AN ACT relating to investor-owned electric utilities.

Create new sections of KRS Chapter 278 to define terms; give permissive authorization to an investor-owned electric utility to apply to the Public Service Commission to finance though securitization both extraordinary costs and costs associated with the retirement of electric generation of more than $200 million dollars for a single regulatory asset or more than $275 million for multiple regulatory assets; prescribe the contents of an application for a financing order; prescribe the way proceedings of the commission will handle applications for financing orders; require a decision of the commission on securitization to be predicated on fair, just, and reasonable and the public interest of the utility customers; allow for securitization of deferred costs, judicial review, obtaining advisors and other consultants; require the commission to make a decision in 180 days; establish an issuance advice letter process; prescribe the contents of a financing order; establish the method for the utility to put a securitization surcharge on customer bills and make the charge irrevocable; establish a formula-based true-up mechanism for reconciling over collection or under collection of the surcharge; establish a method of tracing funds; allow the commission to issue a disapproval letter to stop the issuance of securitized bonds; make the financing order effective regardless of reorganization, bankruptcy, or other insolvency proceedings of an electric utility; allow for refunding bonds through a subsequent financing order; allow for the transfer of securitized property and interests in the property to others and maintain the property right and interest until the securitized bonds are paid in full; allow for sequestration of payment by a court and create a priority of liens, perfection, and enforcement; require the lien to be recorded in the Office of the Secretary of State and allow for a right to sue; state that securitized bonds are not a debt of the Commonwealth or any other agency of the state and there is no requirement to levy taxes or make appropriations to pay off securitized bonds; require that the bonds are not a debt of the electric utility; create a list of prohibited actions by state agencies; identify agents that are not allowed to invest in the bonds; clarify that an assignee of financing party is not an electric utility; allow severability if any provision is invalidated.