KRS 278.2213: Separate recordkeeping for utility and affiliate -- Prohibited business

practices -- Confidentiality of information -- Notice of service available from

competitor.

The provisions of this section shall govern a public utility company's activities rela ted to

the sharing of information, databases, and resources between its employees or an affiliate

involved in the marketing or the provision of nonregulated activities and its employees or

an affiliate involved in the provision of regulated activities.

(1) A utility and its affiliate shall be separate corporate entities and maintain separate

books and records. If a utility and nonregulated affiliate have common officers,

directors, or employees, the fees, compensation, and expenses of the individuals

involved shall be subject to the cost allocation requirements set forth in KRS

278.2203 and 278.2207. Any utility that provides nonregulated activities shall

separately account for all investments, revenues, and expenses in accordance with

its filed cost allocation manual.

(2) A utility shall not provide advertising space in its billing envelope to its affiliates or

for its nonregulated activities unless it offers the same to competing service

providers on the same terms it provides to its affiliates. This subsec tion applies to

nonregulated activities only.

(3) A utility shall not attempt to persuade customers to do business with its affiliates by

offering rebates or discounts on tariffed services.

(4) All utility company employees engaged in the merchant function shall abide by all

standards promulgated by applicable FERC orders and regulations.

(5) No utility employee shall share any confidential customer information with the

utility's affiliates unless the customer has consented in writing, or the information is

publicly available or is simultaneously made publicly available.

(6) All dealings between a utility and a nonregulated affiliate shall be at arm's length.

(7) Employees transferring from the utility to an affiliate shall not disclose to the

affiliate conf idential information or take with them any competitively sensitive

materials.

(8) Neither a utility nor its employees or agents shall solicit business on behalf of an

affiliate or for its nonutility services.

(9) A utility that carries out any research and development or joint marketing and

promotion with its affiliate for its nonregulated activities shall be subject to the cost

allocation requirements set forth in KRS 278.2203.

(10) Except as provided in subsection (5) of this section, if a utility is enga ged in a

nonregulated activity, marketing employees for the nonregulated activity shall not

have access to the customer information provided to the utility when the customer

places an order for regulated service.

(11) A utility shall not provide any type of undue preferential treatment to a nonregulated

affiliate to the detriment of a competitor.

(12) A utility shall notify the customer that competing suppliers of a nonregulated

service exist if:

(a) The utility receives a request for a recommendation from a customer seeking a

specific service which is offered by the utility's affiliate or by the utility itself;

and

(b) The utility mentions itself or its affiliate when making the recommendation to

the customer.

(13) The utility's name, trademark, brand, or logo shall not be used by a nonregulated

affiliate in any type of visual or audio media without a disclaimer. The commission

shall develop specifications for the disclaimer. The disclaimer shall be approved by

the commission prior to use in any advertisement by the utility's affiliate.

(14) A utility shall not enter into any arrangements for financing nonregulated activities

through an affiliate that would permit a creditor upon default to have recourse to the

assets of the utility.

(15) A utility shall inform the commission of all new nonregulated activities begun by

itself or by the utility's affiliate within a time to be set by the commission.

(16) Start-up costs associated with the formation of a nonregulated affi liate shall not be

included in the utility's rate base.

(17) The commission may require the utility to file annual reports of information related

to affiliate transactions when necessary to monitor compliance with these

guidelines.