2011 Kentucky Revised Statutes CHAPTER 278 PUBLIC SERVICE COMMISSION 278.020 Certificate of convenience and necessity required for construction provision of utility service or of utility -- Exceptions -- Approval required for acquisition or transfer of ownership -- Public hearing on proposed transmission line -- Severability of provisions.
KY Rev Stat § 278.020 (1996 through Reg Sess) What's This?
278.020 Certificate of convenience and necessity required for construction
provision of utility service or of utility -- Exceptions -- Approval required for
acquisition or transfer of ownership -- Public hearing on proposed
transmission line -- Severability of provisions.
(1)
(2)
No person, partnership, public or private corporation, or combination thereof shall
commence providing utility service to or for the public or begin the construction of
any plant, equipment, property, or facility for furnishing to the public any of the
services enumerated in KRS 278.010, except retail electric suppliers for service
connections to electric-consuming facilities located within its certified territory and
ordinary extensions of existing systems in the usual course of business, until that
person has obtained from the Public Service Commission a certificate that public
convenience and necessity require the service or construction. Upon the filing of an
application for a certificate, and after any public hearing which the commission may
in its discretion conduct for all interested parties, the commission may issue or
refuse to issue the certificate, or issue it in part and refuse it in part, except that the
commission shall not refuse or modify an application submitted under KRS 278.023
without consent by the parties to the agreement. The commission, when considering
an application for a certificate to construct a base load electric generating facility,
may consider the policy of the General Assembly to foster and encourage use of
Kentucky coal by electric utilities serving the Commonwealth. The commission,
when considering an application for a certificate to construct an electric
transmission line, may consider the interstate benefits expected to be achieved by
the proposed construction or modification of electric transmission facilities in the
Commonwealth. Unless exercised within one (1) year from the grant thereof,
exclusive of any delay due to the order of any court or failure to obtain any
necessary grant or consent, the authority conferred by the issuance of the certificate
of convenience and necessity shall be void, but the beginning of any new
construction or facility in good faith within the time prescribed by the commission
and the prosecution thereof with reasonable diligence shall constitute an exercise of
authority under the certificate.
For the purposes of this section, construction of any electric transmission line of one
hundred thirty-eight (138) kilovolts or more and of more than five thousand two
hundred eighty (5,280) feet in length shall not be considered an ordinary extension
of an existing system in the usual course of business and shall require a certificate
of public convenience and necessity. However, ordinary extensions of existing
systems in the usual course of business not requiring such a certificate shall include:
(a) The replacement or upgrading of any existing electric transmission line; or
(b) The relocation of any existing electric transmission line to accommodate
construction or expansion of a roadway or other transportation infrastructure;
or
(c) An electric transmission line that is constructed solely to serve a single
customer and that will pass over no property other than that owned by the
customer to be served.
(3)
(4)
(5)
(6)
(7)
No utility shall exercise any right or privilege under any franchise or permit, after
the exercise of that right or privilege has been voluntarily suspended or
discontinued for more than one (1) year, without first obtaining from the
commission, in the manner provided in subsection (1) of this section, a certificate of
convenience and necessity authorizing the exercise of that right or privilege.
No utility shall apply for or obtain any franchise, license, or permit from any city or
other governmental agency until it has obtained from the commission, in the manner
provided in subsection (1) of this section, a certificate of convenience and necessity
showing that there is a demand and need for the service sought to be rendered.
No person shall acquire or transfer ownership of, or control, or the right to control,
any utility under the jurisdiction of the commission by sale of assets, transfer of
stock, or otherwise, or abandon the same, without prior approval by the
commission. The commission shall grant its approval if the person acquiring the
utility has the financial, technical, and managerial abilities to provide reasonable
service.
No individual, group, syndicate, general or limited partnership, association,
corporation, joint stock company, trust, or other entity (an "acquirer"), whether or
not organized under the laws of this state, shall acquire control, either directly or
indirectly, of any utility furnishing utility service in this state, without having first
obtained the approval of the commission. Any acquisition of control without prior
authorization shall be void and of no effect. As used in this subsection, the term
"control" means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a utility, whether through the
ownership of voting securities, by effecting a change in the composition of the
board of directors, by contract or otherwise. Control shall be presumed to exist if
any individual or entity, directly or indirectly, owns ten percent (10%) or more of
the voting securities of the utility. This presumption may be rebutted by a showing
that ownership does not in fact confer control. Application for any approval or
authorization shall be made to the commission in writing, verified by oath or
affirmation, and be in a form and contain the information as the commission
requires. The commission shall approve any proposed acquisition when it finds that
the same is to be made in accordance with law, for a proper purpose and is
consistent with the public interest. The commission may make investigation and
hold hearings in the matter as it deems necessary, and thereafter may grant any
application under this subsection in whole or in part and with modification and
upon terms and conditions as it deems necessary or appropriate. The commission
shall grant, modify, refuse, or prescribe appropriate terms and conditions with
respect to every such application within sixty (60) days after the filing of the
application therefor, unless it is necessary, for good cause shown, to continue the
application for up to sixty (60) additional days. The order continuing the application
shall state fully the facts that make continuance necessary. In the absence of that
action within that period of time, any proposed acquisition shall be deemed to be
approved.
Subsection (6) of this section shall not apply to any acquisition of control of any:
(a)
(8)
(9)
Utility which derives a greater percentage of its gross revenue from business
in another jurisdiction than from business in this state if the commission
determines that the other jurisdiction has statutes or rules which are applicable
and are being applied and which afford protection to ratepayers in this state
substantially equal to that afforded such ratepayers by subsection (6) of this
section;
(b) Utility by an acquirer who directly, or indirectly through one (1) or more
intermediaries, controls, or is controlled by, or is under common control with,
the utility, including any entity created at the direction of such utility for
purposes of corporate reorganization; or
(c) Utility pursuant to the terms of any indebtedness of the utility, provided the
issuance of indebtedness was approved by the commission.
In a proceeding on an application filed pursuant to this section, any interested
person, including a person over whose property the proposed transmission line will
cross, may request intervention, and the commission shall, if requested, conduct a
public hearing in the county in which the transmission line is proposed to be
constructed, or, if the transmission line is proposed to be constructed in more than
one county, in one of those counties. The commission shall issue its decision no
later than ninety (90) days after the application is filed, unless the commission
extends this period, for good cause, to one hundred twenty (120) days. The
commission may utilize the provisions of KRS 278.255(3) if, in the exercise of its
discretion, it deems it necessary to hire a competent, qualified and independent firm
to assist it in reaching its decision. The issuance by the commission of a certificate
that public convenience and necessity require the construction of an electric
transmission line shall be deemed to be a determination by the commission that, as
of the date of issuance, the construction of the line is a prudent investment.
If any provision of this section or the application thereof to any person or
circumstance is held invalid, the invalidity shall not affect other provisions or
applications of this section which can be given effect without the invalid provision
or application, and to that end the provisions are declared to be severable.
Effective: July 12, 2006
History: Amended 2006 Ky. Acts ch. 137, sec. 1, effective July 12, 2006. -- Amended
2004 Ky. Acts ch. 75, sec. 1, effective July 13, 2004. -- Amended 2001 Ky. Acts
ch. 35, sec. 1, effective June 21, 2001. -- Amended 1998 Ky. Acts ch. 388, sec. 1,
effective July 15, 1998. -- Amended 1994 Ky. Acts ch. 144, sec. 1, effective July 15,
1994. – Amended 1992 Ky. Acts ch. 102, sec. 2, effective July 14, 1992. -- Amended
1988 Ky. Acts ch. 12, sec. 3, effective July 15, 1988; ch. 22, sec. 5, effective July 15,
1988; ch. 335, sec. 1, effective July 15, 1988. -- Amended 1986 Ky. Acts ch. 368,
sec. 1, effective July 15, 1986. -- Amended 1982 Ky. Acts ch. 82, sec. 5, effective
July 15, 1982; ch. 130, sec. 1, effective July 15, 1982. -- Amended 1978 Ky. Acts
ch. 379, sec. 6, effective April 1, 1979. -- Amended 1974 Ky. Acts ch. 388, sec. 3. -Amended 1972 Ky. Acts ch. 83, sec. 5. -- Recodified 1942 Ky. Acts ch. 208, sec. 1,
effective October 1, 1942, from Ky. Stat. sec. 3952-25.
2010-2012 Budget Reference. See State/Executive Branch Budget, 2010 (1st Extra.
Sess.) StateKy. Acts ch. 1, Pt. I, E, 7, (5) at 31.
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