KRS 96.810: Use of revenues -- Reduction of rates -- Equity of municipality.

(1) The board shall devote all moneys derived from any source other than the issuance

of bonds to or for the payment of all operating expenses; bond interest and

retirement and sinking fund payments; the acquisition and improvement of the

electric plant; conti ngencies; other obligations incurred in the operation and

maintenance of the electric plant and the furnishing of electric service; the state, any

county, any school district, any municipality, and any other special taxing district in

which the board opera tes, of the same respective amounts as provided in KRS

96.820, or any other additional amounts which the board pursuant to its contract

with the Tennessee Valley Authority or other governmental agencies collects as tax

equivalents for any taxing jurisdicti on if the board contracts with the Tennessee

Valley Authority or any governmental agency for the purchase and resale of

electrical energy, or if the board does not contract with the Tennessee Valley

Authority or any other governmental agency for the purcha se or resale of any

electrical energy and if it has met all obligations imposed on it by KRS 96.550 to

96.900 it may at the end of any twelve (12) months ending June 30 transfer any

surplus to the general fund of the municipality which authorized it; the r edemption

and purchase of electric plant bonds, in which case the bonds should be canceled;

the creation and maintenance of a cash working fund; and the payment of an amount

to the general funds of the municipality.

(2) After the establishment of proper re serves, if any, and after complying with the

above provisions of this section, any surplus of proceeds shall be devoted solely to

the reduction of rates. The equity of the municipality contracting with the Tennessee

Valley Authority or other governmental a gency for the purchase and resale of

electrical power or energy shall be the purchase price of the electric plant, less the

face value of outstanding bonds, or, if there is no purchase price, the original cost of

the plant as defined by the Federal Energy Regulatory Commission, less accrued

depreciation, less the face value of the outstanding bonds. The payment of bonds or

the acquisition or improvement of property from the receipts derived from electric

service or any other operation of the board shall not be considered to increase the

equity or investment of the municipality.