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A
Before
I
ask
the
clerk
to
call
the
roll
I
actually
would
like
to
take
a
moment
for
us
to
introduce
one
of
our
our
newest
members
that
we
have
on
natural
resources
and
we
like
to
welcome
Cassie
Armstrong
Chambers
to
Natural
Resources
Castle.
Would
you
like
to
make
a
few
comments
this
morning
as
we
get
started.
C
C
E
A
I'm
Cortland
all
right,
we
do
have
a
quorum,
we're
going
to
go
and
get
started
at
this
time.
I'm
going
to
ask
I'll
stick
to
the
order
of
it
to
have
Senate
Bill
281
Senator
Howe.
If
you
want
to
go
ahead
and
come
to
the
table,
bring
any
guests,
you've
got
and
if
you
don't
mind
once
you
get
to
the
table,
be
sure
your
mics
are
on
and
then
identify
yourself
for
your
guests
for
our
records.
Please
thank.
F
A
Mr
have
before
you
get
started.
If
you
don't
mind,
there's
a
substitute
for
it.
So
let's
go
ahead
and
have
a
motion
to
adopt
the
substitute
to
have
a
motion
motion.
Second,
for
your
substitutes,
very
popular
up
here,
all
those
in
favor
signify,
I
suppose
likewise
go
ahead
and
I
will
be
speaking
to
the
substitute.
F
Mr
chairman
10
years
ago,
when
you
and
Senator
Webb
and
some
others
were
here,
you
guys
passed
a
mandate
to
for
finance
cabinet,
develop
a
strategy
on
how
to
transition
state
fleets
to
alternative
fuels,
and
you
task
them
with
creating
a
plan
to
do
this
and
in
2021
they
finally
got
around
to
working
through
that
plan.
Apparently
it
was
a
lot
more
difficult
than
any
of
you
guys
had
anticipated
at
the
time,
but
and
now
we
need
to
go
and
require
some
implementation
of
this
plan.
F
We
have
a
lot
of
alternative
fuel
vehicles
that
aren't
using
alternative
fuel,
and
this
is
something
we
can
do
to
address
that
part
of
it.
It
supports
many
missions
in
this,
but
but
most
especially
our
corn
and
soybean
producers
and
other
alternative
fuel
producers
that
work
through
ethanol
and
biodiesel
in
the
state
and
if
we're
going
to
act.
A
We
think
we
do
have
so
we
have
anybody
who
wants
to
speak
on
this
particular
field.
All
right,
we
do
not
so
at
this
time
I'll
ask
the
clerk
to
call
the
roll.
G
A
A
Actually,
we
have
a
motion
for
consent.
Well,
we
have
motion
for
consent
and
the
second
then
we'll
go
ahead
and
put
that
on
consent.
Then,
okay,
all
those
in
favor,
the
sign
of
I
I
suppose.
Likewise,
we
have
been
consent
and
I
wanted
to
say,
I,
remember,
Senator,
Lindy
casewear
was
a
was
the
first
person
I
remember
talking
about
this
and
my
my
tenure
here
and
he
was
very
big
proponent
about
wanting
to
get
that
done
and
you're
right.
It's
been
far
far
too
long
to
be
waiting
around
for
this
to
be
implemented.
A
Excuse
me
for
discussion:
only
this
is
a
big
bill,
so
fortunately,
we've
got
plenty
of
time
left
in
our
meeting
today
to
have
it.
So
if
you
would
like
to
Senator
from
Meyer,
go
ahead
and
come
to
the
table
with
anyone,
you
have
with
you
that,
like
to
speak,
and
please
ask
any
of
your
guests
identify
themselves
for
our
records.
H
Let
him
introduce
himself
when
he's
ready
to
speak,
but
Senate
Bill
245
is
I,
get
very
excited
about
Economic
Development
and
what
I
recognize
that
we're
trying
to
achieve
with
Senate
Bill
245
is
reliable,
affordable
and,
in
fact,
a
stable
relative
to
regulations
but
energy
policy
for
Kentucky
and
where
I'm
hopeful
that
you
can
provide
us
your
input
as
well.
We
recognize
we're
going
to
really
work
on
this
in
the
interim,
so
we'll
be
eager
to
hear
from
you,
but
relative
to
the
recognition
wind
in
solar.
H
Those
might
serve
Kentucky
at
Peak
moments
in
time,
but
that's
not
going
to
be
our
base.
Source
we've
got
such
a
treasure
of
coal
and
we
we
want
to
continue
to
recognize
that,
but
we've
also
got
some
efforts
towards
the
nuclear
task
force
and
that
is
going
to
be
a
real
value
to
recognize
we're
under
pressure.
The
federal
government
has
given
us
to
2030.-
that's
not
enough
time,
but
we
know
that
that
is
the
time
frame.
H
What
I
want
to
acknowledge
245
is
meant
to
be
a
10
20
30,
but
really
a
50-year
plan
and
I
want
you
to
imagine
that
we've
got
a
dart
board
and
the
center
of
that
board
is
a
Smart
Energy
policy
and
if
we're
going
to
recognize
that
each
Dart
is
some
sort
of
an
energy
source
and
and
we're
all
going
to
work
together
and
be
throwing
darts
towards
this,
to
try
to
achieve
a
Smart
Energy
policy
in
Kentucky.
But
we
need
some
tools
to
do
that.
H
So
that's
where
the
securitization
element
of
Senate
Bill
245
does
come
in
because
we
need
a
bridge,
but
we
also
need
the
affordability
aspect.
So
this
helps
us
to
bridge
towards
the
affordability
and
then
the
reliability
is,
let's,
let's
bring
all
of
the
potential
sources
of
energy
coal
front
and
center
being
one
of
those
sources.
So
on
that
note,
my
hope
is
that,
as
we
move
towards
the
interim
we'll
be
able
to
start
to
address
multiple
sources
of
energy.
G
Guess
is
the
coal
Association
endorsed
this
particular
bill.
H
H
Okay
and
and
I
I
would
just
I'll
I'll,
be
taking
notes
from
here
forward
and
I
appreciate
that
question
Senator
wheeler
and
I'd
like
to
turn
it
over
to
the
expert
joining
me.
I
Excellent,
thank
you
Senator
and
thanks
thanks
everybody
for
giving
me
an
opportunity
to
to
speak
for
a
minute.
A
few
minutes
and
I'll
try
to
make
it
brief,
because
we're
talking
about
some
fun
Financial
tools,
but
my
name
is
Brad
Viator,
I,
I,
guess
historically
for
11
years
or
so
ran
external
Affairs
for
the
Edison
Electric
Institute,
which
is
the
true
Association
for
all
the
investor
on
utilities.
I
I
am
here
as
the
witness
for
the
investor
on
utilities
here
in
this
Commonwealth
almost
said,
State,
sorry
of
of
Kentucky
and
my
expertise
is
in
and
around
the
business
and
business
model
of
utilities.
That's
what
I,
where
I
focus.
E
I
Country
so
can
kind
of
answer
questions
as
we
get
into
it
more
about
how
other
places
have
have
utilized
this
tool:
I'm,
pretty
frequent
contributor
to
policy
conversations
and
all
the
national
organizations
Hello
Alex
I'm
speaking
in
a
webinar
for
Alec
next
week
in
CSL,
the
governor's
associations
Etc.
So
this
is
one
of
the
things
that
I
spend
my
time
on.
I
Here's
just
a
little
bit
of
an
outline
of
what
I
plan
to
talk
about,
don't
be
overwhelmed
by
the
fact
that
there
are
eight
points
I
will
I
will
try
to
do
it.
Do
it
quickly
because
keeping
everybody
awake
is
certainly
a
priority
to
kick
everything
off,
I
think
there's
just
one
important
thing
that
needs
to
be
said
about
investor
and
utilities
and
why
they
are
granted
the
Monopoly
status
that
they
are
granted
within
their
service
area.
And
the
reason
really
is.
It
goes
back
to
this.
I
This
court
case
the
Binghamton
Bridge
Supreme
Court
case
of
1865,
which
essentially
says
the
quote.
There
is
pretty
good
if
you
Embark
your
time,
money
and
skill
in
an
Enterprise
which
will
accommodate
the
public
necessity.
We
will
grant
to
you
for
a
limited
time
period
or
perpetuity
privileges
that
will
justify
the
expenditure
of
your
money
and
the
employment
of
your
time
and
skill.
The
regulatory
compact,
to
put
it
simply
and
more
straightforward,
is
the
original
public-private
partnership.
Investments
in
these
infrastructure
in
the
infrastructure
that
we
need
to
operate.
I
So
what
is
security?
What
is
securitization
so
when
you
go
in
and
say
you
build
an
asset
or
when
a
storm
comes
through
and
you
have
a
ton
of
damage
that
is
sustained.
But
for
this
purpose
we'll
talk
about
the
construction
of
an
asset.
When
you
go
in
and
build
an
asset,
you
decide
that
you're
making
a
commitment
with
the
utility
for
40
years.
They
are
going
to
pay
the
money
up
front
to
build
that
asset
and
they
will
get
paid
back
by
customers
over
the
course
of
say
40
years.
I
Well,
sometimes
something
will
come
into
play
that
will
make
that
asset
too
expensive
to
operate,
whether
it's
Federal,
Regulation
or
whatever.
We've
seen
a
lot
of
that
around
here,
and
so
you
are
beginning
to
evaluate
an
asset
and
you're
saying
look.
I
know
we
made
a
commitment
to
operate
this
thing
and
to
pay
this
thing
back
for
40
years,
but
we
would
rather
close
that
asset
and
replace
it
with
something
else
because
cost
to
continue
to
operate
it
or
simply
too
high
at
that
moment
in
time.
I
If
the
Public
Service
Commission
has
the
ability
to
securitize
that
asset,
what
they
would
be
able
to
do,
it's
essentially
it
right,
then
save
customers,
money
so
say
we're
32
years
into
40-year
asset
they're,
still
eight
years
left
that
needs
to
be
paid
back.
We
are
essentially
bankrupting
that
asset
at
the
moment
in
time,
attaching
a
bond
to
it
and
that
and
taking
the
earnings
from
the
utility
out
of
that
out
of
that
asset.
I
So
the
utilities
were
supposed
to
get
their
money
paid
back
over
the
next
eight
years,
but
they
are
going
to
forgo
that
they're
going
to
forego
the
seven
to
nine
percent
earnings
that
were
attached
to
it.
For
the
remaining
eight
years.
That
asset
is
going
to
be
owned
by
bondholders.
It
will
no
longer
be
owned
by
the
utility
that
is,
in
effect.
I
I
A
bunch
of
states
are
doing
this.
We're
really
seeing
this
trend
accelerate
and
they're
doing
it.
For
a
couple
of
in
a
couple,
different
categories
stranded
assets,
you
know,
you're
you're,
seeing
it
coveted
cost,
is
another
one
that
we
saw,
which
is
in
in
the
California
context,
but
you
know
you're,
seeing
it
for
stranded
assets,
so
it
might
not
be.
It
could
be
on
nuclear
investment.
I
We've
actually
seen
quite
a
few
of
those
you're,
seeing
it
around
coal,
retirements,
you're,
seeing
it
on
storm
costs
and
then
other
in
the
other
category.
One
of
the
things
that
we're
seeing
is
a
lot
of
states
are
starting
to
secure
test
fuel
costs.
You
might
remember,
there
was
a
big
winter
storm
in
Texas,
where
700
people
died
in
February
of
2021,
where
the
Electric
System
collapsed,
and
natural
gas
prices
shot
through
the
roof.
Some
of
the
costs
that
came
out
of
that
those
natural
gas
costs
in
particular
States.
I
I
How
does
securitization
benefit
customers?
It
costs
them?
I
mean
they
save
money,
the
the
long
and
short
of
it
is
they
save
money?
Decisions
been
made
that
you
know
an
asset
is
no
longer
going
to
be
utilized
and
it's
closed
well,
instead
of
just
closing
it
and
carrying
that
cost.
On
the
bill
for
the
next
eight
years,
you'll
build
a
security,
get
rid
of
it
from
the
utilities
sort
of
like
ownership
at
that
point
and
carry
those
costs
forward.
I
may.
A
Ask
make
one
point
here:
yes,
sir
I,
don't
necessarily
know
that
they
save
money
because
I
think
what
you're
seeing
is
the
utilities
and
correct
me
if
I'm
wrong
or
reacting
to
some
sort
of
a
federal
policy
change?
That's
now
punishing
them
if
they're
using
fossil
fuels,
for
example,
and
so
now,
if
you
look
at
the
plant
with
all
the
emissions
litigation
and
look
at
the
plant
with
them,
closing
the
2015
loophole
on
Ash.
J
A
All
the
money
is
going
to
cost.
Then
it's
going
to
be
too
expensive
to
use
something
that,
without
those
it'd
be
very
affordable,
which
right
we
all
know,
but
so,
even
though
you
do
spread
out
the
cost
for
it,
what's
going
to
be
replaced
with
with
the
renewable,
that's
still,
which
we've
seen
is
probably
going
to
be
another
seven
to
ten
cents
more
expensive
per
kilowatt
hour
than
what
they're
paying
for
with
what
they
had
so
really
the
rate
payer.
A
The
hidden
part
of
all
of
this-
that
is
the
direct
end
result
of
bad
policy
from
the
federal
level
is
at
this
rate.
Payer
now
is
going
to
be
punished
because
the
policy
is
is
is
making
them
pay
for
something
that
they
don't
even
get
to
use
the
benefit
of
anymore,
because
that
takes
away
the
reliability
and
that's
why
you
had
those
deaths
and
now
they're
going
to
be
forced
to
purchase
something,
that's
not
ready
or
fully
applicable
to
what
they
need,
not
good,
bad
or
indifferent.
A
I
I
I'll,
if
I
could
speak
to
that
just
for
for
a
moment,
look
I,
think
you
make
some
good
points
when
we
think
about
the
utility
Finance.
We
think
about.
Okay,
I've
got
these
rules
from
the
EPA
that
tell
me.
I've
got
to
install
this
scrubber
and
if
I'm
going
to
go
out
and
install
a
scrubber
on
a
coal
plant,
for
example,
it
might
cost
me
350
million
dollars
right
I
got
to
spend
350
million
dollars
on
an
asset.
I
That's
got
eight
years
left
and
I've
got
to
socialize
that
cost
right
and
so
I
make
a
consideration
of
okay,
350
million
dollars
more
on
an
asset
that
has
an
eight-year
useful
life.
You
know
to
go
for
maybe
we
can
carry
it
out
a
little
bit
further,
but
that's
sort
of
how
you
think
about
it
or
I
could
say
well
for
450
million
dollars,
I
could
build
a
gas
plant
and
I
could
sort
of
operate
that
going
forward.
I
I
think
the
renewable
piece,
practically
speaking,
is
you
know
in
a
lot
of
these
in
a
lot
of
these
places?
Kentucky.
Certainly
one
of
them
is
it's
helpful
around
the
edges.
It
is
not
base
load
power
and
it
is
not
the
thing
that
you're
replacing
those
assets
worth
and
I
think
one
of
the
reasons
I'm
glad
y'all
are
taking
this
multi-year
approach
to
it.
I
Is
this
bill
also
talks
about
those
investments
in
other
sort
of
Base
load
generation,
whether
it's
conversation
about
renewable
natural
gas,
whether
it's
a
conversation
about
nuclear
frankly
I
think,
there's
room
for
discussion
about
how
you
know
some
natural
gas
can
be
utilized
to
replace
this
capacity
as
a
practical
matter,
I
think
that's
the
conversation
that
that
I'm
I'm
happy
you
all
are
having
because
you're
thinking
about
all
right
look
I'm
going
to
replace
this
important
base
load
for
the
next
40
years
and
I'm
not
just
going
to
do
it
with
wind
and
solar.
I
That's
just
going
to
show
up
when
the
Sun's
shining
and
the
wind's
blowing
I'm
going
to
do
it
with
something
that's
going
to
be
there
all
the
time
and
I
think
that's
why
we're
hopeful
that
this
two-year
conversation
where
stakeholders
are
invited
in
will
result
in
a
conclusion
where
you're
making
thoughtful?
You
know
choices
for
the
future
of
the
Commonwealth.
A
G
You
I
guess
one
question:
I
had
I
mean:
is
bankruptcy
really
a
fair
comparison,
because
the
utility
is
actually
getting
made
whole
when
they
securitize
an
asset?
Are
they
not
they're
getting
their
Capital
back
and
it's
more
like
paying
off
a
car
early?
Is
it
not
I.
I
Mean
you
are
in
a
lot
of
ways
the
question
kind
of
becomes:
what's
the
utility
to
that
asset
once
we
are
securitizing,
so
if
it's
not
operating
no
any
longer,
if
that's
the
conversation
that's
being
had
about
no
longer
operating,
it
I
think
it's
that
that
should
be
the
only
point
I
make,
but
there
is
some
discussion
about
paying
it
off
early.
Yes,
but
if
I'm
not
using
the
asset,
that's
that's
sort
of
why.
G
The
analogy,
and
then
you
know
for
my
own
example
in
my
own
utility
service
area
KU,
where
they,
you
know,
decommission
the
Big
Sandy
cold
plan.
You
know
and
there's
still
a
surcharge
on
that
bill,
and
you
know
there's
also
a
lack
or
a
problem
with
generation,
I.
Think
in
that
area
as
well
that
there's
going
to
have
to
be
some.
G
You
know
replacement
in
the
in
the
in
the
near
future.
Does
that
not
kind
of
really
stick
it
to
the
right
pair
when
you're
having
them
pay
for
the
regulatory
asset,
while
at
the
same
time
paying
for
New
Generation
I.
I
Think
that's
what
operating
the
Electric
System!
That's!
How
operating
the
Electric
System
is
going
to
work.
We've
got
to
ensure
that
we
have
assets
to
Serve
customer
needs
and
as
practical
matter
it's
you
know,
you're
retiring
it
a
little
bit
early,
that's
true
right!
So
five,
six,
seven,
eight
years
of
cost,
where
you
don't
get
to
benefit
from
the
value
of
that
asset.
It
is
something
that
can
become
problematic
but
we're
taking
the
earnings
component
out
of
it.
So
we're
reducing
the
cost
of
that
thing.
I
When
we're
when
we're
making
a
decision,
whether
we
were
put
there
because
of
federal
overreach,
which
required
investment
in
the
scrubber
which
didn't
make
economic
sense
or
not
that's
sort
of
how
we
you
know
get
to
where
we
are
it's,
it's
not
a.
It
is
not
a.
It
is
not
this
rosiest
picture
when
the
federal
government
puts
these
sort
of
constraints
on
system
that
lead
us
to
a
retirement
discussion.
That
is
not
the
optimal
goal
and
there
are
costs
that
are
in
it,
but
we're
trying
to
make
those
costs
as
small.
G
As
well
Mr
chairman,
yes,
I
mean
why
should
we,
you
know
incentivize
retirements
of,
like
you
know,
our
fossil
power
plants
that
are
very
stable
generation?
When
we've
seen
you
know
what
the
end
result
of
that
can
be
with
some
the
brown
outs
and
and
that
we
saw
last
December
which,
in
you
know,
I,
don't
think
we've
ever
seen.
G
Anything
like
that
in
Kentucky,
before
which
you
know
I
think,
is
a
direct
result
of
a
you
know,
a
a
rush
to
get
to
some
type
of
green
Utopia
that
simply
we're
not
technologically
in
a
position
to
to
get
to
just
yet
and-
and
you
know,
really,
it
places
lives
at
risk.
I
mean
you
have
people
at
home
on.
You
know
heart
monitors.
We
have
people
with
CPAP
machines.
We
have
people
with.
G
I
My
question
is:
when
you're,
when
you
made
the
point
about
incentivizing,
what
what
incentive
are
you
referencing.
G
Well,
I'm
talking
about
when
you
make
the
decision
to
you
know
essentially
allow
them
to
replace
reliable
generation
with
by
by
using
securitization,
essentially
as
a
sword
to
allow
them
to
retire
fossil
plants
early,
so
they
can
replace
it
with
less
reliable
generation
that
is
often
subsidized
by
the
federal
government.
Through
you
know,
subsidies.
G
You
know
is
that
not
placing
the
Grid
at
risk
in
some
situations
in
reliable
electric
service.
My.
I
G
One
more
Point,
Mr
chairman
I,
mean
but
isn't
the
purpose
of
the
PSC
to
ensure
the
lowest
cost
alternative
to
the
rate
payer?
Isn't
that
their
goal
to
make
sure
that
not
only
do
the
utilities
get
a
fair
recovery,
but
it's
also
the
the
best
cost
recovery
and
sometimes
what
you're
talking
about
is
I.
Think
Senator,
Smith,
chairman
Smith
stated,
is
absolutely
not
the
lowest
cost
alternative
to
the
rate
payer.
I
That
look,
it's
absolutely
true
that
the
Public
Service
Commission
is
going
to
make
a
discussion
about
how
to
do
things
at
least
cost.
That
is
is
absolutely
true,
and
we
want
them
to
do
that.
Don't
we,
of
course
we
do.
Okay,
that's
exactly
what
it's
exactly
what
we're
looking
for,
but
we
want
to
think
about
what
what
we
want
the
future
generation
in
the
Commonwealth
to
be
and
thinking
about
all
right.
Are
there
some
resources
out
there
are
there
some
incentives
that
we
should
be
utilizing
to
explore?
G
A
Are
organized
that
I'll
tell
you
what
at
this
time,
I'm
going
to
maybe
take
back
per?
Second,
that's!
Okay!
We
just
have
a
lot
of
members
that
have
questions
and
stuff.
So
since
we
do
have
a
new
member
on
board
when
we're
asking
questions,
if
you
have
to
do
a
follow-up,
always
go
through
the
chair
that
way,
we
are
in
respect.
I
A
We
get
a
line
of
a
lot
of
people
that
have
thoughts
and
we
want
to
make
sure
that
everybody
gets
the
courtesy
to
be
able
to
ask
their
questions,
and
sometimes
we
run
out
and
don't
always
get
to
do
that
so
just
to
follow
up
with
a
question
just
come
back
to
the
chair
and
we'll
always
grant
you
that
unless
we're
running
into
a
Time
issue,
which
is
what
I'm
running
into
right
now
I
have
Senator
Williams
has
a
question.
He
would
like
to
ask.
K
Thank
you,
Mr
chair,
so
I'm,
looking
at
your
150
immediately
for
this
six
year
period
versus
150
over
10
years,
which
doesn't
seem
like
that
big
of
a
deal
but
just
like
bad
federal
policy
is
ending
low-cost
power.
K
The
borrowing
cost
may
actually
increase
that
150
more
so
than
the
offset
of
just
going
from
six
to
ten
year
payback,
and
so
how
do
you
so
I'm
not
sure
that
I
actually
believe
that
it's
the
same
amount
of
money
over
10
years
as
over
six
years,
I
think
likely
where
our
borrowing
costs
are
going?
It's
going
to
be
much
higher.
I
I
I
actually
agree
with
you,
I
think
what
we'll
end
up
doing
on
these
bigger
assets,
values
when
you're
saying
250,
300
million
dollars
I
think
the
bonds
are
going
to
be
more
in
the
30-year
range.
So
when
you
stack
interest
in
it
sure
it's
going
to
cost
more
but
you're
paying
it
over
30
years
as
opposed
to
paying
it
and
as
opposed
to
paying
it
over
a
you
know.
I
I
L
C
L
L
Oh
you're,
a
policy
expert;
okay,
well,
sorry,
but
you,
your
prior
life,
was
with
with
who
Edison.
I
Do
and
who,
who
are
they
they're?
The
three
investor
in
electric
companies
who's?
Who,
who
is
who
I'm
representing.
I
Please
sure
LGE
k-u,
Kentucky,
Power
and
Duke
so.
L
You're
representing
them
here
today,
yep
okay,
as
a
policy
expert,
okay,
I,
I,
just
good
about
building
a
record
I
think
we
need
to
know
exactly
who
we're
talking
to,
but.
A
J
Thinking,
I,
don't
know
who
needs
to
answer
this
question
either
one
of
you.
It's
got
Xiao
and
hear
a
lot
about
the
commission
shall
not
do
as
the
commission
and
been
involved
in
this
in
any
way
reviewed
it
or
participated,
made
any
suggestions
or
talked
about
it
any
to
your
knowledge
either.
One
of
you.
J
It's
got:
they
shall
not
exercise
its
powers
carrying
out
its
duties
regarding
the
matter
with
the
within
the
authority,
and
it's
got
these
listed
I
mean
I,
got
a
law
degree
in
accounting
degree.
In
this
thing
it's
about
50
pages,
long
and
I
reviewed
it,
and
it's
you
got
to
have
a
brain
to
go
from
one
place
back
to
another
to
see
what's
really
happening,
then
it
goes
to
the
customer
bills.
The
electric
obtained
financing
shall
and
it's
got,
how
that's
going
to
be
designated
the
surcharges,
and
then
it
says
it
can
be
a
sign.
J
So
that
means
it's
sold
to
somebody
and
it
even
uses
the
word
about
collection
of
Fairly
utility
compiled
revisions
of
this
shall
not
invalidate
or
impair.
So
it's
got
all
these
protective
orders
in
there
and
I
don't
want
to
know
if
anybody
has
scrutinize
those
from
the
other
side
as
we
would
pay,
such
as
the
commission
or
any
agency.
That's
representing
to
help
us
as
legislators.
You
all
know
if
that
this
has
been
presented
to
anybody.
Senator.
H
Turner
in
the
process
of
better
understanding
what
was
done
during
the
interim
and
even
in
the
last
session,
because
this
isn't
necessarily
a
new
idea,
but
it
was
brought
forward
and
then
a
lot
of
work
done
in
the
interim.
But
we
know
that
there's
more
work
to
be
done
going
forward,
but
it
was
addressed
and
we
know
that
we
need
to
dig
in
deeper.
So
thank
you
for
bringing
up
those
concerns
and
we'll
continue
to
come
back
to
you
with
answers.
Please.
J
H
A
I
I
want
to
to
yield
as
much
time
as
I
can
to
because
I've
gone
through
your
presentation
and-
and
not
all
of
us
up
here
are
attorneys-
have
been
familiar
with
this
and
I
think
what
you
have
done
is
has
done
a
very
good
job
of
breaking
down
a
big
issue
and
I
think
it'd
benefit
a
lot
of
the
members
on
this
committee
that
are
not
as
familiar
with
this
that
live
this
in
and
out
as
we
do
so
I'm
going
to
try
to
yield
back
to
you
to
cover
as
much
of
it
as
you
can
until
I
run
out
of
time.
A
A
I
Great
that
we
kind
of
made
this
point
a
moment
ago,
how
does
securitization
impact
the
utilities
bottom
line,
generating
facilities,
in
particular
contracts
with
the
utility
owners
over
a
defined
number
of
years,
with
return
on
Equity
sort
of
recovered
on
an
going
forward
basis,
securitizing
the
closure
of
those
facilities
eliminates
or
reduces
that
return
on
Equity.
So
it's
it's
a
hit.
It's
a
significant
hit
to
the
owner
of
these
assets
when
when
securitization
occurs,
but
the
benefit
to
it.
I
Oh,
how
do
I
go
the
benefit
to
it
is
that
it
reduces
customer
costs.
Now
the
utility
I
think
is
in
position
where
it
is
willing
to.
I
You
know,
engage
in
conversation
about
securitization
and
foregoing
earnings
that
are
sort
of
signed
into
contract
through
regulatory,
Compact
and
adjudicatory
process
in
exchange
for
making
a
decision
about
building
new
assets,
and
so
that
is
the
thing
about
this
piece
of
legislation
that
is
more
comprehensive
than
a
lot
of
other
pieces
of
legislation,
because
it
talks
about
securitization
and
the
tool
that
can
be
utilized
to
save
customers.
Money
due
to
as
Senator
Smith
said,
regulations
that
are
coming
out
of
the
federal
government
and
are
placing
pressure
on
these
assets.
I
So
you
know,
there's
certainly
costs
that
are
associated
with
it,
but
it
reduces
the
costs
on
that
asset.
As
you
know,
once
someone
has
made
a
decision
to
March
toward
closure,
but
it's
it
is
novel
because
it
also
adds,
in
the
other
things
that
you
know,
we
should
think
about
making
investments
in
there's
the
room
to
securitize.
Storm
costs,
Etc,
so
Capital
recycling
is
the
thing
that
makes
securitization
work
for
utilities
books
because
practical
matter,
investors
look
at
it
and
they
go
okay.
You
were
supposed
to
make
this
money.
I
Over
40
years
you
were
supposed
to
make
eight
more
years
of
earnings
and
all
that
stuff
evaporated.
So
so
their
cost
of
capital
doesn't
increase,
so
it
doesn't
become
harder
and
harder
for
these
utilities
to
continue
to
make
investments.
Capital
recycling
allows
them
to
go
back
to
their
shareholders
and.
H
I
Look
yeah
we
gave
up.
There
was
a
loss
on
this
bill
due
to
Federal
Regulation
Etc.
We
use
a
securitization
tool
which
sort
of
zeroed
out
our
earnings
on
a
going
forward
basis,
but
it's
okay,
because
there's
a
new
asset.
That's
got
40
years
more
of
life
that
we're
thinking
about
now,
and
they
can
have
a
sort
of
reasonable
conversation
with
investors
about
that.
I
What
does
the
bill
do?
It
gives
the
authority
to
the
commission
to
just
in
reasonably
use
securitization
to
reduce
consumer
costs
on
assets
that
are
required,
that
retired
prior
to
the
end
of
their
amortization
schedule.
You
can
also
do
it
on
storm
costs
or
other
deferred
costs,
and
it's
extraordinary.
The
number
is
150
million
dollars.
So
so
you
know
what
you're
talking
about
storm
costs,
we're
talking
about
big
storms
or
other
sort
of
issues
like
that.
I
It
also,
as
we
said
a
little
bit
ago
and
I,
think
this
is
kind
of
the
novel
part
where
it
talks
about
investment
in
renewal,
renewable
natural
gas
infrastructure,
investment
in
nuclear
energy.
There's
this
other
component
that
sits
here
where
75
of
renewable
generation
in
Kentucky
will
be
owned
by
the
utilities.
I
The
thing
that
I
think
is
kind
of
interesting
about
that
as
a
construct
is
that
by
saying,
75
of
the
generation
is
going
to
be
owned
by
utilities
and
the
commission
sort
of
designated
what
can
be
approved
you're
in
effect
defining
what
the
amount
of
renewable
generation
can
be
within
the
state
by
only
allowing
that
25
percent
K
that
25
percent
on
the
margin
I
think
that
is
essentially
defining
what
the
renewable
story
is
going
to
be.
I
The
utilities
are
going
to
build
whatever
the
commission
tells
them
to
build,
and
then
that
remaining
25
is
sort
of
all
the
way
up.
C4,
which
is
I,
think
an
important
conversation,
as
you
think,
about
land
use
and
some
of
the
other
challenges
that
we're
seeing
in
and
around
Renewables,
and
then
there's
this
other
piece
which
expands
the
length
of
qualified
ordinary
investment
and
transmission
from
one
mile
to
10
miles
more.
I
I
This
to
me
is
the
double
bottom
line:
it's
taking
a
comprehensive
approach
and
looking
forward
as
to
what
resources
we
want
to
make
30
or
40
year,
investments
in
and
it's
a
multi-session
conversation.
This
is
you
know,
an
informational
conversation.
Here's
what
the
bill
looks
like
we're,
thinking
we're
going
to
come
back,
they're
going
to
be
a
bunch
of
stakeholder
conversations
where
the
yeas
and
the
Nays
are
going
to
get
in
the
room
and
we're
going
to
have
a
conversation
about
matching
supply
and
demand,
and
that's
really
what
this
energy
discussion's
about.
I
You
know
what
is
demand
going
to
be,
how
do
we
focus
on
sort
of
Economic
Development
to
recruit
businesses
into
the
state,
so
they're,
making
a
decision
to
choose,
Kentucky,
Over,
Texas
or
California,
or
whatever
energy
costs,
are
kind
of
a
big
part
of
that
and
I
think
having
a
stakeholder
discussion
where
we're
talking
about
what
we
want.
Our
new
resources
to
be
is
in
talking
about
supply
and
demand
is
a
very
useful
way
to
figure
out.
You
know
the
future,
where
we're
going
to
build
kind
of
the
same
point
said
said
differently.
I
Last
thing,
I'll,
say
I
guess
about
securization
is
that
you
know
these
utility
balance
sheets
can't
afford
to
do
this,
like
all
over
the
place
right
like
if
you
start.
If
these
assets
are
securitized
kind
of
all
over
the
place,
they're
going
to
go
back
to
their
investors,
investors
are
going
to
be
like
what
the
heck
you
were
in
these
contracts.
You
were
supposed
to
make
X
number
of
dollars.
That's
why
my
pension
fund
invested
in
you.
I
If
there's
all
this
securitization
sort
of
blood
on
that
balance
sheet,
it
is
going
to
be
very
difficult
for
them
to
raise
Capital
going
forward.
So
it
is
not
in
the
utilities,
best
interest
or
really
the
state's
best
interest
to
be
applying
this
all
over
the
place.
It
is
in
the
best
interest
to
apply
it
very
narrowly
in
instances
where
there's
exorbitant
costs-
and
we
frankly
don't
want
to
see
these
big
bills
sitting
on
customers
sitting
on
customers
bills
for
assets
that
they
can
no
longer
utilize.
I
I
mean
that
that's
kind
of
the
the
double
bottom
one-
it's
not
a
Panacea
it
is,
it
can
be
problematic
for
the
utility.
But
if
we
go
out
and
pick
a
couple
of
places
where
we
really
want
to
lessen
the
burden
for
customers
because
we're
talking
about
exorbitant
costs-
and
we
can
think
about
what
we
want-
that
energy
future
investment
to
look
like
it
can
be
a
useful
tool.
But
it's
you
know
it's
not
going
to
solve
every
problem.
It's
not
a
Panacea
by
any
means.
A
Very
good
Brad.
Thank
you
at
this
time.
I'm
going
to
let
Tom
Fitzgerald
Tommy
want
to
go
ahead
and
come
up
to
the
the
table
there
and
we'll
go
ahead,
and
let
you
have
your
comments
and
save
some
time.
I
have
a
couple
of
members
that
also
have
questions
as
well.
Thank.
E
You
Mr
chairman
Mr
chairman.
K
E
Formerly,
director
of
the
Kentucky
Resources
Council,
now
I
am
of
council
and
heading
towards
retirement.
Eventually,
I
appreciate
Senator
funky
frogmar
bringing
the
bill.
It
was
a
good
finally
meet
her.
This
morning,
I
mentioned
to
her
one
of
my
earliest
issues.
Working
as
a
essentially
a
legal
aid
attorney
with
KRC
was
trying
to
stop
the
Collinsville
Dam
up
in
Pendleton
County,
which
would
have
flooded
some
Farmland
I
had
some
farmers
who
were
not
thrilled
about
the
idea
of
being
underwater
and
so
Pendleton
county
is
near
and
dear
to
my
heart.
E
Mr
chairman
members
of
the
committee
I
appreciate
this
opportunity
to
share
our
serious
concerns
about
other
aspects
of
this
bill
properly
structured,
and
we
have
lots
of
states
that
we
can
look
to
and
lots
of
best
practices
we
can
look
to.
Securitization
of
debt
is
a
way
of
lowering
the
cost
of
that
debt
to
rate
payers
and
can
be
a
benefit
to
your
point.
E
Market
I
want
to
talk
to
you
about
the
other
issues,
though,
because
whenever
we
approach
these
issues,
as
many
of
you
know,
KRC
and
I
am
particularly
sensitive
to
getting
it
right
when
we
change
the
signals
to
the
utilities
and
change
the
signals
to
the
commission,
because
we
literally
cannot
afford
to
get
it
wrong.
I
work
and
have
worked
for
43
years
now
at
the
intersection
of
poverty
and
pollution,
and
we
are
being
the
fourth
poorest
state
in
the
nation
per
capita.
E
In
my
43
years
of
practicing
law,
I
have
never
come
across
a
raid
payer
who
wants
less
Public,
Service
Commission
scrutiny
to
your
question,
Senator
Turner,
or
wants
less
scrutiny
or
accountability
of
the
utilities
that
provide
the
essential
Services.
Yet
this
bill
would
do
just
that,
and
that
is
why
I
have
grave
concerns
regarding
the
bill.
It
would
allow
significant
expenditures
of
significant
capital
projects
with
little
or
no
PSE
scrutiny.
E
It
undercuts
utility
regulation,
principles
of
demonstrating
need
and
the
absence
of
wasteful
duplication
for
Capital
Investments,
which
are
the
Hallmarks
of
a
certificate
for
public
convenience
and
necessity.
It
eliminates
the
principles
of
reasonable
lease
cost
planning
for
a
nuclear
and
non-traditional
gas
projects
and
instead
turns
rate
payers
into
the
financial
lending
institutions,
assuming
the
costs
and
the
financial
risks
of
nuclear
and
other
non-traditional
energy
projects
which
may
never
come
to
fruition.
In
the
interest
of
time,
Mr
chairman
I'm
not
going
to
go
into
great
detail.
E
I
will
provide
the
written
comments
to
the
members
of
the
committee
and
I
look
forward
to
this
conversation
moving
forward,
but
I
wanted
to
to
just
make
clear
some
of
the
concerns.
Starting.
This
conversation
regarding
the
the
the
securitization
process,
the
one
concern
I
did
have
in
what
is
drafted-
is
that
its
subjects,
the
advisors
to
the
Public,
Service
Commission
to
Discovery
and
cross-examination,
and
that
to
me
is
very
unprecedented.
It
is
similar
to
asking
a
judge
to
make
their
law
clerk
available
for
cross-examination
and
deposition
and
I.
E
Think
it's
not
inappropriate
and
is
a
somewhat
intrusive
suggestion
regarding
section
21
of
the
bill,
it
allows
all
reasonable
expenses
incurred
by
a
utility
for
obtaining
a
permit
from
the
nuclear
Regulatory
Commission
for
a
nuclear
power
plant.
Our
principle
has
always
been
you
recover
only
what
is
used
and
useful
and
the
cost
recovery
is
based
on
an
asset
that
is
put
into
use
for
the
rate
payers.
This
would
allow
cost
recovery
without
consideration
of
least
cost
principles
for
preliminary
steps
in
a
process
for
a
plant
that
may
never
be
constructed.
E
That
is
a
dramatic
change
from
the
least
cost
planning
and
I.
Don't
think
it's
appropriate
to
ask
rate
payers
to
be
the
ones
to
assume
the
financial
risk
of
a
nuclear
project
not
going
forward
section
23
is
of
concern
because
it
says
that
the
utilities
shall
own
75
percent
of
the
renewable
capacity
in
the
state.
That,
to
me,
is
an
amazing
overreach.
E
They
can
own
100
of
what
they
build,
but
for
to
suggest
that
they
get
to
there's
somehow
a
75
policy
that
other
people,
whether
they
be
Merchant
solar
plants
such
as
their
address
with
house
before,
and
hopefully
the
Senate
changes
in
it
or
it
be
plants
that
are
operating
as
qualified
facilities
under
purpa,
and
we
have
several
of
those
that
are
operating
in
the
state.
E
The
utilities
have
no
right
to
control
access
to
the
Sun
and
given
their
hostility
to
net
metering
into
rooftop,
solar
I
think
the
idea
that
they
should
have
a
stake
in
75
percent
ownership
of
any
solar
that
is
built
by
anybody
in
Kentucky
is
asking
a
little
bit
much
section.
23
is
of
concern
because
it
moves
away
from
the
idea
that
any
any
capital
investment
in
construction
other
than
in
the
ordinary
course
of
business
requires
PSC
approval
to
make
sure
it's
needed.
It's
not
wasteful
and
it's
least
cost.
E
Finally,
the
the
lengthening
tenfold
the
length
of
new
transmission
line
over
138
KV
that
would
require
PSC
approval
is
of
great
concern
for
those
who
who
are
in
rural
areas
where
the
co-ops
are
doing
new
transmission
lines.
They
actively
engage
the
public
from
day
one
in
these
in
this
construction
because
they
know
in
some
cases
they
can
be
controversial.
The
reason
that
the
cpcn
requirement
is
in
place
now
for
these
lines
in
the
first
place
was
because
LG
e
wanted
it
some
years
ago.
E
Apparently,
mines
have
changed
their
their
opinion
on
whether
they
want
the
the
commission
to
review
these,
but
I
think
the
rate
payers
have
an
expectation
that
any
significant
Capital
Construction,
including
138
KV
lines
that
are
not
in
the
usual
course
of
service,
are
going
to
have
scrutiny
and
before
they're
required
to
pay
the
the
tab
for
them
that
they
will
have
some
assurance
that
the
commission
has
vetted
it,
that
it
is
the
least
cost
alternative
and
that
it's
not
wasteful
duplication
of
existing
lines
that
are
out
there
so
happy
to
answer
any
questions.
E
A
You
and
we
do-
we
have
a
couple
quick
questions.
Guys
we've
got
about
six
minutes
to
wrap
up
Senator
Williams,
quick.
K
Question
on
securitization,
so
one
of
the
hesitant
agencies
that
a
utility
has
for
putting
250
to
350
million
into
a
coal
plant
to
extend
its
life
by
adding
scrubbers
is
the
risk
they
may
warrant
that
the
feds
are
going
to
shut
them
down
before
the
useful
life.
Could
they
in
fact
use
securitization
so
that
they
could
securitize
that
over
a
long
term
and
mitigate
the
risk
of
short
shutting
it
down,
so
that
we
could
get
scrubbers
and
extend
the
life
of
these
coal-fired
power
plants
using
securitization.
I
I
Because
you're
not
gonna
pay
for
that
you're
not
going
to
pay
for
them.
I
mean
the
problem
ends
up
being
in
a
lot
of
ways
what
the
investment
is
for
the
scrubber
on
top
of
the
asset
with
its
remaining
useful
life.
So
the
problem
ends
up
being
right.
If
I'm
going
to
run
300
million
dollars
a
cost
over
eight
years,
it's
going
to
have
a
big
customer
hit,
and
so
could
you
do
that
and
then
could
you
securitize
it
once
the
thing
was
shut
down?
I
L
L
I
believe
in
diversification,
but
it
in
a
balanced
energy
policy
that
includes
Renewables
and
I
feel
a
little
validated
as
a
psychic,
because
for
the
last
several
decades
I've
said
we
wouldn't
have
that
renewable
policy
until
the
utility
companies
owned
it,
so
I
I
feel
a
little
validated
there
and
I
think.
As
a
former
utilizer,
you
know
someone
who
has
utilized
solar
in
the
past
and
hopes
to
in
the
future.
That
particularly
concerns
me
so
I
think
these
issues
will
be
brought
forward
and
also
Mr.
L
Chairman
I,
think
you
know
the
Attorney
General's
consumer
protection
division
has
always
been
very
valuable
in
in
formulating
policy
as
well.
So
at
some
point
we
might
want
to
bring
them
into
the
conversation.
Thank
you.