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278.255 Periodic management and operation audits.
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The commission shall provide for periodic management and operation audits of
each utility with annual intra-Kentucky assessable revenue as of December 31,
1983, under KRS 278.150(1) not less than one hundred million dollars
($100,000,000) to investigate management effectiveness and operating
efficiency. The commission shall complete or provide for a full and
comprehensive audit of each such utility prior to January 1, 1990. After the
initial audit of any utility, the commission may order a subsequent audit of that
utility focusing on issues disclosed by the initial audit. A full and comprehensive
audit of any utility initiated prior to July 13, 1984, may be deemed to satisfy the
requirements of this subsection if the audit was required and directed by the
commission and completed after July 1, 1983.
The commission may provide for management or operations audits, or both, of
any utility under its jurisdiction on a regular or irregular schedule to investigate
all or any portion of the management and operating procedures or any other
internal workings of the utility.
Audits provided under this section may, at the discretion of the commission, be
performed by the commission staff or by a competent, qualified and
independent firm. When the commission orders an audit to be performed by an
independent firm, the commission shall select the audit firm, which shall work
for and under the direction of the commission, with the cost to be borne by the
utility. The commission shall include the cost of conducting any audits required
in this section in the cost of service of the utility for ratemaking purposes.
The commission shall adopt rules and regulations setting forth the scope and
application of audits, and procedures for the conduct of management and
operations audits. The audit procedures shall provide the utility being audited
the opportunity to comment at various stages of the audit, including an
opportunity to comment on the initial work plan and the opportunity to review
and comment on preliminary audit drafts prior to issuance of a final document.
The results of all audits shall be filed with the commission and shall be open to
public inspection.
Effective:July 13, 1984
History: Created 1984 Ky. Acts ch. 46, sec. 1, effective July 13, 1984.
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