SB 389 (BR 2538) - V. McGaha, C. Borders
AN ACT relating to the nonregulated activities of regulated utilities and their affiliates.
Create new sections of KRS Chapter 278 to state that the General Assembly finds that guidelines are needed to prevent cross-subsidization between an affiliate by a regulated utility; add new definitions to KRS Chapter 278; prescribe cost allocation methods; allow a utility to report an incidental nonregulated activity as a regulated activity if the revenue from the activity is less than 2% of the utility's total revenue or one million dollars; require a utility to develop a cost allocation manual if the revenue from nonregulated activities of an affiliate exceeds 2% of the utility's total revenue or one million dollars; prescribe the development and contents of and the reasons for amending a cost allocation manual; require that the cost allocation manual be available for inspection by the commission but require that proprietary information remain confidential; require costing methods for transactions between a utility and its affiliate for both regulated and nonregulated services and products; permit a utility to apply to the Public Service Commission for a deviation from the costing methodologies; require utilities to furnish information to document cost allocation and affiliate transaction pricing; establish conditions when and provide authority for the commission to have access to books and record of the affiliate to the extent necessary to ensure transactions comply with statutory requirements; permit the commission to establish conditions when financial audits may be performed; disallow from rates any costs which are not in compliance with prescribed cost allocation methods or have provided insufficient information in a formal hearing; establish a code of conduct between utilities and their unregulated affiliates; exempt from the new provisions telecommunications providers and telecommunications utilities; allow utilities to apply for a waiver or deviation from the new statutory conditions; set the conditions when the commission is required to approve the waiver.
Mar 3-introduced in Senate
Mar 6-to Economic Development, Tourism & Labor (S)