KRS § 278.672 — KY Code / Title XXIV / Chapter 278 / Section 278.672
278.672 Application for financing order for deferred costs -- Requirements -- Deadline
Status: in_force

278.672 Application for financing order for deferred costs -- Requirements --

Deadline.

(1) An electric utility may apply to the commission for a financing order to finance

extraordinary or other deferred costs from previous events for regulatory assets

existing and with a value calculated on June 30, 2023, as:

(a) Greater than two hundred million dollars ($200,000,000) for a single

regulatory asset; or

(b) Having a cumulative total value of greater than two hundred and seventy-five

million ($275,000,000) for multiple regulatory assets.

(2) An application for a financing order shall include:

(a) A description of the deferred costs the utility is seeking to securitize. If more

than fifty percent (50%) of the deferred costs are retired generation costs, the

application also shall describe:

1. The electric generating facility or facilities that have been retired; and

2. A copy of all previous commission orders related to the deferral of costs

applicable to the retirement or abandonment of the facility or facilities;

(b) The dollar amount of the deferred costs;

(c) A statement of whether the electric utility proposes to finance all or a portion

of deferred costs using securitized bonds. If the electric utility proposes to

finance a portion of the costs, the electric utility shall identify the specific

portion of the deferred costs in the application. By electing not to finance all

or any portion of deferred costs using securitized bonds, an electric utility

shall not be deemed to waive its right to reflect those costs in its retail rates

pursuant to a separate proceeding with the commission. However, at no point

shall the electric utility apply to securitize less than the amounts prescribed in

subsection (1) of this section;

(d) An estimate of the financing costs related to the securitized bonds;

(e) An estimate of the securitized surcharges necessary to recover the securitized

costs and financing costs and the period for recovery of the costs;

(f) A comparison between the net present value of the costs to ratepayers that are

estimated to result from the issuance of securitized bonds and the cost that

would result from an alternative means of providing for the full recovery of

and return on those securitized costs from customers, using the utility's

current or expected weighted average cost of capital. The comparison should

demonstrate that the issuance of securitized bonds and the imposition of

securitized surcharges are expected to provide quantifiable net present value

benefits to customers;

(g) A proposed future ratemaking process to reconcile any differences between

securitized costs financed by securitized bonds and the final securitized costs

incurred by the electric utility, successor, or assignee, provided that any

reconciliation shall not affect the amount of securitized bonds or the

associated securitized surcharges paid by customers; and

(h) Testimony supporting the application.

(3) The commission shall not accept for filing an application tendered pursuant to this

section after December 31, 2024.