Quarterly Report

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

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	Registrant; State of Incorporation;	IRS Employer
Number	Address; and Telephone No.	dentification No.
333-75369	PPL Transition Bond Company, LLC	23-3004428
	(Delaware)
	Two North Ninth Street, GENA92, Room 3
	Allentown, PA 18101-1179
	(610) 774-7934

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 SEPTEMBER 30, 2001

Table of Contents

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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.

1. 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, 2000.

2. Nature of Operations

   The condensed financial statements include the accounts of PPL Transition Bond Company, LLC (the Company). 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 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.

3. 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.

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   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.

4. 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 other assets of the Company.

   Scheduled maturities and interest rates for the Bonds at September 30, 2001 are:

   				Expected Final	Final
   Class	Bond Rate		Amount	Payment Date	Maturity Date
   			($ Thousands)
   A-1	6.08%	$	0	March 25, 2001	March 25, 2003
   A-2	6.41%		29,831	December 26, 2001	December 26, 2003
   A-3	6.60%		303,000	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
   		$	1,978,831
   Current Maturities			(244,297)
   Unamort. Discount			(129)
   Long-term Debt		$	1,734,405

   The carrying value of the long-term debt approximates fair market value as of September 30, 2001. 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 2000 through August 2001 were $307 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 scheduled payments on March 26, June 25, and September 25, 2001. 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 following amounts were deposited to the Reserve Subaccount on the dates noted above: $9.3 million, $893,000 and $3 million. 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, the following deposits were made on the same dates noted above: $327,000, $327,000 and $276,000. 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 September 30, 2001, the following balances were reflected in the Subaccounts maintained by the Trustee:

   	Subaccounts	Balance
   		($ Thousands)
   	General	$             -
   	Reserve	14,726
   	Overcollateralization	2,635
   	Capital	12,338
   	Total	$     29,699

5. 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. For the three months ended September 30, 2001, the Company expensed servicing fees of approximately $313,000 and other administrative fees of $25,000. For the nine months ended September 30, 2001, the company expensed servicing fees of approximately $937,000 and other administrative fees of $75,000.

   At September 30, 2001, the Balance Sheet includes a receivable from PPL Electric Utilities of approximately $72 million for billed and unbilled ITC revenues.

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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 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 Instruction H 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, 2000.

Results of Operations

Revenues

Revenue generated from the ITP for the quarters ended September 30, 2001 and 2000 were approximately $97 million and $95 million. Revenues generated from the ITP for the nine months ended September 30, 2001 and 2000 were approximately $295 million and $301 million.

During the quarters ended September 30, 2001 and 2000, the Company also earned approximately $115,000 and $55,000 in interest from the Capital Subaccount maintained by the Trustee and from temporary investments. During the nine months ended September 30, 2001 and 2000, the Company earned approximately $443,000 and $136,000 in such interest. The additional interest income in 2001 reflects higher balances in the Capital Subaccount and temporary investments in 2001 compared with 2000.

Expenses

During the three months ended September 30, 2001 and 2000, the Company incurred interest expense of approximately $36 million and $40 million. During the nine months ended September 30, 2001 and 2000, the Company incurred interest expense of approximately $110 million and $121 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.

For the three months ended September 30, 2001 and 2000, the Company also incurred administrative and general expenses of approximately $424,000 and $518,000, including servicing fees of approximately $313,000 and other administrative fees of $25,000 in each period. For the nine months ended September 30, 2001 and 2000, the Company incurred administrative and general fees of approximately $1.3 million and $1.4 million, including servicing fees of approximately $937,000 and administrative fees of $75,000, in each period.

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ITC Remittances and Debt Servicing

The principal amount of the Bonds, interest, fees, and funding of the Overcollateralization Subaccount are being recovered through 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 $307 million of ITC collections for the billing periods of December 2000 to August 2001.

All scheduled quarterly Bond principal payments, interest payments and all related expenses were made on March 26, June 25, and September 25, 2001. On March 26, 2001, scheduled principal payments of $37 million of the class A-1 Bonds were made and this series was retired. An additional $29 million in principal payments were made on the class A-2 bonds. On June 25 and September 25, 2001 the scheduled principal payments of $63 million and $56 million were made on the class A-2 Bonds. The Overcollateralization Subaccount was funded by $327,000 on both March 26 and June 25, 2001 and $276,000 on September 25, 2001, to reach its required funding levels. Excess ITC collections and investment earnings not released to the Company, totaling approximately $13.2 million, were deposited into the Reserve Subaccount on March 26, June 25, and September 25, 2001.

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 on December 15, 2000 with the PUC. The request was approved and revised rates became effective on January 1, 2001.

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

1. Exhibits

   99 - Quarterly Servicer's Certificate

2. Reports on Form 8-K

   None.

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GLOSSARY OF TERMS AND ABBREVIATIONS

Capital Subaccount – An account held by the Trustee under the Indenture which is 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 is an indirect wholly-owned subsidiary of PPL Energy Funding Corp.

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 by the Servicer are deposited. The Trustee allocates the funds from the General Subaccount to other subaccounts on the quarterly payment dates.

Indenture – The Indenture entered into by PPL Transition Bond Company, LLC and the Trustee, providing for the issuance of 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 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 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 – The 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; 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.

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 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.

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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.

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Exhibit 99

Quarterly Servicer's Certificate

PPL Transition Bond Company LLC
$2,420,000,000 Transition Bonds, Series 1999-1

Pursuant to Section 4 of Annex 1 the Intangible Transition Property Servicing Agreement dated as of August 10, 1999 (the "Servicing Agreement") between PPL Electric Utilities Corporation, as Servicer and PPL Transition Bond Company, LLC, as Issuer, the Servicer does hereby certify as follows:

Capitalized terms used in the Quarterly Servicer's Certificate (the "Quarterly Certificate") have their respective meanings as set forth in the Servicing Agreement. References herein to the "Indenture" are to the Indenture dated as of August 10, 1999 between PPL Transition Bond Company, LLC, as issuer and The Bank of New York as Trustee.

Billing Periods: June 2001, July 2001, August 2001
Payment Date: September 25, 2001