"></font></td>
        <td colspan=2 height=16 width="28%"><font size="2"></font></td>
      </tr>
    </TABLE>
    <P ALIGN="JUSTIFY"></P>
    <P ALIGN="JUSTIFY">The carrying value of the long-term debt approximates fair
      market value as of March 31, 2002. The current maturities stated above are
      based on the expected final payment dates rather than the final maturity
      date.</P>
    <P ALIGN="JUSTIFY"></P>
    <P ALIGN="JUSTIFY">The source of repayment for the Bonds is the ITC. The Servicer
      collects this non-bypassable charge from PPL Electric Utilities' retail
      consumers of electricity. The Servicer deposits ITC monthly collections
      into a General Subaccount maintained by the Trustee under the Indenture.
      The monthly ITC collections from the billing periods of December 2001 through
      February 2002 were $97 million in aggregate. Each quarter, such monies are
      used to make principal and interest payments on the Bonds, and to pay fees,
      costs and charges specified in the Indenture. The Trustee made a scheduled
      payment on March 25, 2002. The Indenture also includes a Reserve Subaccount
      that is maintained for the purpose of retaining any excess amount of ITC
      collections and investment earnings not released to the Company. The Indenture
      also provides for an Overcollateralization Subaccount. The funding level
      of this account is 0.5% of the initial principal amount of the Series 1999-1
      Bonds, funded ratably over the life of the Bonds. To meet the required Overcollateralization
      Subaccount level of $3.3 million, $313,000 was deposited on March 25, 2002.
      Additionally, an amount equal to 0.5% of the initial principal amount of
      the Bonds was deposited into the Capital Subaccount under the Indenture
      on the date of issuance. If amounts available in the General, Reserve and
      Overcollateralization Subaccounts are not sufficient on any payment date
      to make scheduled payments, the Trustee will draw on amounts in the Capital
      Subaccount in excess of $100,000. Any remaining amounts collateralizing
      the Bonds will be released to the Company upon final payment on the Bonds.</P>
    <P ALIGN="JUSTIFY"></P>
    <P ALIGN="JUSTIFY">At March 31, 2002, the following balances were reflected
      in the Subaccounts maintained by the Trustee:</P>
    <P ALIGN="JUSTIFY"></P>
    <TABLE BORDER=0 cellpadding=0 CELLSPACING=1 WIDTH=50%>
      <TR>
        <TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><font size="2"></font></TD>
        <TD WIDTH="59%" VALIGN="TOP" HEIGHT=16> <font size="2"><U>Subaccounts</U></font></TD>
        <TD WIDTH="36%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
          <div align="center"><font size="2"><U>Balance</u></font></div>
        </TD>
      </TR>
      <TR>
        <TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><font size="2"></font></TD>
        <TD WIDTH="59%" VALIGN="TOP" HEIGHT=16><font size="2"></font></TD>
        <TD WIDTH="36%" VALIGN="TOP" COLSPAN=4 HEIGHT=16>
          <div align="center"><font size="2">($ Thousands)</font></div>
        </TD>
      </TR>
      <TR>
        <TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><font size="2"></font></TD>
        <TD WIDTH="59%" VALIGN="TOP" HEIGHT=16><font size="2"> General</font></TD>
        <TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><font size="2"></font></TD>
        <TD WIDTH="5%" VALIGN="TOP" HEIGHT=16><font size="2"> $</font></TD>
        <TD WIDTH="19%" VALIGN="TOP" HEIGHT=16 align="right"><font size="2">-&nbsp;&nbsp;&nbsp;</font></TD>
        <TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><font size="2"></font></TD>
      </TR>
      <TR valign="bottom">
        <TD WIDTH="4%" HEIGHT=16><font size="2"></font></TD>
        <TD WIDTH="59%" HEIGHT=16><font size="2"> Reserve</font></TD>
        <TD WIDTH="3%" HEIGHT=16><font size="2"></font></TD>
        <TD WIDTH="5%" HEIGHT=16><font size="2"></font></TD>
        <TD WIDTH="19%" HEIGHT=16>
          <div align="right"><font size="2">15,202</font></div>
        </TD>
        <TD WIDTH="9%" HEIGHT=16><font size="2"></font></TD>
      </TR>
      <TR valign="bottom">
        <TD WIDTH="4%" HEIGHT=16><font size="2"></font></TD>
        <TD WIDTH="59%" HEIGHT=16><font size="2"> Overcollateralization</font></TD>
        <TD WIDTH="3%" HEIGHT=16><font size="2"></font></TD>
        <TD WIDTH="5%" HEIGHT=16><font size="2"></font></TD>
        <TD WIDTH="19%" HEIGHT=16>
          <div align="right"><font size="2">3,280</font></div>
        </TD>
        <TD WIDTH="9%" HEIGHT=16><font size="2"></font></TD>
      </TR>
      <TR valign="bottom">
        <TD WIDTH="4%" HEIGHT=16><font size="2"></font></TD>
        <TD WIDTH="59%" HEIGHT=16><font size="2"> Capital</font></TD>
        <TD WIDTH="3%" HEIGHT=16><font size="2"></font></TD>
        <TD WIDTH="5%" HEIGHT=16><font size="2"></font></TD>
        <TD WIDTH="19%" HEIGHT=16>
          <div align="right"><font size="2">12,138</font></div>
        </TD>
        <TD WIDTH="9%" HEIGHT=16><font size="2"></font></TD>
      </TR>
      <tr valign="top">
        <td width="4%" height=16><font size="2"></font></td>
        <td width="59%" height=16><font size="2"></font> </td>
        <td width="3%" height=16><font size="2"></font></td>
        <td colspan="2" height=16>
          <hr noshade>
        </td>
        <td width="9%" height=16><font size="2"></font></td>
      </tr>
      <TR valign="bottom">
        <TD WIDTH="4%" HEIGHT=16><font size="2"></font></TD>
        <TD WIDTH="59%" HEIGHT=16><font size="2"> Total</font></TD>
        <TD WIDTH="3%" HEIGHT=16><font size="2"></font></TD>
        <TD WIDTH="5%" HEIGHT=16><font size="2"> $</font></TD>
        <TD WIDTH="19%" HEIGHT=16>
          <div align="right"><font size="2">30,620</font></div>
        </TD>
        <TD WIDTH="9%" HEIGHT=16><font size="2"></font></TD>
      </TR>
      <TR>
        <TD WIDTH="4%" VALIGN="TOP" HEIGHT=16><font size="2"></font></TD>
        <TD WIDTH="59%" VALIGN="TOP" HEIGHT=16><font size="2"></font></TD>
        <TD WIDTH="3%" VALIGN="TOP" HEIGHT=16><font size="2"></font></TD>
        <TD colspan="2" VALIGN="TOP" HEIGHT=16>
          <hr noshade size="5">
        </TD>
        <TD WIDTH="9%" VALIGN="TOP" HEIGHT=16><font size="2"></font></TD>
      </TR>
    </TABLE>
    <P ALIGN="JUSTIFY"></P>
  <li>
    <p align="justify"><b>Significant Agreements and Related Party Transactions</B></P>

<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Under the Servicing Agreement, PPL Electric Utilities, as Servicer,
  is required to manage and administer the ITP of the Company and to collect the
  ITC on behalf of the Company. The Company pays an annual servicing fee of $1.25
  million to PPL Electric Utilities, and other administrative fees of $100,000.
  For the three months ended March&nbsp;31, 2002, the Company expensed servicing
  fees of approximately $313,000 and other administrative fees of $25,000. The
  Company expensed similar amounts in the three months ended March 31, 2001.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">At March 31, 2002, the Balance Sheet includes a receivable
  from PPL Electric Utilities of approximately $66 million for billed and unbilled
  ITC revenues.</P></ol>
<br><hr noshade><br>
<p align="center"><b><A NAME="MDA"></A><U>PPL Transition Bond Company, LLC</u></B></p>
<p></p>
<p align="left"><B>Item 2.&nbsp;&nbsp;&nbsp;<U>Management's Discussion and Analysis of Financial Condition
  and Results of Operations</u></b></p>
<P ALIGN="JUSTIFY"></P>
<p align="justify"><b>Forward-Looking Information</b></p>

<P ALIGN="JUSTIFY">Certain statements contained in this Form 10-Q concerning expectations,
  beliefs, plans, objectives, goals, strategies, future events or performance
  and underlying assumptions and other statements which are other than statements
  of historical facts are "forward-looking statements" within the meaning of the
  federal securities laws. Although PPL Electric Utilities and the Company believe
  that the expectations and assumptions reflected in these statements are reasonable,
  there can be no assurance that these expectations will prove to have been correct.
  These forward-looking statements involve a number of risks and uncertainties,
  and actual results may differ materially from the results discussed in the forward-looking
  statements. Any such forward-looking statements should be considered in conjunction
  with other documents of PPL Electric Utilities and the Company on file with
  the SEC.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">New factors that could cause actual results to differ materially
  from those described in forward-looking statements emerge from time to time,
  and it is not possible for PPL Electric Utilities or the Company to predict
  all of such factors, or the extent to which any such factor or combination of
  factors may cause actual results to differ from those contained in any forward-looking
  statement. Any forward-looking statement speaks only as of the date on which
  such statement is made, and neither PPL Electric Utilities nor the Company undertakes
  any obligation to update the information contained in such statement to reflect
  subsequent developments or information.</P>

<p align="justify"><b>Background</b></p>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Company was organized for the sole purpose of purchasing
  and owning ITP, issuing transition bonds, pledging its interest in ITP and other
  collateral to the Trustee under an Indenture between the Company and the Trustee
  to collateralize the Bonds, and performing activities that are necessary to
  accomplish these purposes. The Company is a Delaware limited liability company
  organized in March 1999 for the limited purposes of purchasing ITP and issuing
  Bonds secured by the ITP. The Company is wholly-owned by PPL Electric Utilities.
  The Company's organizational documents require it to operate in a manner so
  that its assets would not be consolidated with the bankruptcy estate of PPL
  Electric Utilities in the event PPL Electric Utilities becomes subject to a
  bankruptcy proceeding.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The following analysis of the financial condition and results
  of operations of the Company is in an abbreviated format pursuant to Instructions
  H(1)(a) and (b) of Form 10-Q. Such analysis should be read in conjunction with
  the Financial Statements and Notes to Condensed Financial Statements included
  in Item 1 above, and with the section entitled &quot;Management's Discussion
  and Analysis of Financial Condition and Results of Operations&quot; in the Company's
  Annual Report to the SEC on Form 10-K for the year ended December 31, 2001.</P>
<P ALIGN="JUSTIFY"></P>
<p align="justify"><b>Results of Operations</b></p>
<P ALIGN="JUSTIFY"></P>
<p align="justify"><b><u>Revenues</u></b></p>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Revenue generated from the ITP for the quarters ended March
  31, 2002 and 2001 were approximately $91 million and $108 million. The decrease
  in ITC revenues was due to a decrease in electricity delivery sales by PPL Electric
  and lower ITC rates.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">During the quarters ended March 31, 2002 and 2001, the Company
  also earned approximately $57,000 and $190,000 in interest from the Capital
  Subaccount maintained by the Trustee and from temporary investments. The decrease
  in interest income in 2002 reflects a lower rate of return on investments in
  the Capital Subaccount in 2002 compared with 2001. </P>
<P ALIGN="JUSTIFY"></P>
<p align="justify"><b><u>Expenses</u></b></p>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">During the three months ended March 31, 2002 and 2001, the
  Company incurred interest expense of approximately $34 million and $38 million.
  Interest expense includes interest on the Bonds and amortization of debt issuance
  expenses and discounts on the Bonds. The decrease in interest expense was the
  result of the scheduled repayments on the Bonds. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Amortization of the ITP (which is based on ITC revenues, interest
  accruals and other fees) was approximately $56 million and $69 million for the
  three months ended March 31, 2002 and 2001. The decrease reflects lower ITC
  revenues, as noted above.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">For the three months ended March 31, 2002 and 2001, the Company
  also incurred administrative and general expenses of approximately $422,000
  and $424,000, including servicing fees of approximately $313,000 and other administrative
  fees of $25,000 in each period. </P>
<P ALIGN="JUSTIFY"></P>


<P ALIGN="JUSTIFY"><B>ITC Remittances and Debt Servicing</B></p>

<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The principal amount of the Bonds, interest, fees and funding
  of the Overcollateralization Subaccount are being recovered through the ITC
  payable by retail consumers of electricity within PPL Electric Utilities' service
  territory who receive its electric delivery service. As part of PPL Electric
  Utilities' responsibility as Servicer under the Servicing Agreement, PPL Electric
  Utilities remitted to the Trustee approximately $97 million of ITC collections
  for the billing periods of December 2001 to February 2002. </P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">All scheduled quarterly Bond principal payments, interest payments
  and all related expenses were made on March 25, 2002. On March 25, 2002, a scheduled
  principal payment of $68 million was made on the class A-3 Bonds. The Overcollateralization
  Subaccount was funded by $313,000 on March 25, 2002, to reach its required funding
  level.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">The Servicing Agreement also requires PPL Electric Utilities,
  as Servicer, to file adjustment requests on each calculation date, and the Competition
  Act and the PUC Restructuring Order require the PUC to act upon these requests
  within specified time periods. These adjustment requests are based on actual
  ITC collections and updated assumptions by the Servicer as to projected future
  usage of electricity by customers, expected delinquencies and write-offs, and
  future payments and expenses relating to the ITP and the Bonds. The Servicer
  filed such an adjustment request with the PUC on December 15, 2001. The request
  was approved and revised rates became effective on January 1, 2002.</P>
<br><hr noshade><br>
<p align="justify"><b><u><A NAME="RISK"></A>Item 3. Quantitative and Qualitative
  Disclosures About Market Risk</u></b></p>

<P ALIGN="JUSTIFY"></p>

<P ALIGN="JUSTIFY">Not applicable.</P>
<br><hr noshade><br>
<TABLE CELLSPACING=0 BORDER=0 cellpadding=0 WIDTH=100%>
  <TR>
    <TD VALIGN="TOP" COLSPAN=4> <B><U><A NAME="LEGAL"></A>PART II. OTHER INFORMATION</u></b></TD>
  </TR>
  <TR>
    <TD VALIGN="TOP" COLSPAN=4>&nbsp;</TD>
  </TR>
  <TR>
    <TD VALIGN="TOP" COLSPAN=4> <B><U>Item 1. Legal Proceedings</u></b></TD>
  </TR>
  <TR>
    <TD VALIGN="TOP" COLSPAN=4>&nbsp;</TD>
  </TR>
  <TR>
    <TD VALIGN="TOP" COLSPAN=4> None.</TD>
  </TR>
  <TR>
    <TD VALIGN="TOP" COLSPAN=4>&nbsp;</TD>
  </TR>
  <TR>
    <TD VALIGN="TOP" COLSPAN=4> <B><U><A NAME="EXHIBITS"></A>Item 6. Exhibits
      and Reports on Form 8-K</u></b></TD>
  </TR>
  <TR>
    <TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
    <TD WIDTH="5%" VALIGN="TOP">&nbsp;</TD>
    <TD WIDTH="89%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
    <TD WIDTH="5%" VALIGN="TOP"> (a)</TD>
    <TD WIDTH="89%" VALIGN="TOP" COLSPAN=2> Exhibits</TD>
  </TR>
  <TR>
    <TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
    <TD WIDTH="5%" VALIGN="TOP">&nbsp;</TD>
    <TD WIDTH="89%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
    <TD WIDTH="5%" VALIGN="TOP">&nbsp;</TD>
    <TD WIDTH="4%" VALIGN="TOP">&nbsp;</TD>
    <TD WIDTH="85%" VALIGN="TOP"> <a href="ppl10qtbc_3-02exhibit99.htm">99 - Quarterly Servicer's
      Certificate</a></TD>
  </TR>
  <TR>
    <TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
    <TD WIDTH="5%" VALIGN="TOP">&nbsp;</TD>
    <TD WIDTH="89%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
    <TD WIDTH="5%" VALIGN="TOP"> (b)</TD>
    <TD WIDTH="89%" VALIGN="TOP" COLSPAN=2> Reports on Form 8-K</TD>
  </TR>
  <TR>
    <TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
    <TD WIDTH="5%" VALIGN="TOP">&nbsp;</TD>
    <TD WIDTH="89%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
    <TD WIDTH="5%" VALIGN="TOP">&nbsp;</TD>
    <TD WIDTH="89%" VALIGN="TOP" COLSPAN=2> None.</TD>
  </TR>
</TABLE>
<br><hr noshade><br>
<P ALIGN="CENTER"><A NAME="GLOSSARY"></A><B>GLOSSARY OF TERMS AND ABBREVIATIONS</B></p>


<p align="justify"><b>Capital Subaccount</B> - An account held by the Trustee
  under the Indenture, which was funded by a contribution to PPL Transition Bond
  Company, LLC by PPL Electric Utilities at the date of issuance of each series
  of transition bonds.</P>
<P ALIGN="JUSTIFY"></P>
<p align="justify"><b>CEP</B> <B>Securities</B> - CEP Securities Co. LLC, a Delaware
  limited liability company and formerly an indirect wholly-owned subsidiary of
  PPL Electric Utilities. Effective July 1, 2000, CEP Securities became an indirect,
  wholly-owned subsidiary of PPL Energy Funding Corporation, a direct subsidiary
  of PPL Corporation.</P>
<P ALIGN="JUSTIFY"></P>
<p align="justify"><b>Competition</B> <B>Act</B> - The Pennsylvania Electricity
  Generation Customer Choice and Competition Act, enacted in Pennsylvania in December
  1996.</P>
<P ALIGN="JUSTIFY"></P>
<p align="justify"><b>General Subaccount</B> - An account held by the Trustee
  under the Indenture, into which ITC remittances from the Servicer are deposited.
  The Trustee allocates the funds from the General Subaccount to other subaccounts
  on the quarterly payment dates for the transition bonds.</P>
<P ALIGN="JUSTIFY"></P>
<p align="justify"><b>Indenture</B> - The Indenture entered into by PPL Transition
  Bond Company, LLC and the Trustee, providing for the issuance of the transition
  bonds.</P>
<P ALIGN="JUSTIFY"></P>
<p align="justify"><b>ITC</B> - Intangible Transition Charge, which PPL Electric
  Utilities has been authorized by the PUC to impose on customer bills and to
  collect through a non-bypassable billing mechanism to recover Qualified Transition
  Expenses.</P>
<P ALIGN="JUSTIFY"></P>
<p align="justify"><b>ITP </B>-<B> </B>Intangible Transition Property, which is
  the property right created under the Competition Act, representing the irrevocable
  right of PPL Transition Bond Company, LLC to receive, through the ITC, amounts
  sufficient to recover all Qualified Transition Expenses.</P>
<P ALIGN="JUSTIFY"></P>
<p align="justify"><b>Overcollateralization Subaccount</B><I> - </I>An account
  held by the Trustee under the Indenture, which is funded ratably from collections
  of the ITC over the term of each series of transition bonds.</P>
<P ALIGN="JUSTIFY"></P>
<p align="justify"><b>PPL Electric Utilities</B> - PPL Electric Utilities Corporation,
  the sole member of PPL Transition Bond Company, LLC.</P>
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY"> <b>PUC</b> - Pennsylvania Public Utility Commission.</P>
<P ALIGN="JUSTIFY"></P>
<p align="justify"><b>PUC Restructuring Order<I> </i></B><I>- </I>The final order
  issued by the PUC to PPL Electric Utilities in August 1998, in connection with
  PPL Electric Utilities' restructuring filing under the Competition Act, as supplemented
  by a May 1999 PUC order.</P>
<P ALIGN="JUSTIFY"></P>
<p align="justify"><b>Qualified<I> </I>Transition<I> </I>Expenses</B> - The transition
  or stranded costs of an electric utility approved by the PUC for recovery through
  the issuance of transition bonds under the Customer Choice Act; the costs of
  retiring existing debt or equity capital of the electric utility or its holding
  company parent, including accrued interest and acquisition or redemption premium,
  costs of defeasance, and other related fees, costs and charges, through the
  issuance of transition bonds or the assignment, sale or other transfer of ITP;
  and the costs incurred to issue, service or refinance the transition bonds,
  including accrued interest and acquisition or redemption premium, and other
  related fees, costs and charges associated with the transition bonds, or to
  assign, sell or otherwise transfer ITP.</P>
<P ALIGN="JUSTIFY"></P>
<p align="justify"><b>Reserve</B> <B>Subaccount</B> - An account held by the Trustee
  under the Indenture, which consists of remaining funds available after required
  allocations on the quarterly payment dates for the transition bonds.</P>
<P ALIGN="JUSTIFY"></P>
<p align="justify"><b>SEC</B> - Securities and Exchange Commission.</P>
<P ALIGN="JUSTIFY"></P>
<p align="justify"><b>Servicer</B> - PPL Electric Utilities acting in this capacity
  under the Servicing Agreement. In this capacity, PPL Electric Utilities calculates,
  bills and collects the ITC, and maintains applicable accounting records, among
  other duties.</P>
<P ALIGN="JUSTIFY"></P>
<p align="justify"><b>Servicing</B> <B>Agreement</B> - The Intangible Property
  Servicing Agreement between PPL Electric Utilities, as Servicer, and PPL Transition
  Bond Company, LLC, as Issuer.</P>
<P ALIGN="JUSTIFY"></P>
<p align="justify"><b>Trustee </B>-<B> </B>The Bank of New York, a New York banking
  corporation, as Trustee under the Indenture.</P>
  <br><hr noshade><br>
  <P ALIGN="JUSTIFY">&nbsp;</P>&nbsp;<P ALIGN="JUSTIFY">&nbsp;
</P><P ALIGN="JUSTIFY"></P>&nbsp;<P ALIGN="JUSTIFY"></P>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=0 WIDTH=100%>
  <TR>
    <TD VALIGN="TOP" COLSPAN=4>
      <div align="center"><U><A NAME="SIGNATURES"></A>SIGNATURES</u></div>
    </TD>
  </TR>
  <TR>
    <TD VALIGN="TOP" COLSPAN=4>&nbsp;</TD>
  </TR>
  <TR>
    <TD VALIGN="TOP" COLSPAN=4> 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.</TD>
  </TR>
  <TR>
    <TD VALIGN="TOP" COLSPAN=4>&nbsp;</TD>
  </TR>
  <TR>
    <TD VALIGN="TOP" COLSPAN=4>&nbsp;</TD>
  </TR>
  <TR>
    <TD WIDTH="31%" VALIGN="TOP">&nbsp;</TD>
    <TD WIDTH="69%" VALIGN="TOP" COLSPAN=3>
      <div align="center"><B><U>PPL Transition Bond Company, LLC</u></b></div>
    </TD>
  </TR>
  <TR>
    <TD WIDTH="31%" VALIGN="TOP">&nbsp;</TD>
    <TD WIDTH="69%" VALIGN="TOP" COLSPAN=3>
      <div align="center">(Registrant)</div>
    </TD>
  </TR>
  <TR>
    <TD VALIGN="TOP" COLSPAN=4>&nbsp;</TD>
  </TR>
  <TR>
    <TD VALIGN="TOP" COLSPAN=4>&nbsp;</TD>
  </TR>
  <TR>
    <TD VALIGN="TOP" COLSPAN=4>&nbsp;</TD>
  </TR>
  <TR>
    <TD VALIGN="TOP" COLSPAN=4>&nbsp;</TD>
  </TR>
  <TR>
    <TD WIDTH="49%" VALIGN="TOP" COLSPAN=2> Date: May 8, 2002</TD>
    <TD WIDTH="51%" VALIGN="TOP" COLSPAN=2> <U>/s/ James S. Pennington &nbsp;</U></TD>
  </TR>
  <TR>
    <TD WIDTH="53%" VALIGN="TOP" COLSPAN=3>&nbsp;</TD>
    <TD WIDTH="47%" VALIGN="TOP"> James S. Pennington, Manager</TD>
  </TR>
  <TR>
    <TD VALIGN="TOP" COLSPAN=4>&nbsp;</TD>
  </TR>
  <TR>
    <TD VALIGN="TOP" COLSPAN=4>&nbsp;</TD>
  </TR>
  <TR>
    <TD WIDTH="49%" VALIGN="TOP" COLSPAN=2>&nbsp;</TD>
    <TD WIDTH="51%" VALIGN="TOP" COLSPAN=2> <U>/s/ Stephen C. May &nbsp;</U></TD>
  </TR>
  <TR>
    <TD WIDTH="53%" VALIGN="TOP" COLSPAN=3>&nbsp;</TD>
    <TD WIDTH="47%" VALIGN="TOP"> Stephen C. May, Treasurer</TD>
  </TR>
</TABLE>
</BODY>
</HTML>
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{"company-data": {"conformed-name": "PP&L TRANSITION BOND CO INC", "cik": "0001083000", "assigned-sic": "6189", "irs-number": "233004428", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "333-75369", "film-number": "02638211"}, "business-address": {"street1": "C/O PP&L RESOURCES INC", "street2": "TWO NORTH NINTH ST", "city": "ALLENTOWN", "state": "PA", "zip": "18101", "phone": "6107747934"}, "mail-address": {"street1": "C/O PP&L RESOURCES INC", "street2": "TWO NORTH NINTH STREET", "city": "ALLENTOWN", "state": "PA", "zip": "18101"}}
Form 10-Q PPL Transisiton Bond Co.
United States
Securities and Exchange Commission
Washington, DC 20549
Form 10-Q
THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN
GENERAL INSTRUCTIONS H(1) (a) AND (b) OF FORM 10-Q AND
IS THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT
[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
      OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended
March
      31, 2002
OR
[ ]
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
Registrant; State of Incorporation;
Address; and Telephone No.
IRS Employer
Identification No.
333-75369
PPL Transition Bond Company, LLC
(Delaware)
Two North Ninth Street, GENA92, Room 3
Allentown, PA 18101-1179
(610) 774-7934
23-3004428
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 [ ]
PPL TRANSITION BOND COMPANY, LLC
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 2002
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Page
Item 1. Financial Statements
Condensed Statement of Operations
      and Changes in Member's Equity
1
Condensed Statement of Cash
      Flows
2
Condensed Balance Sheet
3
Notes to Condensed Financial Statements
4
Item 2. Management's Discussion
      and Analysis of Financial Condition and Results of Operations
7
Item 3. Quantitative and Qualitative
      Disclosures About Market Risk
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
8
Item 6. Exhibits and Reports
      on Form 8-K
8
GLOSSARY OF TERMS AND ABBREVIATIONS
9
SIGNATURES
10
PPL
      TRANSITION BOND COMPANY, LLC
Part 1. FINANCIAL
      INFORMATION
Item 1. Financial
      Statements
CONDENSED STATEMENT OF OPERATIONS
      AND CHANGES IN MEMBER'S EQUITY
(Unaudited)
(Thousands of Dollars)
Three Months Ended
March 31,
2002
2001
Revenue
Intangible transition
      charge revenue
$
90,671
$
107,565
Interest income
57
190
Total revenue
90,728
107,755
Expenses
Amortization of intangible
      transition property
56,374
69,320
Interest expense
33,875
37,835
Administrative and general
      expenses
422
424
Total expenses
90,671
107,579
Operating Income
57
176
Income tax expense
24
73
Net Income
33
103
Member's equity - beginning
      of period
12,468
12,330
Distribution to Member
(200
)
Member's equity - end
      of period
$
12,301
$
12,433
The accompanying Notes to Condensed
        Financial Statements are an integral part of the financial statements.
PPL
      TRANSITION BOND COMPANY, LLC
CONDENSED STATEMENT
      OF CASH FLOWS
(Unaudited)
(Thousands of Dollars)
Three Months Ended
March 31,
2002
2001
Cash Flows From Operating
      Activities
Net Income
$
33
$
103
Adjustments to reconcile
      net income to net cash provided by
operating activities:
Amortization of intangible
      transition property
56,374
69,320
Amortization of debt
      issuance expenses
616
732
Amortization of debt
      discount
9
14
Changes in current assets
      and liabilities:
Intangible transition
      charge receivable from Servicer
6,306
4,420
Other
(327
)
43
Other operating activities
      - net
917
1,140
Net cash provided by operating
      activities
63,928
75,772
Cash Flows From Investing
      Activities
Change in restricted
      funds
3,932
(9,774
)
Net cash provided by (used in)
      investing activities
3,932
(9,774
)
Cash Flows From Financing
      Activities
Payment of principal
      on bonds
(67,883
)
(65,820
)
Distribution to Member
(200
)
Net cash used in financing activities
(68,083
)
(65,820
)
Net Increase (Decrease)
      in Cash and Cash Equivalents
(223
)
178
Cash and Cash Equivalents
      at Beginning of Period
588
793
Cash and Cash Equivalents
      at End of Period
$
365
$
971
The accompanying Notes to Condensed
        Financial Statements are an integral part of the financial statements.
PPL
      TRANSITION BOND COMPANY, LLC
CONDENSED BALANCE
      SHEET
(Unaudited)
(Thousands of Dollars)
March 31,
2002
December 31,
2001
ASSETS
Current Assets
Cash and cash equivalents
$
365
$
588
Intangible transition
      charges receivable from Servicer
65,537
71,843
Other current assets
34
57
Current assets
65,936
72,488
Noncurrent Assets
Intangible transition
      property, net
1,772,888
1,829,852
Unamortized debt issuance
      expenses
8,228
8,844
Restricted funds
30,620
34,552
Noncurrent assets
1,811,736
1,873,248
Total assets
$
1,877,672
$
1,945,736
LIABILITIES AND MEMBER'S
      EQUITY
Current Liabilities
Long-term debt
$
247,151
$
245,476
Interest accrued
1,788
1,850
Other
2,382
2,670
Current liabilities
251,321
249,996
Noncurrent Liabilities
Long-term debt, net of
      discount
1,608,164
1,677,713
Other
5,886
5,559
Noncurrent liabilities
1,614,050
1,683,272
Commitments and Contingent
      Liabilities
Member's Equity
12,301
12,468
Total liabilities and member's
      equity
$
1,877,672
$
1,945,736
The accompanying Notes to Condensed
        Financial Statements are an integral part of the financial statements.
PPL Transition Bond Company, LLC
Notes to Condensed Financial Statements
Terms and abbreviations appearing in Notes to Condensed Financial
  Statements are explained in the glossary.
Interim Financial Statements
Certain information in footnote disclosures, normally included
      in financial statements prepared in accordance with accounting standards
      generally accepted in the U.S., has been condensed or omitted in this Form
      10-Q pursuant to the rules and regulations of the SEC. These condensed financial
      statements should be read in conjunction with the financial statements and
      notes included in PPL Transition Bond Company, LLC's Annual Report to the
      SEC on Form 10-K for the year ended December 31, 2001.
Nature of Operations
The condensed financial statements include the accounts
      of PPL Transition Bond Company, LLC. The Company is a limited liability
      company established under the laws of the State of Delaware, and was formed
      on March 25, 1999, pursuant to the filing of a certificate of formation
      with the Delaware Secretary of State and a limited liability company agreement.
      PPL Electric Utilities is the sole member of the Company.
The Company was organized for the sole purpose of purchasing
      and owning ITP, issuing transition bonds (the Bonds), pledging its interest
      in ITP and other collateral to the Trustee under an Indenture between the
      Company and the Trustee to collateralize the Bonds, and performing activities
      that are necessary to accomplish these purposes. ITP represents the irrevocable
      right of PPL Electric Utilities, or its successor or assignee, to collect
      a non-bypassable ITC from customers pursuant to the PUC Restructuring Order
      in accordance with the Competition Act. The PUC Restructuring Order authorized
      the ITC to be sufficient to recover up to $2.85 billion aggregate principal
      amount of Bonds, plus an amount sufficient to provide for any credit enhancement,
      to fund any reserves and to pay interest, redemption premiums, servicing
      fees and other expenses relating to the Bonds.
The Company's organizational documents require it to operate
      in a manner so that its assets would not be consolidated with the bankruptcy
      estate of PPL Electric Utilities in the event PPL Electric Utilities becomes
      subject to a bankruptcy proceeding. Both PPL Electric Utilities and the
      Company have treated the transfer of the ITP to the Company as a sale under
      applicable law. The Bonds are treated as debt obligations of the Company.
      The assets of the Company are not available to creditors of PPL Electric
      Utilities or PPL Corporation, and the ITP is legally not an asset of PPL
      Electric Utilities or PPL Corporation. The Company is expected to terminate
      its existence after final maturity of the Bonds.
The Company issued $2.42 billion of Bonds in eight different
      classes on August 10, 1999. See Note 4 for additional information.
Summary of Significant Accounting Policies
Management's Estimates
The preparation of condensed financial statements in conformity
      with generally accepted accounting principles requires management to make
      estimates and assumptions. These estimates and assumptions will affect the
      reported amount of revenues, expenses, assets and liabilities, and disclosure
      of contingencies. Actual results could differ from these estimates.
Cash and Cash Equivalents
The Company considers all liquid debt instruments purchased
      with a maturity of three months or less to be cash equivalents. Cash and
      Cash Equivalents do not include Restricted Funds.
Restricted Funds
Under the Indenture, the Company deposited an amount equal
      to 0.5% of the initial principal amount of the Series 1999-1 Bonds into
      the Capital Subaccount with the Trustee. This amount was contributed by
      PPL Electric Utilities to the Company. This account is the last account
      drawn in the event funds are insufficient to make scheduled allocations.
      If the Capital Subaccount is used, it will be replenished from ITC remittances
      to its original level through the periodic reconciliation process. The Indenture
      also provides for an Overcollateralization Subaccount. The funding level
      of this account is 0.5% of the initial principal amount of the Series 1999-1
      Bonds, funded ratably over the life of the Bonds. Any excess amounts of
      ITC collections and investment earnings not released to the Company are
      deposited into a Reserve Subaccount. Accordingly, the Capital Subaccount,
      Overcollateralization Subaccount, and Reserve Subaccount are classified
      as "Restricted Funds" on the Balance Sheet.
Amortization of Intangible Transition Property
The ITP was recorded at the acquired cost and is being
      amortized over the life of the Bonds, based on ITC revenues, interest accruals
      and other fees. The ITP is solely the property of the Company.
Amortization of Debt Issuance Costs and Discount on
      Debt
The costs associated with the issuance of the Bonds have
      been capitalized and are being amortized over the life of the Bonds, utilizing
      the effective interest method.
Income Taxes
The Company is a limited liability company and has elected
      to be disregarded as a separate entity for federal and state income tax
      purposes. The Company's taxable income or loss is included in the consolidated
      federal and state income tax returns of its member. The Condensed Statement
      of Operations and Changes in Member's Equity reflects the Company's pro
      rata allocation of its Member's consolidated income taxes in accordance
      with its Member's tax sharing policy.
Reclassification
Certain amounts in the March 31, 2001 and December 31,
      2001 financial statements have been reclassified to conform to the current
      presentation.
Long-Term Debt and Source of Repayment
In August 1999, the Company issued $2.42 billion of Series
      1999-1 Bonds. The Bonds consist of eight classes. The Company used the proceeds
      from the Bonds to purchase ITP from CEP Securities. PPL Electric Utilities
      arranged for the formation of CEP Securities to provide flexibility to issue
      multiple tranches of transition bonds at different dates. The Bonds are
      collateralized by the ITP and the amounts in the subaccounts maintained
      by the Trustee under the Indenture (as described below).
Scheduled maturities and interest rates for the Bonds at
      March 31, 2002 are:
Class
Bond Rate
Amount
Expected
          Final
Payment Date
Final
          Maturity Date
A-1
6.08%
$
0
March
          25, 2001
March 25, 2003
A-2
6.41%
0
December
          26, 2001
December 26, 2003
A-3
6.60%
209,425
March
          25, 2003
March 25, 2005
A-4
6.72%
201,000
December
          26, 2003
December 26, 2005
A-5
6.83%
313,000
March
          25, 2005
March 25, 2007
A-6
6.96%
223,000
December
          26, 2005
December 26, 2007
A-7
7.05%
455,000
June
          25, 2007
June 25, 2009
A-8
7.15%
454,000
December
          26, 2008
June 25, 2009
$
1,855,425
Current Maturities
(247,151
)
Unamort Discount
(110
)
Long-term Debt
$
1,608,164
The carrying value of the long-term debt approximates fair
      market value as of March 31, 2002. The current maturities stated above are
      based on the expected final payment dates rather than the final maturity
      date.
The source of repayment for the Bonds is the ITC. The Servicer
      collects this non-bypassable charge from PPL Electric Utilities' retail
      consumers of electricity. The Servicer deposits ITC monthly collections
      into a General Subaccount maintained by the Trustee under the Indenture.
      The monthly ITC collections from the billing periods of December 2001 through
      February 2002 were $97 million in aggregate. Each quarter, such monies are
      used to make principal and interest payments on the Bonds, and to pay fees,
      costs and charges specified in the Indenture. The Trustee made a scheduled
      payment on March 25, 2002. The Indenture also includes a Reserve Subaccount
      that is maintained for the purpose of retaining any excess amount of ITC
      collections and investment earnings not released to the Company. The Indenture
      also provides for an Overcollateralization Subaccount. The funding level
      of this account is 0.5% of the initial principal amount of the Series 1999-1
      Bonds, funded ratably over the life of the Bonds. To meet the required Overcollateralization
      Subaccount level of $3.3 million, $313,000 was deposited on March 25, 2002.
      Additionally, an amount equal to 0.5% of the initial principal amount of
      the Bonds was deposited into the Capital Subaccount under the Indenture
      on the date of issuance. If amounts available in the General, Reserve and
      Overcollateralization Subaccounts are not sufficient on any payment date
      to make scheduled payments, the Trustee will draw on amounts in the Capital
      Subaccount in excess of $100,000. Any remaining amounts collateralizing
      the Bonds will be released to the Company upon final payment on the Bonds.
At March 31, 2002, the following balances were reflected
      in the Subaccounts maintained by the Trustee:
Subaccounts
Balance
($ Thousands)
General
$
-
Reserve
15,202
Overcollateralization
3,280
Capital
12,138
Total
$
30,620
Significant Agreements and Related Party Transactions
Under the Servicing Agreement, PPL Electric Utilities, as Servicer,
  is required to manage and administer the ITP of the Company and to collect the
  ITC on behalf of the Company. The Company pays an annual servicing fee of $1.25
  million to PPL Electric Utilities, and other administrative fees of $100,000.
  For the three months ended March 31, 2002, the Company expensed servicing
  fees of approximately $313,000 and other administrative fees of $25,000. The
  Company expensed similar amounts in the three months ended March 31, 2001.
At March 31, 2002, the Balance Sheet includes a receivable
  from PPL Electric Utilities of approximately $66 million for billed and unbilled
  ITC revenues.
PPL Transition Bond Company, LLC
Item 2.
Management's Discussion and Analysis of Financial Condition
  and Results of Operations
Forward-Looking Information
Certain statements contained in this Form 10-Q concerning expectations,
  beliefs, plans, objectives, goals, strategies, future events or performance
  and underlying assumptions and other statements which are other than statements
  of historical facts are "forward-looking statements" within the meaning of the
  federal securities laws. Although PPL Electric Utilities and the Company believe
  that the expectations and assumptions reflected in these statements are reasonable,
  there can be no assurance that these expectations will prove to have been correct.
  These forward-looking statements involve a number of risks and uncertainties,
  and actual results may differ materially from the results discussed in the forward-looking
  statements. Any such forward-looking statements should be considered in conjunction
  with other documents of PPL Electric Utilities and the Company on file with
  the SEC.
New factors that could cause actual results to differ materially
  from those described in forward-looking statements emerge from time to time,
  and it is not possible for PPL Electric Utilities or the Company to predict
  all of such factors, or the extent to which any such factor or combination of
  factors may cause actual results to differ from those contained in any forward-looking
  statement. Any forward-looking statement speaks only as of the date on which
  such statement is made, and neither PPL Electric Utilities nor the Company undertakes
  any obligation to update the information contained in such statement to reflect
  subsequent developments or information.
Background
The Company was organized for the sole purpose of purchasing
  and owning ITP, issuing transition bonds, pledging its interest in ITP and other
  collateral to the Trustee under an Indenture between the Company and the Trustee
  to collateralize the Bonds, and performing activities that are necessary to
  accomplish these purposes. The Company is a Delaware limited liability company
  organized in March 1999 for the limited purposes of purchasing ITP and issuing
  Bonds secured by the ITP. The Company is wholly-owned by PPL Electric Utilities.
  The Company's organizational documents require it to operate in a manner so
  that its assets would not be consolidated with the bankruptcy estate of PPL
  Electric Utilities in the event PPL Electric Utilities becomes subject to a
  bankruptcy proceeding.
The following analysis of the financial condition and results
  of operations of the Company is in an abbreviated format pursuant to Instructions
  H(1)(a) and (b) of Form 10-Q. Such analysis should be read in conjunction with
  the Financial Statements and Notes to Condensed Financial Statements included
  in Item 1 above, and with the section entitled "Management's Discussion
  and Analysis of Financial Condition and Results of Operations" in the Company's
  Annual Report to the SEC on Form 10-K for the year ended December 31, 2001.
Results of Operations
Revenues
Revenue generated from the ITP for the quarters ended March
  31, 2002 and 2001 were approximately $91 million and $108 million. The decrease
  in ITC revenues was due to a decrease in electricity delivery sales by PPL Electric
  and lower ITC rates.
During the quarters ended March 31, 2002 and 2001, the Company
  also earned approximately $57,000 and $190,000 in interest from the Capital
  Subaccount maintained by the Trustee and from temporary investments. The decrease
  in interest income in 2002 reflects a lower rate of return on investments in
  the Capital Subaccount in 2002 compared with 2001.
Expenses
During the three months ended March 31, 2002 and 2001, the
  Company incurred interest expense of approximately $34 million and $38 million.
  Interest expense includes interest on the Bonds and amortization of debt issuance
  expenses and discounts on the Bonds. The decrease in interest expense was the
  result of the scheduled repayments on the Bonds.
Amortization of the ITP (which is based on ITC revenues, interest
  accruals and other fees) was approximately $56 million and $69 million for the
  three months ended March 31, 2002 and 2001. The decrease reflects lower ITC
  revenues, as noted above.
For the three months ended March 31, 2002 and 2001, the Company
  also incurred administrative and general expenses of approximately $422,000
  and $424,000, including servicing fees of approximately $313,000 and other administrative
  fees of $25,000 in each period.
ITC Remittances and Debt Servicing
The principal amount of the Bonds, interest, fees and funding
  of the Overcollateralization Subaccount are being recovered through the ITC
  payable by retail consumers of electricity within PPL Electric Utilities' service
  territory who receive its electric delivery service. As part of PPL Electric
  Utilities' responsibility as Servicer under the Servicing Agreement, PPL Electric
  Utilities remitted to the Trustee approximately $97 million of ITC collections
  for the billing periods of December 2001 to February 2002.
All scheduled quarterly Bond principal payments, interest payments
  and all related expenses were made on March 25, 2002. On March 25, 2002, a scheduled
  principal payment of $68 million was made on the class A-3 Bonds. The Overcollateralization
  Subaccount was funded by $313,000 on March 25, 2002, to reach its required funding
  level.
The Servicing Agreement also requires PPL Electric Utilities,
  as Servicer, to file adjustment requests on each calculation date, and the Competition
  Act and the PUC Restructuring Order require the PUC to act upon these requests
  within specified time periods. These adjustment requests are based on actual
  ITC collections and updated assumptions by the Servicer as to projected future
  usage of electricity by customers, expected delinquencies and write-offs, and
  future payments and expenses relating to the ITP and the Bonds. The Servicer
  filed such an adjustment request with the PUC on December 15, 2001. The request
  was approved and revised rates became effective on January 1, 2002.
Item 3. Quantitative and Qualitative
  Disclosures About Market Risk
Not applicable.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 6. Exhibits
      and Reports on Form 8-K
(a)
Exhibits
99 - Quarterly Servicer's
      Certificate
(b)
Reports on Form 8-K
None.
GLOSSARY OF TERMS AND ABBREVIATIONS
Capital Subaccount
- An account held by the Trustee
  under the Indenture, which was funded by a contribution to PPL Transition Bond
  Company, LLC by PPL Electric Utilities at the date of issuance of each series
  of transition bonds.
CEP
Securities
- CEP Securities Co. LLC, a Delaware
  limited liability company and formerly an indirect wholly-owned subsidiary of
  PPL Electric Utilities. Effective July 1, 2000, CEP Securities became an indirect,
  wholly-owned subsidiary of PPL Energy Funding Corporation, a direct subsidiary
  of PPL Corporation.
Competition
Act
- The Pennsylvania Electricity
  Generation Customer Choice and Competition Act, enacted in Pennsylvania in December
  1996.
General Subaccount
- An account held by the Trustee
  under the Indenture, into which ITC remittances from the Servicer are deposited.
  The Trustee allocates the funds from the General Subaccount to other subaccounts
  on the quarterly payment dates for the transition bonds.
Indenture
- The Indenture entered into by PPL Transition
  Bond Company, LLC and the Trustee, providing for the issuance of the transition
  bonds.
ITC
- Intangible Transition Charge, which PPL Electric
  Utilities has been authorized by the PUC to impose on customer bills and to
  collect through a non-bypassable billing mechanism to recover Qualified Transition
  Expenses.
ITP
-
Intangible Transition Property, which is
  the property right created under the Competition Act, representing the irrevocable
  right of PPL Transition Bond Company, LLC to receive, through the ITC, amounts
  sufficient to recover all Qualified Transition Expenses.
Overcollateralization Subaccount
-
An account
  held by the Trustee under the Indenture, which is funded ratably from collections
  of the ITC over the term of each series of transition bonds.
PPL Electric Utilities
- PPL Electric Utilities Corporation,
  the sole member of PPL Transition Bond Company, LLC.
PUC
- Pennsylvania Public Utility Commission.
PUC Restructuring Order
-
The final order
  issued by the PUC to PPL Electric Utilities in August 1998, in connection with
  PPL Electric Utilities' restructuring filing under the Competition Act, as supplemented
  by a May 1999 PUC order.
Qualified
Transition
Expenses
- The transition
  or stranded costs of an electric utility approved by the PUC for recovery through
  the issuance of transition bonds under the Customer Choice Act; the costs of
  retiring existing debt or equity capital of the electric utility or its holding
  company parent, including accrued interest and acquisition or redemption premium,
  costs of defeasance, and other related fees, costs and charges, through the
  issuance of transition bonds or the assignment, sale or other transfer of ITP;
  and the costs incurred to issue, service or refinance the transition bonds,
  including accrued interest and acquisition or redemption premium, and other
  related fees, costs and charges associated with the transition bonds, or to
  assign, sell or otherwise transfer ITP.
Reserve
Subaccount
- An account held by the Trustee
  under the Indenture, which consists of remaining funds available after required
  allocations on the quarterly payment dates for the transition bonds.
SEC
- Securities and Exchange Commission.
Servicer
- PPL Electric Utilities acting in this capacity
  under the Servicing Agreement. In this capacity, PPL Electric Utilities calculates,
  bills and collects the ITC, and maintains applicable accounting records, among
  other duties.
Servicing
Agreement
- The Intangible Property
  Servicing Agreement between PPL Electric Utilities, as Servicer, and PPL Transition
  Bond Company, LLC, as Issuer.
Trustee
-
The Bank of New York, a New York banking
  corporation, as Trustee under the Indenture.
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.
PPL Transition Bond Company, LLC
(Registrant)
Date: May 8, 2002
/s/ James S. Pennington
James S. Pennington, Manager
/s/ Stephen C. May
Stephen C. May, Treasurer