KRS 278.2207: Transactions between utility and affiliate -- Pricing requirements --

Request for deviation.

(1) The terms for transactions between a utility and its affiliates shall be in accordance

with the following:

(a) Services and products provided to an affil iate by the utility pursuant to a tariff

shall be at the tariffed rate, with nontariffed items priced at the utility's fully

distributed cost but in no event less than market, or in compliance with the

utility's existing USDA, SEC, or FERC approved cost al location

methodology.

(b) Services and products provided to the utility by an affiliate shall be priced at

the affiliate's fully distributed cost but in no event greater than market or in

compliance with the utility's existing USDA, SEC, or FERC approved c ost

allocation methodology.

(2) A utility may file an application with the commission requesting a deviation from

the requirements of this section for a particular transaction or class of transactions.

The utility shall have the burden of demonstrating tha t the requested pricing is

reasonable. The commission may grant the deviation if it determines the deviation

is in the public interest.

(3) Nothing in this section shall be construed to interfere with the commission's

requirement to ensure fair, just, and reasonable rates for utility services.