Current through Register Vol. 50, No. 9, March 1, 2024
RELATES TO:
KRS
278.010,
278.2201,
278.2203,
278.2205,
278.2207,
278.2213,
278.2215,
278.2219,
278.230,
278.260
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
278.040(3) authorizes the
commission to promulgate reasonable administrative regulations to implement the
provisions of KRS Chapter 278.
KRS
278.280(1) authorizes the
commission to establish proper practices to be observed in regard to a
utility's practices and services.
KRS
278.2201 prohibits a utility governed by
KRS
278.2201 through
278.2219
from subsidizing nonregulated activities performed by the utility or an
affiliate and authorizes the commission to promulgate administrative
regulations to implement this section.
KRS
278.2205(3) requires a
utility governed by
KRS
278.2201 through
278.2219
to file with the commission a statement that its cost allocation manual has
been prepared and adopted, together with the manual.
KRS
278.2205(4) requires a
utility governed by
KRS
278.2201 through
278.2219
to amend its cost allocation manual to reflect any material changes.
KRS
278.230 requires a utility to file with the
commission any reports, schedules, classifications or other information that
the commission reasonably requires.
KRS
278.2207 prescribes requirements for
transactions between a utility governed by
KRS
278.2201 through
278.2219
and its affiliate, and provides for deviations from those requirements.
KRS
278.2213(13) requires the
commission to establish specifications for a disclaimer to be used by an
affiliate using the name, trademark, brand or logo of a utility governed by
KRS
278.2201 through
278.2219
and requires commission approval prior to the use of any disclaimer.
KRS
278.2213(15) requires a
utility governed by
KRS
278.2201 through
278.2219
to inform the commission of any new nonregulated activity within the time
specified by the commission.
KRS
278.2213(17) authorizes the
commission to require a utility to file annual reports relating to its
transactions with affiliates.
KRS
278.2219 authorizes the commission to grant a
deviation from a provision of
KRS
278.2201 through
278.2213.
This administrative regulation prescribes procedures, filing requirements, and
safeguards relating to nonregulated activities of a utility or a utility
affiliate.
Section 1. Definitions. For
purposes of this administrative regulation:
(1) "Affected utility" means a utility not
exempted by
KRS 278.2215, or other
law, from a requirement of
KRS
278.2201 through
278.2219.
(2) "Service agreement" means an agreement
between an affected utility and an affiliate or subsidiary that delineates the
activities, duties, pricing and accounting for transactions between the
parties.
Section 2.
Annual Reports Relating to a Nonregulated Activity of an Affected Utility or
Its Affiliate.
(1) An affected utility shall
file with the commission, by March 31 of each calendar year, a report
containing the following information:
(a) A
description of each change in the affected utility's cost allocation manual
during the preceding calendar year that has not been previously
reported;
(b) A report on the
utility's incidental nonregulated activity that describes the activity and
provides justification for reporting the nonregulated activity as an incidental
nonregulated activity, including:
1. Revenue
per year or percentage of total revenue per year of the activity reported as an
incidental nonregulated activity;
2. A calculation demonstrating the manner in
which the affected utility has determined the percentage of revenue set forth
in subparagraph 1 of this paragraph;
3. A full explanation as to why the activity
reported as an incidental nonregulated activity is reasonably related to the
affected utility's regulated services; and
(c) A list of nonregulated affiliates and a
brief description of the activities in which each affiliate is involved, except
that an affected utility may meet the requirements of this paragraph for a
nonregulated affiliate that has not, within the reporting period, offered or
sold goods and services in the Commonwealth of Kentucky or entered into a
transaction with an affected utility by stating the name of the nonregulated
affiliate and the nature of its business.
(2) A copy of each service agreement existing
on the effective date of
KRS
278.2201 through
278.2219
and remaining in effect shall be filed as an attachment to the annual report
required by this subsection. After the initial filing, an affected utility
shall file only new or amended service agreements with the annual
report.
Section 3.
Filing of the Cost Allocation Manual and Amendments.
(1) An affected utility shall file a copy of
a new cost allocation manual or a new amendment to its cost allocation manual
within:
(a) Sixty (60) days of a material
change in matters required to be included in the cost allocation manual;
or
(b) Ninety (90) days of engaging
in a new nonregulated activity that is not classified as an incidental
nonregulated activity pursuant to
KRS
278.2203(4).
(2) If an affected utility files a
new cost allocation manual or an amendment to a cost allocation manual, it
shall include with its filing a cover letter containing a brief description of
the activity or material change in circumstance that necessitates the filing of
the cost allocation manual or amendment.
(3) An affected utility filing under this
section shall include in its filing all documents and information required by
807 KAR 5:001,
Section 14, except that only one (1) copy of the cost allocation manual shall
be filed.
Section 4.
Notice of Establishment of New Nonregulated Activity.
(1) Within ten (10) days of establishing a
new nonregulated activity, an affected utility shall file with the commission a
written notice that:
(a) Briefly describes the
new nonregulated activity; and
(b)
States whether the new nonregulated activity is proposed to be classified as an
incidental nonregulated activity.
(2) If a new nonregulated activity is
proposed to be classified as an incidental nonregulated activity, an affected
utility shall include in the notice required by subsection (1) of this section
the information required by Section 2 (1)(b) of this administrative
regulation.
Section 5.
Petition for Deviation.
(1) To request a
deviation pursuant to
KRS
278.2219, an affected utility shall file with
the commission the following documents and information:
(a) All documents and information required by
807 KAR 5:001,
Section 14;
(b) An original and
five (5) copies of the petition;
(c) All documents and information required by
KRS
278.2219;
(d) A full description of the reasons that
compliance with the requirements from which deviation is sought is impractical
or unreasonable.
(2) To
request a deviation from
KRS
278.2207, an affected utility shall file with
the commission the following documents and information:
(a) All documents and information required by
807 KAR 5:001,
Section 14;
(b) An original and
five (5) copies of the petition;
(c) All documents and information required by
KRS
278.2219;
(d) The proposed price of services or
products proposed by the affected utility or nonregulated affiliate;
(e) A detailed calculation demonstrating the
manner in which the affected utility or nonregulated affiliate has determined
the proposed price of services or products;
(f) An explanation of the reasons the
affected utility believes that the proposed price of services and products is
in the public interest; and
(g) A
statement demonstrating good cause for the requested deviation.
Section 6. Disclaimer
to be Employed When an Affiliate of an Affected Utility Uses the Utility's
Name, Trademark, Brand, or Logo. The disclaimer used by an affiliate of an
affected utility shall comply with the following requirements:
(1) The disclaimer shall state that
"(affiliate's name) is not the same company as (utility's name). (Affiliate's
name) is not regulated by the Kentucky Public Service Commission. You do not
have to buy (the affiliate's) (products or services, as applicable) in order to
continue to receive quality regulated services from the utility.";
(2) If an affiliate of an affected utility
uses the utility's name, trademark, brand, or logo in a print format, the
disclaimer shall appear in capital letters on the first page or at the first
point where the utility's name, trademark, logo or brand appears;
(3) If an affiliate of an affected utility
uses the utility's name, trademark, brand, or logo in a televised format, the
disclaimer shall appear at the first point at which the utility's name,
trademark, logo, or brand appears; and
(4) If an affiliate of an affected utility
uses the utility's name in an audio format, the disclaimer shall be spoken at
the close of the advertisement.
STATUTORY AUTHORITY:
KRS
278.040(3),
278.2201,
278.280(1)