{"data":{"id":"us-ky/krs-278.670","jurisdiction":"us-ky","citation":"KRS 278.670","heading":"Definitions for KRS 278.670 to 278.696 and 65.114.","body":"In addition to the definitions in KRS 278.010, except KRS 278.010(3)(a), which shall\napply unless they conflict with or the context otherwise requires, as used in KRS 278.670\nto 278.696 and 65.114:\n(1) \"Ancillary agreement\" means a bond, insurance policy, letter of credit, reserve\naccount, surety bond, interest rate lock or swap arrangement, hedging arrangement,\nliquidity or credit support arrangement, or other financial arrangement entered into\nin connection with securitized bonds;\n(2) \"Assignee\" means a l egally recognized entity to which an electric utility assigns,\nsells, or transfers, other than as security, all or a portion of its interest in or right to\nsecuritized property. The term \"assignee\" includes a corporation, limited liability\ncompany, general or limited partnership, public authority, trust, and financing entity\nto which an assignee assigns, sells or transfers, other than as security, its interest in\nor right to securitized property;\n(3) \"Bondholder\" means a person who holds a securitized bond;\n(4) \"Code\" means the Uniform Commercial Code, KRS Chapter 355;\n(5) \"Deferred costs\" means costs that have occurred but will be accounted for as part of\na regulatory asset;\n(6) \"Financing costs\" include the following:\n(a) Interest and acquisition, defeasan ce, or redemption premiums payable on\nsecuritized bonds;\n(b) Any payment required under an ancillary agreement and any amount required\nto fund or replenish a reserve account or other accounts established under the\nterms of any indenture, ancillary agreemen t, or other financing document\npertaining to securitized bonds;\n(c) Any other cost related to issuing, supporting, repaying, refunding, or servicing\nsecuritized bonds, including the following fees and costs without limitation:\n1. Servicing fees, accounting and auditing fees, trustee fees, consulting\nfees, structuring adviser fees, financial advisor fees, administrative fees,\nplacement and underwriting fees, independent director and manager\nfees, rating agency fees, stock exchange listing and compliance fees,\nsecurity registration fees, and filing fees;\n2. Capitalized interest and information technology programming costs; and\n3. Any other costs necessary to otherwise ensure the timely payment of\nsecuritized bonds or other amounts or charges payable in connection\nwith the bonds, including costs related to obtaining the financing order;\n(d) Any taxes and license fees or other fees imposed on the revenues generated\nfrom the collection of the securitized surcharge or otherwise resulting from\nthe collection of securitized surcharges, in any such case whether paid,\npayable, or accrued;\n(e) Any state or local taxes, franchise taxes, gross receipts, and other taxes or\nsimilar charges, including commission assessment fees, whether paid,\npayable, or accrued; and\n(f) Any costs associated with performance of the commission's responsibiliti es\nunder KRS 278.670 to 278.696 and 65.114 in connection with:\n1. Approving, approving subject to conditions, or rejecting an application\nfor a financing order; and\n2. Retaining counsel, one (1) or more financial advisors, or other\nconsultants as deemed appropriate by the commission and paid pursuant\nto KRS 278.670 to 278.696 and 65.114, for the issuance advice letter\nprocess;\n(7) \"Financing order\" means an order issued by the commission that authorizes the:\n(a) Issuance of securitization bonds;\n(b) Imposition, collection, and periodic adjustment of a securitized surcharge;\n(c) Creation of securitized property; and\n(d) Sale, assignment, or transfer of securitized property to an assignee;\n(8) \"Financing party\" means bondholders and trustees, collateral agents , any party\nunder an ancillary agreement, or any other person acting for the benefit of\nbondholders;\n(9) \"Financing statement\" has the same meaning as in KRS 355.9-102;\n(10) \"Formula-based true-up mechanism\" means a reconciliation or true -up process that\nis used to identify over collection or under collection of the securitized surcharge;\n(11) \"Issuance advice letter\" means a letter from the utility to the commission that\ndescribes the final terms and conditions for the bond issuance, including but not\nlimited to the actual structure of the bond issue, pricing, and other bond features\nsuch as coupon rates, redemption, and call provisions, and current market\nconditions affecting the bond issuance;\n(12) \"Nonbypassable\" means the payment of a securitized utilit y charge may not be\navoided by any existing or future retail customer including special contract\ncustomers;\n(13) \"Pledgee\" means a financing party to which an electric utility or its successors or\nassignees mortgages, negotiates, pledges, or creates a secu rity interest or lien on all\nor any portion of its interest in or right to securitized property;\n(14) \"Regulatory asset\" means, under the standardized financial accounting standards\nadopted by the commission, expenses that have been authorized by the commi ssion\nto be capitalized for consideration of recovery in future rates that would otherwise\nbe treated as an expense in a current accounting period;\n(15) \"Retired generation costs\" means:\n(a) Pretax costs with respect to retired or abandoned facilities that  are included as\ndeferred costs subject to an application for a financing order and include but\nare not limited to:\n1. The undepreciated investment in the retired or abandoned electric\ngenerating facility and in any facilities ancillary thereto or used in\nconjunction therewith;\n2. Costs of decommissioning and restoring the site of the electric\ngenerating facility;\n3. Other applicable capital and operating costs; and\n4. Accrued carrying charges and deferred costs;\n(b) Reduced by:\n1. Insurance, scrap, and salvage proceeds;\n2. Applicable unamortized regulatory liabilities for excess deferred income\ntaxes; and\n3. The present value of return on all accumulated deferred income taxes\nrelated to pretax costs with respect to a retired or aban doned facility and\nrelated facilities, including those due to bonus and accelerated tax\ndepreciation and abandonment losses; and\n(c) Added to pretax costs the electric utility has previously incurred related to the\nretirement or abandonment of an electric generating facility and related\nfacilities offering before June 29, 2023, including costs associated with:\n1. The decommissioning and restoration of the site; and\n2. Environmental compliance related to the operation and retirement of the\nelectric generating facility;\n(16) \"Securitization\" means a structured process where interests in debt instruments or\nother receivable income are packaged, underwritten, and sold as asset -backed\nmarketable securities such as bonds;\n(17) \"Securitized bonds\" means bonds, debe ntures, notes, certificates of participation,\ncertificates of beneficial interest, certificates of ownership, or other evidences of\nindebtedness or ownership that have a maturity date as determined reasonable by\nthe commission, but not later than thirty (3 0) years from the issue date, that are\nissued by an electric utility or assignee pursuant to a financing order, the proceeds\nof which are used directly or indirectly to recover, finance, or refinance capitalized\ncost assets and financing costs that are sec ured by or payable from securitized\nutility property;\n(18) \"Securitized costs\" include retired generation costs, as well as the unamortized book\nvalue of extraordinary storm costs or other deferred costs associated with prior\nincurrences, but does not include ongoing utility investments or operating costs;\n(19) \"Securitized property\" means:\n(a) All rights and interests of a utility, its successor, or assignee under a financing\norder, including the right to impose, bill, charge, collect, and receive\nsecuritized surcharges authorized under the financing order and to obtain\nperiodic adjustments to those charges authorized under KRS 278.670 to\n278.696 and 65.114 and as provided in the financing order; and\n(b) All revenues, collections, claims, rights to payments , payments, moneys, or\nproceeds arising from the rights and interests specified in the financing order,\nregardless of whether those revenues, collections, claims, rights to payment,\npayments, moneys, or proceeds are imposed, billed, received, collected, or\nmaintained together with or commingled with other revenues, collections,\nrights to payment, payments, moneys, or proceeds;\n(20) \"Securitized surcharge\" means the amounts authorized by the commission to repay,\nfinance, or refinance securitized costs and fi nancing costs that are, except as\notherwise provided for in KRS 278.670 to 278.696 and 65.114:\n(a) Nonbypassable and imposed on, and are a part of, all retail customer bills;\n(b) Collected, in full and separate from the utility's tariffed rates, special co ntract\nrates, or other mechanisms by an electric utility or by its successors,\nassignees, or collection agents; and\n(c) Paid by all existing or future retail customers receiving electrical service from\nthe electric utility or its successors or assignees un der commission-approved\nrate schedules even if a retail customer elects to purchase electricity from an\nalternative electricity supplier following a fundamental change in regulation\nof public utilities in the Commonwealth; and\n(21) \"Utility\" has the same m eaning as in KRS 278.010(3)(a) but shall not include any\nutility organized under KRS Chapter 279.","path":["KRS Chapter 278"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=53800","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:53:31Z","sha256":"fadeaafa19de2eb688c35c2f7e88977bf0fafc026e9dd45e9182fe4ad0b0fcc7","source_id":"us-ky","stale":false,"prev":"us-ky/krs-278.665","next":"us-ky/krs-278.672"},"notice":"GroundRules: Original legal text. Not legal advice."}