2014 Kentucky Revised Statutes CHAPTER 278 - PUBLIC SERVICE COMMISSION 278.274 Review of natural gas utility's purchasing practices in determining reasonableness of proposed rates -- Reduction of rates by commission.
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278.274 Review of natural gas utility's purchasing practices in determining
reasonableness of proposed rates -- Reduction of rates by commission.
(1)
(2)
(3)
In determining whether proposed natural gas utility rates are just and
reasonable, the commission shall review the utility's gas purchasing practices.
The commission may disallow any costs or rates which are deemed to result
from imprudent purchasing practices on the part of the utility.
When proposing new rates, the utility shall be required to prove that the
proposal is just and reasonable in accordance with the requirements of this
section.
It shall be presumed that natural gas purchases from affiliated companies are
not conducted at arm's length.
(a) For purposes of this subsection, affiliated companies shall be defined as
those in which one (1) or more of the owners control or have the right to
control the business affairs of all affected companies.
(b) In instances in which a utility purchases natural gas from an intrastate
affiliate, the commission shall assume jurisdiction of the affiliated
company as though it were a utility as defined in KRS 278.010. The
commission's jurisdiction shall extend to that extent necessary to ensure
that the rates charged the utility and ultimately to the consumer are just
and reasonable.
(c) If the commission determines that the rates charged by the utility are not
just and reasonable in that the cost of natural gas purchased from the
affiliated company is unjust or unreasonable, the commission may reduce
the purchased gas component of the utility's rates by the amount deemed
to be unjust or unreasonable.
(d) The commission may also reduce the rate charged by the affiliated
company by the same amount.
Effective:July 13, 1984
History: Created 1984 Ky. Acts ch. 40, sec. 1, effective July 13, 1984.
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