KRS 278.285: Demand-side management plans -- Review and approval of proposed plans

and mechanisms -- Assignment of costs -- Home energy assistance programs.

(1) The commission may determine the reasonableness of demand -side management

plans proposed by any utility under its jurisdiction. Factors to be considered in this

determination include, but are not limited to, the following:

(a) The specific changes in customers' consumption patterns which a utility is

attempting to influence;

(b) The cost and benefit analysi s and other justification for specific demand -side

management programs and measures included in a utility's proposed plan;

(c) A utility's proposal to recover in rates the full costs of demand -side

management programs, any net revenues lost due to reduced sales resulting

from demand-side management programs, and incentives designed to provide

positive financial rewards to a utility to encourage implementation of cost -

effective demand-side management programs;

(d) Whether a utility's proposed demand -side man agement programs are

consistent with its most recent long-range integrated resource plan;

(e) Whether the plan results in any unreasonable prejudice or disadvantage to any

class of customers;

(f) The extent to which customer representatives and the Office of the Attorney

General have been involved in developing the plan, including program design,

cost recovery mechanisms, and financial incentives, and if involved, the

amount of support for the plan by each participant, provided however, that

unanimity among the participants developing the plan shall not be required for

the commission to approve the plan;

(g) The extent to which the plan provides programs which are available,

affordable, and useful to all customers; and

(h) Next-generation residential utility meters that can provide residents with

amount of current utility usage, its cost, and can be capable of being read by

the utility either remotely or from the exterior of the home.

(2) A proposed demand-side management mechanism including:

(a) Recover the full costs of commission -approved demand -side management

programs and revenues lost by implementing these programs;

(b) Obtain incentives designed to provide financial rewards to the utility for

implementing cost-effective demand-side management programs; or

(c) Both of the actions specified

may be reviewed and approved by the commission as part of a proceeding for

approval of new rate schedules initiated pursuant to KRS 278.190 or in a separate

proceeding initiated pursuant to this section which shall be limited to a review of

demand-side management issues and related rate -recovery issues as set forth in

subsection (1) of this section and in this subsection.

(3) The commission shall assign the cost of demand-side management programs only to

the class or classes of customers which benefit from the programs. The commission

shall allow individual industrial customers with energy intensive processes to

implement cost-effective energy efficiency measures in lieu of measures approved

as part of the utility's demand -side management programs if the alternative

measures by these customers are not subsidized by other customer classes. Such

individual industrial customers sha ll not be assigned the cost of demand -side

management programs.

(4) Home energy assistance programs may be part of a demand -side management

program. In considering a home energy assistance program, the commission shall

only utilize the criteria set forth in subsections (1)(f) and (3) of this section.