KRS 278.264: Commission approval or denial of retirement of electric generating unit --

Rebuttable presumption against retiring fossil fuel -fired generating unit --

Evidence of costs -- Report -- Definitions for section -- Recovery of costs to

utility related to decommissioning, removal and salvage, and depreciation

allowed.

(1) Notwithstanding any provision of law to the contrary, the commission shall have

the authority to approve or deny the retirement of an electric generating unit owned

by a utility. P rior to retiring an electric generating unit, a utility shall apply to the

commission for an order approving the retirement, and shall give the commission

thirty (30) days' notice of the application. The application shall include a statement

certifying the applicant's compliance with the requirements of KRS 164.2807. The

commission shall enter an order approving, approving with conditions, or denying

the application within one hundred eighty (180) days of receiving an

administratively complete application.

(2) There shall be a rebuttable presumption against the retirement of a fossil fuel -fired

electric generating unit. Subject to the provisions of subsection (6) of this section,

the commission shall not approve the retirement of an electric generating unit,

authorize a surcharge for the decommissioning of the unit, or take any other action

which authorizes or allows for the recovery of costs for the retirement of an electric

generating unit, including any stranded asset recovery, unless the presumption

created by this section is rebutted by evidence sufficient for the commission to find

that:

(a) The utility will replace the retired electric generating unit with new electric

generating capacity that:

1. Is dispatchable by either the utility or the regional tr ansmission

organization or independent system operator responsible for balancing

load within the utility's service area;

2. Maintains or improves the reliability and resilience of the electric

transmission grid;

3. Maintains the minimum reserve capacity re quirement established by the

utility's reliability coordinator; and

4. Has the same or higher capacity value and net capability, unless the

utility can demonstrate that such capacity value and net capability is not

necessary to provide reliable service;

(b) The retirement will not harm the utility's ratepayers by causing the utility to

incur any net incremental costs to be recovered from ratepayers that could be

avoided by continuing to operate the electric generating unit proposed for

retirement in compliance with applicable law;

(c) The decision to retire the fossil fuel -fired electri c generating unit is not the

result of any financial incentives or benefits offered by any federal agency;

and

(d) The utility shall not commence retirement or decommissioning of the electric

generating unit until the replacement generating capacity meetin g the

requirements of paragraph (a) of this subsection is fully constructed,

permitted, and in operation, unless the utility can demonstrate that it is

necessary under the circumstances to commence retirement or

decommissioning of the existing unit earlier.

(3) The utility shall at a minimum provide the commission with evidence of all known

direct and indirect costs of retiring the electric generating unit, as well as all costs

and depreciation expenses recovered pursuant to subsection (6) of this section, and

demonstrate that cost savings will result to customers as a result of the retirement of

the electric generating unit.

(4) The commission shall prepare and submit an annual report to the Legislative

Research Commission by December 1 of each year detailing:

(a) The number of requests by utilities to retire electric generating units in the

Commonwealth, the nameplate capacity of each of those units, and whether

the request was approved or denied by the commission;

(b) The impact of any commission -approved retirement of an electric generating

unit on the:

1. Commonwealth's generation fuel mix;

2. Required capacity reserve margins for the utility;

3. Need for capacity additions or expansions at new or existing facilities as

a result of the retirement; and

4. Need for additional purchase power or capacity reserve arrangements;

and

(c) Whether the retirement resulted in stranded costs for the ratepayer that will be

recovered by the utility through a surcharge or some other separate charge on

the customer bill.

(5) As used in this section:

(a) "Dispatchable" means a source of electric power generation that is available

on demand, that is not intermittent, and that can be adjusted to increase or

decrease its power output upon request of a power grid operator or oth erwise

upon demand or request, or that can have its power output adjusted in

response to market or system needs; and

(b) "Intermittent" means:

1. A source of electric power generation from a solar photovoltaic, solar

thermal heating, concentrating solar th ermal collector, or other solar

energy collection or generation system;

2. A source of electric power that generates energy by harnessing wind

power or energy, whether through a turbine or other device;

3. Geothermal energy, biomass energy, anaerobic diges tion, or combined

heat and power from solar, wind, geothermal, or anaerobic digestion

sources;

4. Any short duration energy storage, which includes any method of

storing generated electricity for later dispatch to the grid, whether alone

or in conjunction with any other intermittent sources described in this

paragraph, that is equivalent to less than forty -eight (48) hours of the

average peak generation of the unit it is used to offset; or

5. Conventional hydropower and pumped storage hydropower, unless the y

are capable of providing energy on demand, in which case they shall be

deemed to be dispatchable.

(6) (a) Notwithstanding any provision of law to the contrary, this section shall not be

construed as limiting the commission's authority to approve a utilit y's right to

record and seek, prior to retirement authorization, the recovery of any electric

generating unit's decommissioning, removal and salvage costs, and

depreciation expenses through rates over the electric generating unit's

estimated depreciable life.

(b) Approval to recover any costs or expenses under this subsection shall not be

considered approval of, or support for, retirement or approval of timing of

retirement of an electric generating unit in any proceeding considering a

retirement application filed pursuant to subsection (1) of this section.