KRS 65.206: Establishment of program to advance conservation and efficient use of

energy and water resources.

(1) Pursuant to KRS 65.205 to 65.209, the governing body of a local government may

establish a program to advance the conservation and efficient use of ener gy and

water resources within its jurisdiction, which program is hereby declared to be a

valid exercise of the powers of local government and is in the best interest of the

people of the Commonwealth, by allowing for energy projects to be financed by

assessments imposed upon the real property being improved through the energy

project. Nothing in KRS 65.205 to 65.209 shall be interpreted to:

(a) Expand the powers of eminent domain for a local government, state agency,

or private entity or to allow a local go vernment, state agency, or private entity

to use the powers of eminent domain under this program; or

(b) Disregard or allow contravention of any net metering ordinance or policy, any

generator interconnection ordinance or policy, or any rate ordinance duly

adopted by the governing body.

(2) (a) To establish a program, the governing body of a local government shall adopt

a resolution or ordinance providing the terms and conditions of the program,

including but not limited to:

1. A statement that the local go vernment intends to utilize assessments on

relevant real property to support private sector energy projects;

2. The designation of an EPAD, and a description of the boundaries

thereof; and

3. A procedure for the owners of record of real property located wi thin an

EPAD to petition the local government for participation in the program.

(b) Once a program is established, the governing body of a local government may

amend the terms and conditions of the program by resolution or ordinance;

except that no amendme nt shall be adopted to retroactively change the

conditions under which an existing assessment was imposed, unless the owner

of record of the affected real property consents to the amendment in writing.

(c) A local government may:

1. Hire program staff, or contract with a third -party entity to administer a

program;

2. Impose fees on participating property owners to offset the costs of

administering the program, including assessment and collection

functions of various county offices; except that these fees sh all not

exceed the cost of services performed; and

3. Engage financing for the purpose of administering the program from

financial institutions with a physical presence in Kentucky whose

deposits are insured by the Federal Deposit Insurance Corporation.

(d) Any combination of local governments may agree to jointly implement or

administer a program.

(3) (a) The geographic area designated by the governing body of a local government

as the EPAD:

1. May include the entire local government or any portion thereof; and

2. Shall be wholly within the boundaries of the local government.

(b) A local government may designate more than one (1) separate EPAD within

its boundaries.

(4) An authorized official of a local government that has established a program may

approve a request from the owner of record of real property located within an EPAD

to impose an assessment upon the property, which shall be used to repay the owner's

financing of an energy project on that property and the costs of any upgrades to the

electrical or gas distribution system connected to that property necessary to

accommodate the energy improvement. The upgrade costs shall be paid to the

owner of the electrical distribution system. The financing may be provided by a

third party or, if authorized by the local government, by any local government.

(5) Each energy project approved for participation in the program shall include a review

of the property's baseline energy or water usage conditions and the energy or water

savings projected to be achieved as a result of the energy project.

(6) A program may authorize a participating property owner to:

(a) Directly purchase; or

(b) Acquire by contract, through a lease, power purchase agreement, or other

service contract;

the equipment and materials necessary f or the installation or modification of an

energy improvement.

(7) In addition to the authority provided in the Kentucky Revised Statutes for local

governments to levy special assessments with the same lien status as a property tax,

the governing body of a local government that establishes a program pursuant to

this section may exercise powers granted under KRS 65.205 to 65.209.