2014 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.
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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)
(3)
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.
No utility shall exercise any right or privilege under any franchise or permit,
(4)
(5)
(6)
(7)
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.
2014-2016 Budget Reference. See State/Executive Branch Budget, 2014 Ky. Acts
ch. 117, Pt. I, E, 6, (3) at 638.
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