Kentucky SB 245: AN ACT relating to affordable and reliable energy for Kentucky.

Bill Text

UNOFFICIAL COPY  23 RS BR 1611 
Page 1 of 62 
XXXX   2/21/2023 8:37 AM  Jacketed 
AN ACT relating to affordable and reliable energy for Kentucky. 1 
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2 
SECTION 1.      A  NEW  SECTION  OF  KRS  CHAPTER  278  IS  CREATED  TO 3 
READ AS FOLLOWS: 4 
In addition to the definitions in KRS 278.010, which apply unless they conflict with this 5 
section or if the context otherwise requires, as used in Sections 1 to 18 of this Act: 6 
(1) "Ancillary  agreement"  means  a  bond,  insurance  policy,  letter  of  credit,  reserve 7 
account,   surety   bond,   interest   rate   lock   or   swap   arrangement,   hedging 8 
arrangement,   liquidity   or   credit   support   arrangement,   or   other   similar 9 
arrangement  entered  into in  connection  with  the  issuance  of  securitized  bonds 10 
that  is  designed  to  promote  credit  quality  and  marketability  of  the  securitized 11 
bonds or to mitigate the risk of an increase in interest rates; 12 
(2) "Assignee" means a legally recognized entity to which an electric utility assigns, 13 
sells, or transfers, other than as security, all or a portion of its interest in or right 14 
to  securitized  property.  The  term  "assignee"  includes  a  corporation,  limited 15 
liability   company,   general   or   limited   partnership,   public   authority,   trust, 16 
financing  entity,  or  other  entity  to  which  an  assignee  assigns,  sells  or  transfers, 17 
other than as security, its interest in or right to securitized property; 18 
(3) "Bondholder" means a person who holds a securitized bond; 19 
(4) "Code" means the Uniform Commercial Code, KRS Chapter 355; 20 
(5) "Commonwealth" means the Commonwealth of Kentucky; 21 
(6) "Deferred expenses" means costs that have occurred but will be accounted for as 22 
part of a regulatory asset; 23 
(7) "Extraordinary  storm  costs"  means  any  costs  incurred  by  an  electric  utility 24 
arising  from  or  related  to  any  storm,  weather-related  event,  or  natural  disaster, 25 
including   but   not   limited   to   costs   of   mobilization,   staging,   construction, 26 
reconstruction,   replacement   or   repair   of   production,   generation,   transport, 27 

UNOFFICIAL COPY  23 RS BR 1611 
Page 2 of 62 
XXXX   2/21/2023 8:37 AM  Jacketed 
transmission,  distribution,  or  general  plant  facilities  and  increased  fuel,  energy 1 
commodity, hedging, trading, and other professional costs; 2 
(8) "Financing   costs"   means   costs   to   issue,   service,   repay,   or   refinance   the 3 
securitized  bonds,  whether  incurred  or  paid  upon  issuance  of  the  securitized 4 
bonds or over the life of the securitized bonds, and includes the following: 5 
(a) Interest  and  acquisition,  defeasance,  or  redemption  premiums  payable  on 6 
securitized bonds; 7 
(b) Any  payment  required  under  an  ancillary  agreement  and  any  amount 8 
required   to   fund   or   replenish   a   reserve   account   or   other   accounts 9 
established under the terms of any indenture, ancillary agreement, or other 10 
financing documents pertaining to securitized bonds; 11 
(c) Any  other  cost  related  to  issuing,  supporting,  repaying,  refunding,  and 12 
servicing  securitized  bonds,  including  but  not  limited  to  the  following  fees 13 
and costs: 14 
1. Servicing  fees,  accounting  and  auditing  fees,  trustee  fees,  consulting 15 
fees,  structuring  adviser  fees,  financial  advisor  fees,  administrative 16 
fees,   placement   and   underwriting   fees,   independent   director   and 17 
manager   fees,   rating   agency   fees,   stock   exchange   listing   and 18 
compliance fees, security registration fees, and filing fees; 19 
2. Capitalized  interest  and  information  technology  programming  costs; 20 
and 21 
3. Any  other  costs  necessary  to  otherwise  ensure  the  timely  payment  of 22 
securitized  bonds  or  other  amounts  or  charges  payable  in  connection 23 
with  the  bonds,  including  costs  related  to  obtaining  the  financing 24 
order;  25 
(d) Any taxes and license fees or other fees imposed on the revenues generated 26 
from the collection of the securitized surcharge or otherwise resulting from 27 

UNOFFICIAL COPY  23 RS BR 1611 
Page 3 of 62 
XXXX   2/21/2023 8:37 AM  Jacketed 
the collection of securitized surcharges, whether paid, payable, or accrued; 1 
(e) Any state or local taxes, franchise, gross receipts, and other taxes or similar 2 
charges,  including  commission  assessment  fees,  whether  paid,  payable,  or 3 
accrued; and 4 
(f) Any  costs  associated  with  performance  of  the  commission's  responsibilities 5 
under Sections 1 to 18 of this Act in connection with: 6 
1. Approving, approving subject to conditions, or rejecting an application 7 
for a financing order;  8 
2. Performing duties under the issuance advice letter process; and 9 
3. Retaining  counsel,