00RS HB897


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HB 897 (BR 932) - M. Weaver, L. Clark

     AN ACT relating to utilities and affiliates of utilities.
     Create new sections of KRS Chapter 278 and amend KRS 278.010 to prohibit regulated utilities from using revenues to fund unregulated affiliates or from including expenses of unregulated affiliates in the rate base; to require separate recordkeeping; to require the Public Service Commission to establish uniform procedures for cost allocation between the regulated utility and unregulated affiliates by December 31, 2000, and to require utilities to prepare cost allocation manuals in conformance with these procedures; and to create a code of conduct for utilities with nonregulated activities or affiliates.


     HCS - Amend 278.010 to add definitions for affiliate, control, CAM, non-regulated activity, non-regulated, regulated activity, USoA, arm's length, subsidize, solicit, USDA, FERC, and SEC; create new sections of KRS 278 to prohibit utilities from subsidizing a non-regulated activity, require the commission to order utilities to keep separate books and records, and allow the commission to promulgate administrative regulation; require utilities to identify costs of a non-regulated activity and to report those costs in accordance with certain cost allocation methods; allows the utility to use the fully distributed cost method or a cost allocation method recognized or mandated by the SEC, FERC or the USDA; allow a utility to report 2% or 1 million dollars of an incidental activity; permits a utility to use a different cost allocation methodology if stipulated in an existing contract; requires a utility to file a CAM for the non-regulated activity if the revenue from the activity exceeds 2% or 1 million dollars; establishes the contents of the CAM and establishes filing requirements for the CAM; requires asymmetric pricing of transactions between a utility and its affiliate; permits the utility to obtain a deviation from the transaction pricing requirements; requires that the commission ensures fair, just and reasonable rates for utility service; requires a utility, in a formal proceeding to provide sufficient information to the commission to document compliance with cost allocation and affiliate transaction pricing; provides the commission access to the books and records of the utility and its non-regulated affiliate and permits the commission to disallow from rates any costs attached to the utility's transactions with a non-regulated affiliate if the commission finds the utility in noncompliance; permits the commission to order a financial audit of the utility's affiliate; establishes a code of conduct; exempts telecommunications utilities and services, and non-profit water or sewer districts from Section 2 to 10 of this Act; exempts cooperates from Section 8 of the Act.
     SCA (1, E. Harris) - Make technical correction.
     SCA (2, E. Harris) - Delete the exclusion of telecommunications utilities and telecommunications services from Sections 2 to 10 of the Act.
     SFA (3, E. Harris) - Retain original provisions of HB 897/GA; insert new Section 11 that creates a series of findings of the General Assembly regarding the provision of unregulated telecommunications services by regulated telecommunications utilities; insert new Section 12 that directs the Special Subcommittee on Energy to study whether additional statutory authority is required to prevent cross-subsidization of nonregulated telecommunications services, with particular emphasis on internet, by regulated telecommunications utilities; require the Special Subcommittee on Energy to identify existing federal and state, laws, rules and regulations governing cost allocation, affiliate transaction rules and a code of conduct between regulated telecommunications utilities and their nonregulated programs or affiliates; require the Special Subcommittee on Energy to include in their deliberations the cost of enforcing and the additional statutory authority required to allow the Public Service Commission to prevent cross-subsidization while maintaining a level playing field between all providers of unregulated telecommunications services; insert new Section 13 to require the Special Subcommittee on Energy to submit a final report to the Legislative Research Commission no later than November 15, 2001; insert new Section 14 to permit the Legislative Research Commission to alternatively assign the issues identified in Sections 11 to 13 of the bill to an interim joint committee or subcommittee and to designate a study completion date.

     Feb 28-introduced in House
     Feb 29-to Tourism Development and Energy (H)
     Mar 6-posted in committee
     Mar 14-reported favorably, 1st reading, to Calendar with Committee Substitute
     Mar 15-2nd reading, to Rules; to House Floor; posted for passage in the Regular Orders of the Day for Thursday, March 16, 2000
     Mar 16-3rd reading, passed 91-0 with Committee Substitute
     Mar 17-received in Senate
     Mar 21-to Agriculture and Natural Resources (S)
     Mar 23-reported favorably, 1st reading, to Calendar with committee amendments (1) and (2)
     Mar 24-2nd reading, to Rules
     Mar 27-posted for passage in the Regular Orders of the Day for Monday, March 27, 2000; passed over and retained in the Orders of the Day; floor amendment (3) filed
     Mar 28-3rd reading; committee amendment (2) withdrawn ; passed 35-0 with committee amendment (1), floor amendment (3) ; received in House; posted for passage for concurrence in Senate committee amendment (1), floor amendment (3)
     Mar 29-House concurred in Senate committee amendment (1), floor amendment (3) ; passed 93-1; enrolled, signed by Speaker of the House
     Apr 11-enrolled, signed by President of the Senate; delivered to Governor
     Apr 21-signed by Governor (Acts ch. 511)

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