Kentucky Statutes 278.021 – Receivership for abandoned utility — Criteria for finding of abandonment — Consolidation of actions — Powers and duties of receiver — Temporary receivership — Commission’s discretion to approve or decline to approve …
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(1) If the commission, after notice and hearing, enters an order in which it finds that a utility is abandoned, the commission may bring an action in the Franklin Circuit Court for an order attaching the assets of the utility and placing those assets under the sole control and responsibility of a receiver.
(2) For purposes of this section, a utility shall be considered abandoned if it:
(a) Disclaims, renounces, relinquishes, or surrenders all property interests or all rights to utility property, real or personal, necessary to provide service;
(b) Notifies the commission of its intent to abandon the operation of the facilities used to provide service;
(c) Fails to comply with an order of the commission in which the commission determined that the utility is not rendering adequate service, specified the actions necessary for the utility to render adequate service, and fixed a reasonable time for the utility to perform such actions, and the failure of the utility to comply with the order presents a serious and imminent threat to the health or safety of a significant portion of its customers; or
(d) Fails to meet its financial obligations to its suppliers and is unable or unwilling to take necessary actions to correct the failure after receiving reasonable notice from the commission, and the failure poses an imminent threat to the continued availability of gas, water, electric, or sewer utility service to its customers.
(3) Within twenty (20) days after commencing an action in Franklin Circuit Court, the commission shall file a certified copy of the record of the administrative proceeding in which the commission entered its finding of abandonment.
(4) Any action brought pursuant to KRS § 278.410 for review of an order of the commission containing a finding that a utility is abandoned shall be consolidated with any action brought pursuant to subsection (1) of this section and based upon the same order.
(5) Any receiver appointed by the court shall file a bond in an amount fixed by the court. The receiver shall operate the utility to preserve its assets, to restore or maintain a reasonable level of service, and to serve the best interests of its customers.
(6) During the pendency of any receivership, the receiver may bring or defend any cause of action on behalf of the utility and generally perform acts on behalf of the utility as the court may authorize.
(7) The receiver shall control and manage the assets and operations of the utility until the Franklin Circuit Court, after reasonable notice and hearing, orders the receiver to return control of those assets to the utility or to liquidate those assets as provided by law.
(8) (a) Notwithstanding subsection (1) of this section, the commission may petition the Franklin Circuit Court to appoint temporarily a receiver to operate and manage the assets of an abandoned utility. After notice to the utility and a hearing, the court may grant a petition, upon terms and
conditions as it deems appropriate, upon a showing by a preponderance of the evidence:
1. That a utility has been abandoned;
2. That the abandonment is an immediate threat to the public health, safety, or the continued availability of service to the utility’s customers; and
3. That the delay required for the commission to conduct a hearing would place the public health, safety, or continued utility service at unnecessary risk.
(b) Sixty (60) days after its entry, the order of temporary receivership shall terminate and control and responsibility for the assets and operations of the utility shall revert to the utility without further action of the court unless the commission brings an action under subsection (1) of this section.
(9) Nothing contained in this section shall be construed as requiring the commission to approve an application made pursuant to KRS § 278.020(6) for authority to abandon a utility or other assets of a utility or to cease the provision of utility service.
Effective:April 8, 2016
History: Amended 2016 Ky. Acts ch. 50, sec. 2, effective April 8, 2016. — Amended
2011 Ky. Acts ch. 7, sec. 1, effective June 8, 2011. — Created 1994 Ky. Acts ch.
145, sec. 1, effective July 15, 1994.
(2) For purposes of this section, a utility shall be considered abandoned if it:
Terms Used In Kentucky Statutes 278.021
- Action: includes all proceedings in any court of this state. See Kentucky Statutes 446.010
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
(a) Disclaims, renounces, relinquishes, or surrenders all property interests or all rights to utility property, real or personal, necessary to provide service;
(b) Notifies the commission of its intent to abandon the operation of the facilities used to provide service;
(c) Fails to comply with an order of the commission in which the commission determined that the utility is not rendering adequate service, specified the actions necessary for the utility to render adequate service, and fixed a reasonable time for the utility to perform such actions, and the failure of the utility to comply with the order presents a serious and imminent threat to the health or safety of a significant portion of its customers; or
(d) Fails to meet its financial obligations to its suppliers and is unable or unwilling to take necessary actions to correct the failure after receiving reasonable notice from the commission, and the failure poses an imminent threat to the continued availability of gas, water, electric, or sewer utility service to its customers.
(3) Within twenty (20) days after commencing an action in Franklin Circuit Court, the commission shall file a certified copy of the record of the administrative proceeding in which the commission entered its finding of abandonment.
(4) Any action brought pursuant to KRS § 278.410 for review of an order of the commission containing a finding that a utility is abandoned shall be consolidated with any action brought pursuant to subsection (1) of this section and based upon the same order.
(5) Any receiver appointed by the court shall file a bond in an amount fixed by the court. The receiver shall operate the utility to preserve its assets, to restore or maintain a reasonable level of service, and to serve the best interests of its customers.
(6) During the pendency of any receivership, the receiver may bring or defend any cause of action on behalf of the utility and generally perform acts on behalf of the utility as the court may authorize.
(7) The receiver shall control and manage the assets and operations of the utility until the Franklin Circuit Court, after reasonable notice and hearing, orders the receiver to return control of those assets to the utility or to liquidate those assets as provided by law.
(8) (a) Notwithstanding subsection (1) of this section, the commission may petition the Franklin Circuit Court to appoint temporarily a receiver to operate and manage the assets of an abandoned utility. After notice to the utility and a hearing, the court may grant a petition, upon terms and
conditions as it deems appropriate, upon a showing by a preponderance of the evidence:
1. That a utility has been abandoned;
2. That the abandonment is an immediate threat to the public health, safety, or the continued availability of service to the utility’s customers; and
3. That the delay required for the commission to conduct a hearing would place the public health, safety, or continued utility service at unnecessary risk.
(b) Sixty (60) days after its entry, the order of temporary receivership shall terminate and control and responsibility for the assets and operations of the utility shall revert to the utility without further action of the court unless the commission brings an action under subsection (1) of this section.
(9) Nothing contained in this section shall be construed as requiring the commission to approve an application made pursuant to KRS § 278.020(6) for authority to abandon a utility or other assets of a utility or to cease the provision of utility service.
Effective:April 8, 2016
History: Amended 2016 Ky. Acts ch. 50, sec. 2, effective April 8, 2016. — Amended
2011 Ky. Acts ch. 7, sec. 1, effective June 8, 2011. — Created 1994 Ky. Acts ch.
145, sec. 1, effective July 15, 1994.