{"data":{"id":"us-ky/krs-278.684","jurisdiction":"us-ky","citation":"KRS 278.684","heading":"Property right to securitized property -- Right to transfer or assign --","body":"Default and sequestration -- Rights of successor to electric utility.\n(1) All securitized property that is specified in a financing order constitutes an existing,\npresent, intangible property right or interest therein, notwithstanding the fact that\nthe imposition and collection of securitized surcharges depends on the electric\nutility performing its servicing functions relating to the collection of securitized\nsurcharges and on future electricity consumption. The property right or interest\ntherein exists regardless:\n(a) Of whether the revenues or proceeds arising from the property have been\nbilled, accrued, or collected; and\n(b) That the value or amount of the property is dependent on the future provision\nof service to customers by the electric utility, its successors, or assignees and\non the future consumption of electricity by its customers.\n(2) Securitized property specified in a financing order exists until the securiti zed bonds\nissued pursuant to the financing order are paid in full and all financing costs and\nother costs of the securitized bonds have been recovered in full.\n(3) Any portion of securitized property specified in a financing order issued to an\nelectric uti lity may be transferred, sold, conveyed, or assigned to a successor or\nassignee that is wholly -owned, directly or indirectly, by the electric utility and\ncreated for the limited purpose of acquiring, owning, or administering securitized\nproperty or issuing  securitized bonds under the financing order. Any portion of\nsecuritized property may be pledged to secure:\n(a) Securitized bonds issued pursuant to the financing order;\n(b) Amounts payable to financing parties and to counterparties under any\nancillary agreements; and\n(c) Other financing costs.\n(4) Any transfer, sale, conveyance, assignment, grant of a security interest in, or pledge\nof securitized property by an electric utility or an affiliate of the electric utility to an\nassignee, to the extent previous ly authorized in a financing order, does not require\nthe prior consent and approval of the commission.\n(5) If an electric utility defaults on any required remittance of securitized surcharges\narising from securitized property specified in a financing order , a court, upon\napplication by an interested party and without limiting any other remedies available\nto the applying party, shall order the sequestration and payment of the revenues\narising from the securitized property to the financing parties, their succ essors, or\nassignees. The financing order shall remain in full force and effect notwithstanding\nany reorganization, bankruptcy, or other insolvency proceedings with respect to the\nelectric utility, its successors, or assignees.\n(6) The interest of a transferee, purchaser, acquirer, assignee, or pledgee in securitized\nproperty specified in a financing order issued to an electric utility, and in the\nrevenue and collections arising from that property, shall not be subject to setoff,\ncounterclaim, surcharge, or defense by:\n(a) The electric utility; or\n(b) Any other person in connection with the reorganization, bankruptcy, or other\ninsolvency of the electric utility or of any other entity.\n(7) Any successor to an electric utility, whether pursuant to any reorganization,\nbankruptcy, or other insolvency proceeding, any merger or acquisition, sale or other\nbusiness combination, transfer by operation of law as a result of the electric utility\nrestructuring or otherwise, shall perform and satisf y all obligations of, and have the\nsame rights under a financing order as, the electric utility under the financing order\nin the same manner and to the same extent as the electric utility, including\ncollecting and paying to the person entitled to receive t he revenues, collections,\npayments, or proceeds of the securitized property. Nothing in KRS 278.670 to\n278.696 and 65.114 shall limit or impair any authority of the commission\nconcerning the transfer or succession of interests of electric utilities.\n(8) Securitized bonds shall be nonrecourse to the credit or any assets of the electric\nutility other than the securitized property as specified in the financing order and any\nrights under any ancillary agreement.","path":["KRS Chapter 278"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=53807","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:53:31Z","sha256":"000143a8023f1c468aad3ca9c8dff10f850bc5d3e99948fae937df8782c3bdd5","source_id":"us-ky","stale":false,"prev":"us-ky/krs-278.682","next":"us-ky/krs-278.686"},"notice":"GroundRules: Original legal text. Not legal advice."}