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AN ACT relating to merchant electric generating facilities. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
Section 1. KRS 278.702 is amended to read as follows: 3
(1) There is hereby established the Kentucky State Board on Electric Generation and 4
Transmission Siting. The board shall be composed of seven (7) members as 5
follows: 6
(a) The three (3) members of the Kentucky Public Service Commission; 7
(b) The secretary of the Energy and Environment Cabinet or the secretary's 8
designee; 9
(c) The secretary of the Cabinet for Economic Development or the secretary's 10
designee; 11
(d) 1. If the facility subject to board approval is proposed to be located in one 12
(1) county, two (2) ad hoc public members to be appointed by the 13
Governor from a county where a facility subject to board approval is 14
proposed to be located: 15
a. One (1) of the ad hoc public members shall be the chairman of the 16
planning commission with jurisdiction over an area in which a 17
facility subject to board approval is proposed to be located. If the 18
proposed location is not within a jurisdiction with a planning 19
commission, then the Governor shall appoint either the county 20
judge/executive of a county that contains the proposed location of 21
the facility or the mayor of a city, if the facility is proposed to be 22
within a city; and 23
b. One (1) of the ad hoc public members shall be appointed by the 24
Governor and shall be a resident of the county in which the facility 25
is proposed to be located. 26
2. If the facility subject to board approval is proposed to be located in more 27 UNOFFICIAL COPY 22 RS HB 392/GA
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than one (1) county, two (2) ad hoc public members to be chosen as 1
follows: 2
a. One (1) ad hoc public member shall be the county judge/executive 3
of a county in which the facility is proposed to be located, to be 4
chosen by majority vote of the county judge/executives of the 5
counties in which the facility is proposed to be located; and 6
b. One (1) ad hoc public member shall be a resident of a county in 7
which the facility is proposed to be located, and shall be appointed 8
by the Governor. 9
If a member has not been chosen by majority vote, as provided in 10
subdivision a. of this subparagraph, by thirty (30) days after the filing of 11
the application, the Governor shall directly appoint the member. 12
3. Ad hoc public members appointed to the board shall have no direct 13
financial interest in the facility proposed to be constructed. 14
(2) The term of service for the ad hoc members of the board shall continue until the 15
merchant electric generating facility[board issues a final determination in the 16
proceeding] for which they were appointed has been constructed and begins 17
generating electricity for sale. The remaining members of the board shall be 18
permanent members. 19
(3) The board shall be attached to the Public Service Commission for administrative 20
purposes. The commission staff shall serve as permanent administrative staff for the 21
board. The members of the board identified in subsection (1)(a) to (d) of this section 22
shall promulgate administrative regulations in accordance with KRS Chapter 13A to 23
implement KRS 278.700 to 278.716. 24
(4) No member of the board shall receive any salary or fee for service on the board or 25
shall have any financial interest in any facility the application for which comes 26
before the board, but each member shall be reimbursed for actual travel and 27 UNOFFICIAL COPY 22 RS HB 392/GA
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expenses directly related to service on the board. 1
(5) The chairman of the Public Service Commission shall be the chairman of the board. 2
The chairman shall designate one (1) member of the board as vice chairman. A 3
majority of the members of the board shall constitute a quorum for the transaction 4
of business. No vacancy on the board shall impair the right of the remaining 5
members to exercise all of the powers of the board. The board shall convene upon 6
the call of the chairman. 7
Section 2. KRS 278.704 is amended to read as follows: 8
(1) No person shall commence to construct a merchant electric generating facility until 9
that person has applied for and obtained a construction certificate for the facility 10
from the board. The construction certificate shall be valid for a period of two (2) 11
years after the issuance date of the last permit required to be obtained from the 12
Energy and Environment Cabinet after which the certificate shall be void. The 13
certificate shall be conditioned upon the applicant obtaining necessary air, water, 14
and waste permits. If an applicant has not obtained all necessary permits and has not 15
commenced to construct prior to the expiration date of the certificate, the applicant 16
shall be required to obtain a valid certificate from the board. 17
(2) Except as provided in subsections (3), (4), and (5) of this section, no construction 18
certificate shall be issued to construct a merchant electric generating facility unless 19
the exhaust stack of the proposed facility and any wind turbine is at least one 20
thousand (1,000) feet from the property boundary of any adjoining property owner 21
and all proposed structures or facilities used for generation of electricity are two 22
thousand (2,000) feet from any residential neighborhood, school, hospital, or 23
nursing home facility. For purposes of applications for site compatibility certificates 24
pursuant to KRS 278.216, only the exhaust stack of the proposed facility to be 25
actually used for coal or gas-fired generation or, beginning with applications for site 26
compatibility certificates filed on or after January 1, 2015, the proposed structure or 27 UNOFFICIAL COPY 22 RS HB 392/GA
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facility to be actually used for solar or wind generation shall be required to be at 1
least one thousand (1,000) feet from the property boundary of any adjoining 2
property owner and two thousand (2,000) feet from any residential neighborhood, 3
school, hospital, or nursing home facility. 4
(3) If the merchant electric generating facility is proposed to be located in a county or a 5
municipality with planning and zoning, then decommissioning and setback 6
requirements from a property boundary, residential neighborhood, school, hospital, 7
or nursing home facility may be established by the planning and zoning 8
commission. Any decommissioning requirement or setback established by a 9
planning and zoning commission for a facility in an area over which it has 10
jurisdiction shall: 11
(a) Have primacy over the decommissioning requirements in subsection (2)(m) 12
of Section 3 of this Act and the setback requirement in subsections (2) and (5) 13
of this section; and 14
(b) Not be subject to modification or waiver by the board through a request for 15
deviation by the applicant, as provided in subsection (4) of this section or 16
otherwise. 17
(4) The board may grant a deviation from the requirements of subsection (2) of this 18
section on a finding that the proposed facility is designed to and, as located, would 19
meet the goals of KRS 224.10-280, 278.010, 278.212, 278.214, 278.216, 278.218, 20
and 278.700 to 278.716 at a distance closer than those provided in subsection (2) of 21
this section. 22
(5) If the merchant electric generating facility is proposed to be located on a site of a 23
former coal processing plant in the Commonwealth where the electric generating 24
facility will utilize on-site waste coal as a fuel source, then the one thousand (1,000) 25
foot property boundary requirement in subsection (2) of this section shall not be 26
applicable; however, the applicant shall be required to meet any other setback 27 UNOFFICIAL COPY 22 RS HB 392/GA
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requirements contained in subsection (2) of this section. 1
(6) If requested, a merchant electric generating entity considering construction of a 2
facility for the generation of electricity or a person acting on behalf of such an entity 3
shall hold a public meeting in any county where acquisition of real estate or any 4
interest in real estate is being considered for the facility. A request for such a 5
meeting may be made by the commission, or by any city or county governmental 6
entity, including a board of commissioners, planning and zoning, fiscal court, 7
mayor, or county judge/executive. The meeting shall be held not more than thirty 8
(30) days from the date of the request. 9
(7) The purpose of the meeting under subsection (6) of this section is to fully inform 10
landowners and other interested parties of the full extent of the project being 11
considered, including the project time line. One (1) or more representatives of the 12
entity with full knowledge of all aspects of the project shall be present and shall 13
answer questions from the public. 14
(8) Notice of the time, subject, and location of the meeting under subsection (6) of this 15
section shall be posted in both a local newspaper, if any, and a newspaper of general 16
circulation in the county. Notice shall also be placed on the Web sites of the 17
unregulated entity, and any local governmental unit. Owners of real estate known to 18
be included in the project and any person whose property adjoins at any point any 19
property to be included in the project shall be notified personally by mail. All 20
notices must be mailed or posted at least two (2) weeks prior to the meeting. 21
(9) The merchant electric generating entity or a person acting on behalf of a merchant 22
electric generating entity shall, on or before the date of the public meeting held 23
under subsection (6) of this section, provide notice of all research, testing, or any 24
other activities being planned or considered to: 25
(a) The Energy and Environment Cabinet; 26
(b) The Public Service Commission; 27 UNOFFICIAL COPY 22 RS HB 392/GA
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(c) The Transportation Cabinet; 1
(d) The Attorney General; and 2
(e) The Office of the Governor. 3
(10) [A person that, on or before April 10, 2014, has started acquiring interests in real 4
estate for a project as described in subsection (6) of this section shall hold a meeting 5
that complies with this section within thirty (30) days of April 10, 2014. 6
(11)] Subsections (6) to (9)[(10)] of this section shall not apply to any facility or project 7
that has already received a certificate of construction from the board. 8
Section 3. KRS 278.706 is amended to read as follows: 9
(1) Any person seeking to obtain a construction certificate from the board to construct a 10
merchant electric generating facility shall file an application at the office of the 11
Public Service Commission. 12
(2) A completed application shall include the following: 13
(a) The name, address, and telephone number of the person proposing to 14
construct and own the merchant electric generating facility; 15
(b) A full description of the proposed site, including a map showing the distance 16
of the proposed site from residential neighborhoods, the nearest residential 17
structures, schools, and public and private parks that are located within a two 18
(2) mile radius of the proposed facility; 19
(c) Evidence of public notice that shall include the location of the proposed site 20
and a general description of the project, state that the proposed construction is 21
subject to approval by the board, and provide the telephone number and 22
address of the Public Service Commission. Public notice shall be given within 23
thirty (30) days immediately preceding the application filing to: 24
1. Landowners whose property borders the proposed site; and 25
2. The general public in a newspaper of general circulation in the county or 26
municipality in which the facility is proposed to be located; 27 UNOFFICIAL COPY 22 RS HB 392/GA
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(d) A statement certifying that the proposed plant will be in compliance with all 1
local ordinances and regulations concerning noise control and with any local 2
planning and zoning ordinances. The statement shall also disclose setback 3
requirements established by the planning and zoning commission as provided 4
under KRS 278.704(3); 5
(e) If the facility is not proposed to be located on a site of a former coal 6
processing plant and the facility will use on-site waste coal as a fuel source or 7
in an area where a planning and zoning commission has established a setback 8
requirement pursuant to KRS 278.704(3), a statement that the exhaust stack of 9
the proposed facility and any wind turbine is at least one thousand (1,000) feet 10
from the property boundary of any adjoining property owner and all proposed 11
structures or facilities used for generation of electricity are two thousand 12
(2,000) feet from any residential neighborhood, school, hospital, or nursing 13
home facility, unless facilities capable of generating ten megawatts (10MW) 14
or more currently exist on the site. If the facility is proposed to be located on a 15
site of a former coal processing plant and the facility will use on-site waste 16
coal as a fuel source, a statement that the proposed site is compatible with the 17
setback requirements provided under KRS 278.704(5). If the facility is 18
proposed to be located in a jurisdiction that has established setback 19
requirements pursuant to KRS 278.704(3), a statement that the proposed site 20
is in compliance with those established setback requirements; 21
(f) A complete report of the applicant's public involvement program activities 22
undertaken prior to the filing of the application, including: 23
1. The scheduling and conducting of a public meeting in the county or 24
counties in which the proposed facility will be constructed at least ninety 25
(90) days prior to the filing of an application, for the purpose of 26
informing the public of the project being considered and receiving 27 UNOFFICIAL COPY 22 RS HB 392/GA
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comment on it; 1
2. Evidence that notice of the time, subject, and location of the meeting 2
was published in the newspaper of general circulation in the county, and 3
that individual notice was mailed to all owners of property adjoining the 4
proposed project at least two (2) weeks prior to the meeting; and 5
3. Any use of media coverage, direct mailing, fliers, newsletters, additional 6
public meetings, establishment of a community advisory group, and any 7
other efforts to obtain local involvement in the siting process; 8
(g) A summary of the efforts made by the applicant to locate the proposed facility 9
on a site where existing electric generating facilities are located; 10
(h) Proof of service of a copy of the application upon the chief executive officer 11
of each county and municipal corporation in which the proposed facility is to 12
be located, and upon the chief officer of each public agency charged with the 13
duty of planning land use in the jurisdiction in which the facility is proposed 14
to be located; 15
(i) An analysis of the proposed facility's projected effect on the electricity 16
transmission system in Kentucky; 17
(j) An analysis of the proposed facility's economic impact on the affected region 18
and the state; 19
(k) A detailed listing of all violations by it, or any person with an ownership 20
interest, of federal or state environmental laws, rules, or administrative 21
regulations, whether judicial or administrative, where violations have resulted 22
in criminal convictions or civil or administrative fines exceeding five 23
thousand dollars ($5,000). The status of any pending action, whether judicial 24
or administrative, shall also be submitted;[ and] 25
(l) A site assessment report as specified in KRS 278.708. The applicant may 26
submit and the board may accept documentation of compliance with the 27 UNOFFICIAL COPY 22 RS HB 392/GA
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National Environmental Policy Act (NEPA) rather than a site assessment 1
report; and 2
(m) A decommissioning plan that shall describe how the merchant electric 3
generating facility will be decommissioned and dismantled following the 4
end of its useful life. The decommissioning plan shall, at a minimum, 5
include plans to: 6
1. Remove all above-ground facilities and any underground components 7
and foundations of above-ground facilities to a depth of three (3) feet 8
below the surface grade of the land in or on which the component was 9
installed; 10
2. Return the land to a substantially similar state as it was prior to the 11
commencement of construction; 12
3. Leave any interconnection or other facilities in place for future use at 13
the completion of the decommissioning process; 14
4. Secure a bond or other similar security to assure financial 15
performance of the decommissioning obligation, provided that: 16
a. The amount of the bond or similar security shall be determined 17
by an independent, professional engineer who is experienced in 18
the decommissioning of electric generating facilities and has no 19
financial interest in either the merchant electric generating 20
facility or any parcel of land upon which the merchant electric 21
generating facility is located. The amount of the bond or similar 22
security shall be either: 23
i. The net present value of the total estimated cost of 24
completing the decommissioning plan, less the current net 25
salvage value of the merchant electric generating facility's 26
components; or 27 UNOFFICIAL COPY 22 RS HB 392/GA
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ii. In an amount required by a county or municipal 1
government that has established a decommissioning bond 2
or similar security obligation in the county or municipality 3
where the merchant electric generating facility will be 4
located; 5
b. The bond or other similar security names the landowner from 6
whom the applicant leases land as the primary beneficiary; and 7
c. If the merchant electric generating facility is to be located in a 8
county or municipality that has not established a 9
decommissioning bond or other similar security obligation, the 10
bond or other similar security shall name the county or 11
municipality as a secondary beneficiary with the county's or 12
municipality's consent; 13
5. Communicate with the affected landowner at the end of the merchant 14
electric generating facility's useful life so that any requests of the 15
landowner that are in addition to the minimum requirements set forth 16
in this paragraph may, in the sole discretion of the applicant or its 17
successor or assign, be accommodated; and 18
6. Incorporate the requirements of paragraph (m)1. to 5. of this 19
subsection into the applicant's leases with landowners. 20
(3) Application fees for a construction certificate shall be set by the board and 21
deposited into a trust and agency account to the credit of the commission. 22
(4) Replacement of a merchant electric generating facility with a like facility, or the 23
repair, modification, retrofitting, enhancement, or reconfiguration of a merchant 24
electric generating facility shall not, for the purposes of this section and KRS 25
224.10-280, 278.704, 278.708, 278.710, and 278.712, constitute construction of a 26
merchant electric generating facility. 27 UNOFFICIAL COPY 22 RS HB 392/GA
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(5) The board shall promulgate administrative regulations prescribing fees to pay 1
expenses associated with its review of applications filed with it pursuant to KRS 2
278.700 to 278.716. All application fees collected by the board shall be deposited in 3
a trust and agency account to the credit of the Public Service Commission. If a 4
majority of the members of the board find that an applicant's initial fees are 5
insufficient to pay the board's expenses associated with the application, including 6
the board's expenses associated with legal review thereof, the board shall assess a 7
supplemental application fee to cover the additional expenses. An applicant's failure 8
to pay a fee assessed pursuant to this subsection shall be grounds for denial of the 9
application. 10
Section 4. KRS 278.710 is amended to read as follows: 11
(1) Within one hundred twenty (120) days of receipt of an administratively complete 12
application, or within one hundred eighty (180) days of receipt of an 13
administratively complete application if a hearing is requested, the board shall, by 14
majority vote, grant or deny a construction certificate, either in whole or in part, 15
based upon the following criteria: 16
(a) Impact of the facility on scenic surroundings, property values, the pattern and 17
type of development of adjacent property, and surrounding roads; 18
(b) Anticipated noise levels expected as a result of construction and operation of 19
the proposed facility; 20
(c) The economic impact of the facility upon the affected region and the state; 21
(d) Whether the facility is proposed for a site upon which existing generating 22
facilities, capable of generating ten megawatts (10MW) or more of electricity, 23
are currently located; 24
(e) Whether the proposed facility will meet all local planning and zoning 25
requirements that existed on the date the application was filed; 26
(f) Whether the additional load imposed upon the electricity transmission system 27 UNOFFICIAL COPY 22 RS HB 392/GA
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by use of the merchant electric generating facility will adversely affect the 1
reliability of service for retail customers of electric utilities regulated by the 2
Public Service Commission; 3
(g) Except where the facility is subject to a statewide setback established by a 4
planning and zoning commission as provided in KRS 278.704(3) and except 5
for a facility proposed to be located on a site of a former coal processing plant 6
and the facility will use on-site waste coal as a fuel source, whether the 7
exhaust stack of the proposed merchant electric generating facility and any 8
wind turbine is at least one thousand (1,000) feet from the property boundary 9
of any adjoining property owner and all proposed structures or facilities used 10
for generation of electricity are two thousand (2,000) feet from any residential 11
neighborhood, school, hospital, or nursing home facility, unless a different 12
setback has been requested and approved under KRS 278.704(4). If a planning 13
and zoning commission has established setback requirements that differ from 14
those under KRS 278.704(2), the applicant shall provide evidence of 15
compliance. If the facility is proposed to be located on site of a former coal 16
processing plant and the facility will use on-site waste coal as a fuel source, 17
the applicant shall provide evidence of compliance with the setback 18
requirements provided in KRS 278.704(5); 19
(h) The efficacy of any proposed measures to mitigate adverse impacts that are 20
identified pursuant to paragraph (a), (b), (e), or (f) of this subsection from the 21
construction or operation of the proposed facility;[ and] 22
(i) Whether the applicant has a good environmental compliance history; and 23
(j) Whether the decommissioning plan complies with the requirements of 24
subsection (2)(m) of Section 3 of this Act. 25
(2) When considering an application for a construction certificate for a merchant 26
electric generating facility, the board may consider the policy of the General 27 UNOFFICIAL COPY 22 RS HB 392/GA
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Assembly to encourage the use of coal as a principal fuel for electricity generation 1
as set forth in KRS 152.210, provided that any facility, regardless of fuel choice, 2
shall comply fully with KRS 224.10-280, 278.212, 278.216, and 278.700 to 3
278.716. 4
(3) A person that has received a construction certificate for a merchant electric 5
generating facility shall: 6
(a) File with the board the copy of the bond or other similar security that, 7
pursuant to subsection (2)(m)4. of Section 3 of this Act, is required by a 8
county or a municipal government or as part of a decommissioning plan, no 9
later than the date upon which the construction of the merchant generating 10
facility commences, and refile an updated copy at least once every five (5) 11
years thereafter; 12
(b) Not transfer rights and obligation under the certificate without having first 13
applied for and received a board determination that: 14
1.[(a)] The acquirer has a good environmental compliance history; and 15
2.[(b)] The acquirer has the financial, technical, and managerial capacity 16
to meet the obligations imposed by the terms of the approval or has the 17
ability to contract to meet these obligations; 18
(c) File with the board a notice of the date that construction is complete and the 19
merchant electric generating facility begins producing electricity for sale; 20
and 21
(d) Following the date the merchant electric generating facility begins 22
producing electricity for sale, file a notice of any transaction involving the 23
transfer or sale of ownership, control, or the right to control the merchant 24
electric generating facility, with lessors of property where the merchant 25
electric generating facility is located, the board, the county judge/executive 26
of a county and, if applicable, the mayor of a municipality in which the 27 UNOFFICIAL COPY 22 RS HB 392/GA
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merchant electric generating facility is located, within five (5) days of 1
completing the transaction. The notice shall include the name, street 2
address, telephone number, and e-mail address of the person acquiring 3
ownership, control, or the right to control the merchant electric generating 4
facility. 5
(4) A person that has acquired a merchant electric generating facility from the 6
applicant or its successor or assign shall file with the board within ten (10) days 7
of completing the acquisition: 8
(a) A written consent to assume the obligations set forth in the 9
decommissioning plan as of the date the acquisition occurred; and 10
(b) A notice of adoption of an existing bond or other similar security previously 11
filed pursuant to subsection 3(a) of this section or a replacement bond or 12
other similar security that complies with subsection (2)(m)4. of Section 3 of 13
this Act. An existing bond or other similar security shall be adopted, or a 14
replacement bond or other similar security shall be in place, as of the date 15
the acquisition occurs so that there is no lapse in coverage of the 16
decommissioning bond or other similar security. A person making a filing 17
pursuant to this subsection shall file an updated bond or other similar 18
security that complies with subsection (2)(m)4. of Section 3 of this Act at 19
least once every five (5) years. 20
Section 5. KRS 278.718 is amended to read as follows: 21
The provisions of KRS 278.700, 278.704, 278.706, 278.708, and 278.710 shall[ be in 22
addition to, and shall] not supplant, any other state or federal law, including the powers 23
available to local governments under the provisions of home rule under KRS 67.080, 24
67.083, 67.850, 67.922, 67A.060, 67C.101, and 82.082. An ordinance, permit, or license 25
issued by a local government shall have primacy over the provisions and requirements 26
of KRS 278.700 and Sections 2, 3, and 4 of this Act, and any conflict between an order 27 UNOFFICIAL COPY 22 RS HB 392/GA
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of the board and a local ordinance, permit, or license shall be resolved in favor of the 1
local government's ordinance, permit, or license. 2