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Bill 431

Indicates Matter Stricken
Indicates New Matter

Indicates Matter Stricken

Indicates New Matter

COMMITTEE REPORT

April 4, 2007

S. 431

Introduced by Senators McConnell, Moore, Drummond, Setzler, Matthews, Thomas, O'Dell, Gregory, Jackson, Mescher, Rankin, Alexander, Anderson, Grooms, Scott, Williams, Cromer, Vaughn, Ritchie, Verdin, Ford, Cleary, Patterson and Hayes

S. Printed 4/4/07--S.

Read the first time February 13, 2007.

To whom was referred a Bill (S. 431) to amend Chapter 33 of Title 58, Code of Laws of South Carolina, 1976, by adding Article 4 so as to enhance the certainty of investments in the infrastructure of electric utilities, etc., respectfully

That they have duly and carefully considered the same and recommend that the same do pass with amendment:

Amend the bill, as and if amended, by striking the bill in its entirety and inserting the following:

TO PROTECT SOUTH CAROLINA RATEPAYERS BY ENHANCING THE CERTAINTY OF INVESTMENTS IN THE INFRASTRUCTURE OF ELECTRIC UTILITIES SERVING CONSUMERS IN THIS STATE AND THE RECOVERY OF FUEL COSTS; TO AMEND CHAPTER 33 OF TITLE 58, CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING ARTICLE 4 RELATING TO ELECTRICAL UTILITY FACILITY SITING AND ENVIRONMENTAL PROTECTION SO AS TO REVISE PROCEDURES FOR APPROVING COSTS ASSOCIATED WITH THE ADDITION OF BASE LOAD GENERATION PLANTS AND TO PROTECT SOUTH CAROLINA RATEPAYERS BY ENHANCING THE CERTAINTY OF INVESTMENTS IN THE INFRASTRUCTURE OF ELECTRIC UTILITIES IN THIS STATE; TO AMEND SECTION 58-27-610, RELATING TO DEFINITIONS IN REGARD TO SERVICE RIGHTS OF ELECTIVE SUPPLIERS, SO AS TO ADD A DEFINITION OF "CORRIDOR RIGHTS"; TO AMEND SECTION 58-27-620, RELATING TO SERVICE RIGHTS OF AND RESTRICTIONS ON ELECTRIC SUPPLIERS, SO AS TO FURTHER PROVIDE FOR THESE RIGHTS AND RESTRICTIONS AND A REVISION OF CERTAIN TERRITORIAL ASSIGNMENTS; TO AMEND SECTION 58-27-660, RELATING TO THE FURNISHING OF ELECTRIC SERVICE IN AREAS SERVED BY ANOTHER SUPPLIER, SO AS TO FURTHER PROVIDE FOR THE CIRCUMSTANCES UNDER WHICH THE PUBLIC SERVICE COMMISSION MAY ORDER AN ELECTRIC SUPPLIER TO FURNISH ELECTRIC SERVICE; TO AMEND SECTION 58-27-865, RELATING TO FUEL COSTS FOR PRODUCING ELECTRIC POWER AND THE RECOVERY OF THESE COSTS, SO AS TO INCLUDE IN THE DEFINITION OF "FUEL COST" CERTAIN ENVIRONMENTAL COSTS AND EMISSIONS ALLOWANCE COSTS INCURRED IN THE PRODUCTION OF ELECTRIC POWER AND TO ALLOW THE PUBLIC SERVICE COMMISSION BY ORDER TO ALLOW ADDITIONAL ENVIRONMENTAL COSTS TO BE INCLUDED IN THE DEFINITION; TO AMEND SECTION 58-27-870, RELATING TO HEARINGS ON PROPOSED RATES FOR ELECTRICAL UTILITIES, SO AS TO PROVIDE ADDITIONAL TIME IN WHICH THE COMMISSION MUST ISSUE AN ORDER UPON ITS FAILURE TO ISSUE AN ORDER; AND TO AMEND SECTION 58-27-1210, RELATING TO EXTENSION OF ELECTRIC FACILITIES, SO AS TO PROVIDE FOR SPECIFIED CIRCUMSTANCES WHEN AN ELECTRIC SUPPLIER MUST OBTAIN PUBLIC SERVICE COMMISSION APPROVAL FOR CONSTRUCTION OF ELECTRIC FACILITIES.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION    1.    (A)    The purpose of Article 4 of Chapter 33 of Title 58, added by Section 2 of this act, is to provide for the recovery of the prudently incurred costs associated with new base load plants, as defined in Section 58-33-220 of Article 4, when constructed by investor-owned electrical utilities, while at the same time protecting customers of investor-owned electrical utilities from responsibility for imprudent financial obligations or costs.

(B)    In addition, the General Assembly has determined that it is in the public interest to promote predictability in the determination of which electric supplier has the right to provide service in a given area or location. While the Territorial Assignments Act of 1969 has been largely successful in promoting predictability, there are certain issues which have generated controversy with respect to the service rights of electric suppliers. Sections 3 through 7 and Section 9 of this act are intended to address those situations. In particular, Section 9 of this act is intended to specify those situations in which electric suppliers must obtain commission approval for construction of facilities and is intended to supersede Regulation 103-304, South Carolina Code of Regulations, to the extent it would require approval in any other situation.

(C)    With respect to Section 8 of this act, the General Assembly makes the following findings:

(1)    by Act 138 of 1983, codified at Section 58-27-865 of the 1976 Code, the General Assembly provided a means for electric utilities to make routine, annual adjustments in the amount of fuel cost recovered from customers;

(2)    Section 58-27-865 has furthered the public interest by allowing the recovery of variable and incremental power supply costs on an accurate, timely, and efficient basis;

(3)    by Act 348 of 1996, the General Assembly amended Section 58-27-865 to include in annual adjustments the costs of SO2 emissions allowances that utilities are required to consume in generating electricity; and

(4)    certain electric utilities are now being required to further limit the SO2 emissions from their generating plants and also limit their emissions of NOX or acquire and consume emissions allowances, and proposals are being made to require electric utilities to limit certain other emissions.

SECTION    2.    Chapter 33, Title 58 of the 1976 Code is amended by adding:

Section 58-33-210.    This article is known, and may be cited, as the 'Base Load Review Act' and is applicable to utilities as defined in Section 58-33-220 of this article.

Section 58-33-220.    The following terms, when used in this article, shall have the following meanings, unless another meaning is clearly apparent from the context:

(1)    'AFUDC' means the allowance for funds used during construction of a plant calculated according to regulatory accounting principles.

(2)    'Base load plant' or 'plant' means a new coal or nuclear fueled electrical generating unit or units or facility that is designed to be operated at a capacity factor exceeding seventy percent annually, has a gross initial generation capacity of three hundred fifty megawatts or more, and is intended in whole or in part to serve retail customers of a utility in South Carolina.

(3)    'Base load review application' or 'application' means an application for a base load review order under the terms of this article.

(4)    'Base load review order' means an order issued by the commission pursuant to Section 58-33-270 establishing that if a plant is constructed in accordance with an approved construction schedule, approved capital costs estimates, and approved projections of in-service expenses, as defined herein, the plant is considered to be used and useful for utility purposes such that its capital costs are prudent utility costs and are properly included in rates.

(5)    'Capital costs' or 'plant capital costs' means costs associated with the design, siting, selection, acquisition, licensing, construction, testing, and placing into service of a base load plant, and capital costs incurred to expand or upgrade the transmission grid in order to connect the plant to the transmission grid and includes costs that may be properly considered capital costs associated with a plant under generally accepted principles of regulatory or financial accounting, and specifically includes AFUDC associated with a plant and capital costs associated with facilities or investments for the transportation, delivery, storage, and handling of fuel.

(6)    'Combined application' means a base load review application which is combined with an application for a certificate under the Utility Facility Siting and Environmental Protection Act, or which involves a plant located outside of the State of South Carolina, and at the utility's option may be combined with an application for new electric rates under Section 58-27-860.

(7)    'Combined proceeding' means a proceeding to consider all aspects of a combined application.

(8)    'Construction work in progress' means capital costs as defined above associated with a base load plant which have been incurred but have not been included in the utility's plant-in-service.

(9)    'General rate proceeding' means a proceeding under Section 58-27-810 and other applicable provisions for the establishment of new electric rates and charges, and where orders in general rate proceedings are referenced in this article, these orders include rate orders issued in proceedings or combined proceedings under this article.

(10)    'In-service expenses' means reasonably projected expenses recognized under generally accepted principles of regulatory and financial accounting as a result of a plant commencing commercial operation, including: (a) expenses associated with operating and maintaining a plant, as well as taxes and governmental charges applicable to the plant including taxes other than income taxes; (b) depreciation and amortization expenses related to the plant; (c) revenue requirements related to the utility's cost of capital applied to the investment in supplies, inventories and working capital associated with the plant; and (d) other costs determined by the commission to be appropriate for rate making purposes. In-service expenses include, but are not limited to, labor, supplies, insurance, general and administrative expenses, and the cost of outside services, but do not include costs recovered as fuel costs pursuant to Section 58-27-865.

(11)    'Person' means any individual, group, firm, partnership, or corporation.

(12)    'Pre-construction costs' means all costs associated with a potential nuclear plant incurred before issuance of a final certificate under the Utility Facility Siting and Environmental Protection Act, including, without limitation, the costs of evaluation, design, engineering, environmental and geotechnical analysis and permitting, contracting, other required permitting including early site permitting and combined operating license permitting, and initial site preparation costs and related consulting and professional costs, and shall include AFUDC associated with those costs. For potential nuclear plants located in other states, the costs must be those incurred before issuance of a certificate by the host state under statutes comparable to the Utility Facility Siting and Environmental Protection Act.

(13)    'Proceeding' means the proceeding to consider an application filed under this chapter.

(14)    'Project development application' means an application for a project development order.

(15)    'Project development order' means an order establishing the prudence of a utility's decision to incur pre-construction costs associated with a nuclear plant or potential nuclear plant.

(16)    'Return on equity' means the return on common equity established in the base load review order for a plant. But, if the order in the utility's most recent general rate proceeding was issued no more than five years before the date of filing of the application or combined application, or if such an order is issued after the application, combined application or base load review order related to the plant is filed, then at the utility's option, the rate of return on common equity established in that order shall be the rate of return used for computing future rate revisions under this article. A project-specific return on equity set hereunder shall apply exclusively to the establishment of the weighted average cost of capital under this article and shall not be used for reporting or any other purpose.

(17)    'Revised rates' means a revised schedule of electric rates and charges reflecting a change to the utility's then -current non-fuel rates and charges to add incremental revenue requirements related to a base load plant as authorized in this article. For a plant under construction, until it enters commercial operation the rate adjustments related to the plant shall include recovery of the weighted average cost of capital applied to the outstanding balance of capital costs of that plant only and shall not include depreciation or other items constituting a return of capital to the utility.

(18)    'Revised rates order' means an order issued by the commission approving, modifying, or denying the utility's request to charge revised rates under this article, which revised rates order an aggrieved party may contest in an adversarial hearing before the commission.

(19)    'Revised rates proceedings' means all proceedings to consider an application for revised rates or review of a revised rates order.

(20)    'Utility' means a person owning or operating equipment or facilities for generating, transmitting, or delivering electricity to South Carolina retail customers for compensation but it shall not include electric cooperatives, municipalities, the South Carolina Public Service Authority, or a person furnishing electricity only to himself, itself, its residents, employees, or tenants when the electricity is not resold or used by others.

(21)    'Utility Facility Siting and Environmental Protection Act' means Section 58-33-10 and other applicable provisions of this chapter.

(22)    'Weighted average cost of capital' or 'cost of capital' means the utility's average cost of debt and equity capital:

(a)    incorporating the return on equity;

(b)    incorporating the utility's current weighted average cost of debt;

(c)    weighting (a) and (b) according to the utility's capital structure for ratemaking purposes, as established in the order in the utility's last general rate proceeding, updated to reflect the utility's current levels of debt and equity capital; and

(d)    adjusting the result for the effect of income taxes.

Section 58-33-225.    (A)    The provisions of this section apply to the pre-construction costs of a nuclear-powered facility.

(B)    At any time before the filing of an application or a combined application under this act related to a specific plant, a utility may file a project development application with the commission and the office of regulatory staff.

(C)    In a project development application, the utility shall:

(1)    describe the plant being considered and shall designate:

(a)    the anticipated generation capacity (or range of capacity) of the plant; and

(b)    the projected annual capacity factors or range of factors of the plant;

(2)    provide information establishing the need for the generation capacity represented by the potential plant and the need for generation assets with the indicative annual capacity factors of the potential plant;

(3)    provide information establishing the reasonableness and prudence of the potential fuel sources and potential generation types that the utility is considering for the plant; and

(4)    provide such other information as may be required to establish that the decision to incur pre-construction costs related to the potential nuclear plant is prudent considering the information known to the utility at the time and considering the other alternatives available to the utility for supplying its generation needs.

(D)    The commission shall issue a project development order affirming the prudency of the utility's decision to incur pre-construction costs for the nuclear plant specified in the application if the utility demonstrates by a preponderance of evidence that the decision to incur pre-construction costs for the plant is prudent. In issuing its project development order, the commission may not rule on the prudency or recoverability of specific items of cost, but shall rule instead on the prudency of the decision to incur pre-construction costs for the nuclear plant described in Section 58-33-225(C)(1).

(E)    Unless the record in a subsequent proceeding shows that individual items of cost were imprudently incurred, or that other decisions subsequent to the issuance of a project development order were imprudently made considering the information available to the utility at the time they were made, then all the pre-construction costs incurred for the potential nuclear plant must be properly included in the utility's plant-in-service and must be recoverable fully through rates in future proceedings under this chapter.

(F)    To the extent that a party in a general rate proceeding or revised rates proceeding establishes the imprudence of specific items of cost or of specific decisions made subsequent to the issuance of a project development order as set forth in Section 58-33-225(E), then the commission may disallow the resulting costs but only to the extent that a prudent utility would have avoided those costs considering the information available to the utility at the time when they were incurred or the decisions at issue were made.

(G)    If the utility decides to abandon the project after issuance of a prudency determination under this section, then the pre-construction costs related to that project may be deferred, with AFUDC being calculated on the balance, and may be included in rates in the utility's next general rate proceeding or revised rates proceeding, provided that as to the decision to abandon the plant, the utility shall bear the burden of proving by a preponderance of the evidence that the decision was prudent. Without in any way limiting the effect of Section 58-33-225(D), recovery of capital costs and the utility's cost of capital associated with them may be disallowed only to the extent that the failure by the utility to anticipate or avoid the allegedly imprudent costs, or to minimize the magnitude of the costs, was imprudent considering the information available at the time that the utility could have acted to avoid or minimize the costs. Pending an order in the general rate proceeding or revised rates proceeding, the utility, at its discretion, may commence to amortize to cost of service the balance of the pre-construction costs related to the abandoned project over a period equal to the period during which the costs were incurred, or five years, whichever is greater.

(H)    Prudency determinations under Section 58-33-225(D) may not be challenged or reopened in any subsequent proceeding including proceedings under Section 58-27-810 and other applicable provisions and Section 58-33-220 and other applicable provisions of this article.

(I)    At any time after an initial project development order has been issued, a utility may file an amended project development application seeking a determination of the prudency of the utility's decision to continue to incur pre-construction costs considering changed circumstances or changes in the type or location of nuclear plant that the utility is pursuing or considering other characteristics or decisions related to the plant. The amended project development application must be considered in a separate docket; however, the testimony and other evidence of the prior docket must be considered to be part of the new docket.

(J)    Pursuant to Section 58-33-240, the commission shall enter an order granting or denying a project development order or amended project development order within six months of the filing of the application. If the commission fails to issue an order within the period prescribed in this section, a party may move that the commission issue an order granting or denying the application. If the commission fails to issue an order within ten days after the motion is served, the application will be considered granted.

Section 58-33-230.    (A)    Any utility proposing to construct a plant, individually or jointly with other parties, may elect to come under the terms of this article by filing an application or combined application with the commission, and by serving a copy of that application or combined application on the Office of Regulatory Staff.

(B)    If the plant is to be located in South Carolina and no application for a certificate under the Utility Facility Siting and Environmental Protection Act has previously been granted or is then pending, the utility shall file a combined application under this article.

(C)    If the plant is to be located outside South Carolina but will serve retail customers in this State, the utility shall file a combined application, but as to the Utility Facility Siting and Environmental Protection Act, the combined application shall address only the requirements of Section 58-33-160(1)(a), 58-33-160(1)(d), and 58-33-160(1)(f), and information pertaining to the environmental impacts of the plant may not be included in the combined application. In issuing the resulting order as to the Utility Facility Siting and Environmental Protection Act, the commission shall make the determinations required under Sections 58-33-160(1)(a), 58-33-160(1)(d), and 58-33-160(1)(f) only.

(D)    For plants located outside South Carolina that will serve retail customers in this State, the issuance of a certificate for the plant by the host state after a review of issues comparable to those considered under Sections 58-33-160(1)(a), 58-33-160(1)(d), and 58-33-160(1)(f) of the Utility Facility Siting and Environmental Protection Act shall create a rebuttable presumption that the requirements of those sections are satisfied.

(E)    An application or combined application may be combined with a general rate proceeding application at the utility's option.

(F)    The Office of Regulatory Staff shall safeguard the public interest in all matters arising under this article. It shall have full audit rights related to all matters arising under this article and shall review the reasonableness and necessity of all costs to be recovered under this article.

Section 58-33-240.    (A)    Except as otherwise specified in this article, all procedural requirements that apply to general rate proceedings by law or regulation shall apply to proceedings and combined proceedings, to revised rates proceedings, and to the judicial review of orders issued under this article. The requirements related to the form and content of applications in general rate proceedings, however, only shall apply to proceedings or combined proceedings which include an application for new electric rates under Section 58-27-860 and only shall apply to that part of the application or combined application which is filed under Section 58-27-860.

(B)    As to combined proceedings, the procedural requirements related to general rate proceedings shall control over any inconsistent provisions in other statutes; provided however, that provisions of Section 58-33-140 of the Utility Facility Siting and Environmental Protection Act related to parties and appearances shall apply to proceedings involving facilities located in this State to the extent parties seek to appear to raise issues arising under that act.

(C)    In proceedings to review revised rates orders, no further notice to the public, customers, and others is required additional to that provided upon filing of the proceeding or combined proceeding. In proceedings to review revised rates orders, the utility's revised rates filing shall serve as the application and the utility must be considered to be the applicant.

(D)    In proceedings and combined proceedings, the utility shall have the burden of proving that the decision to build the plant was prudent, and shall have the burden of proof as to all matters on which the commission is required to enter findings under Sections 58-33-270(A), (B), (C), (D) and (E). Without in any way limiting the conclusive effect of determinations under Section 58-33-225 and Section 58-33-275, in cases where this statute allows a party to challenge the prudency of any transaction, cost or decision of the utility, that party shall be required to make a prima facie case establishing imprudence, and thereafter the burden of proof shall shift to the utility to demonstrate the prudence of the transaction cost, or decision by a preponderance of the evidence.

(E)    In proceedings and combined proceedings, the deadlines contained in Section 58-27-870(B) and (C) shall be nine months.

Section 58-33-250.    The application for a base load review order under this article shall include:

(1)    information showing the anticipated construction schedule for the plant;

(2)    information showing the anticipated components of capital costs and the anticipated schedule for incurring them;

(3)    information showing the projected effect of investment in the plant on the utility's overall revenue requirement for each year during the construction period;

(4)    information identifying:

(a)    the specific type of units selected for the plant;

(b)    the suppliers of the major components of the plant; and

(c)    the basis for selecting the type of units, major components, and suppliers;

(5)    information detailing the qualification and selection of principal contractors and suppliers, other than those listed in item (4)(c) above, for construction of the plant;

(6)    information showing the anticipated in-service expenses associated with the plant for the twelve months following commencement of commercial operation adjusted to normalize any atypical or abnormal expense levels anticipated during that period;

(7)    information required by Section 58-33-270(B)(5);

(8)    information identifying risk factors related to the construction and operation of the plant;

(9)    information identifying the proposed rate design and class allocation factors to be used in formulating revised rates;

(10)    information identifying the return on equity proposed by the utility pursuant to Section 58-33-210(16); and

(11)    the revised rates, if any are requested, that the utility intends to put in place after issuance of the resulting base load review order.

Section 58-33-260.    (A)    A combined application must contain:

(1)    an introduction;

(2)    material required by law or regulation to be contained in an application filed under the Utility Facility Siting and Environmental Protection Act, except that combined applications associated with plants located outside South Carolina shall address only Sections 58-33-160(1)(a), 58-33-160(1)(d), and 58-33-160(1)(f) and information pertaining to the environmental impacts of the plant may not be included in the combined application;

(3)    the material required by law or regulation to be contained in an application under this article, including the material required under Section 58-33-250;

(4)    if combined with a general rate proceeding, the material required to be filed by law or regulation in applications for the establishment of new rates under Section 58-27-860; and

(5)    if the plant is located outside South Carolina, a copy of the order from the host state granting a certificate or other authorization similar to that granted under the Utility Facility Siting and Environmental Protection Act.

(B)    Where the same information is required in different sections of the combined application, it may be set forth once and cross-referenced as appropriate.

Section 58-33-270.    (A)    After the hearing, the commission shall issue a base load review order approving rate recovery for plant capital costs if it determines:

(1)    that the utility's decision to proceed with construction of the plant is prudent and reasonable considering the information available to the utility at the time;

(2)    for plants located in this State, that the utility has satisfied the requirements of Section 58-33-160 of the Utility Facility Siting and Environmental Protection Act, either in a past proceeding or in the current proceeding if the current proceeding is a combined proceeding; and

(3)    for plants located outside South Carolina, that the utility has satisfied the requirements of Sections 58-33-160(1)(a), 58-33-160(1)(d), and 58-33-160(1)(f) of the Utility Facility Siting and Environmental Protection Act.

(B)    The base load review order shall establish:

(1)    the anticipated construction schedule for the plant including contingencies;

(2)    the anticipated components of capital costs and the anticipated schedule for incurring them, including specified contingencies;

(3)    the return on equity established in conformity with Section 58-33-210(16);

(4)    the choice of the specific type of unit or units and major components of the plant;

(5)    the qualification and selection of principal contractors and suppliers for construction of the plant; and

(6)    the inflation indices used by the utility for costs of plant construction, covering major cost components or groups of related cost components. Each utility shall provide its own indices, including: the source of the data for each index, if the source is external to the company, or the methodology for each index which is compiled from internal utility data, the method of computation of inflation from each index, a calculated overall weighted index for capital costs, and a five-year history of each index on an annual basis.

(C)    If revised rates are requested, the base load review order shall specify initial revised rates reflecting the utility's current investment in the plant which must be determined using the standards set forth in Section 58-33-280(B) and implemented according to Section 58-33-280(D).

(D)    The base load review order shall establish the rate design and class allocation factors to be used in calculating revised rates related to the plant. In establishing revised rates, all factors, allocations and rate designs shall be as determined in the utility's last rate order, except that the additional revenue requirement to be collected through revised rates shall be allocated among customer classes based on the utility's South Carolina peak demand data from the prior year.

(E)    As circumstances warrant, the utility may petition the commission, with notice to the Office of Regulatory Staff, for an order modifying any of the schedules, estimates, findings, class allocation factors, rate designs, or conditions that form part of any base load review order issued under this section. The commission shall grant the relief requested if, after a hearing, the commission finds:

(1)    as to the changes in the schedules, estimates, findings, or conditions, that the evidence of record justifies a finding that the changes are not the result of imprudence on the part of the utility; and

(2)    as to the changes in the class allocation factors or rate designs, that the evidence of record indicates the proposed class allocation factors or rate designs are just and reasonable.

(F)    The commission shall consider a request under Section 58-33-270(E) in a new docket which pursuant to Section 58-33-240 must be subject to the requirement that the relief requested in this article is considered granted if not denied by order within six months of the date of filing. If the commission fails to issue an order within the period prescribed in this section, a party may move that the commission issue an order granting or denying the application. If the commission fails to issue an order within ten days after the motion is served, the application will be considered granted.

(G)    The commission promptly shall schedule a hearing to consider any settlement agreement entered into between the Office of Regulatory Staff, as the party representing the public interest in the proceedings, and the utility applicant, provided that all parties shall have been given a reasonable opportunity to conduct discovery in the docket by the time the hearing is held. The commission may accept the settlement agreement as disposing of the matter, and issue an order adopting its terms, if it determines that the terms of the settlement agreement comport with the terms of this act.

Section 58-33-275.    (A)    A base load review order shall constitute a final and binding determination that a plant is used and useful for utility purposes, and that its capital costs are prudent utility costs and expenses and are properly included in rates so long as the plant is constructed or is being constructed within the parameters of:

(1)    the approved construction schedule including contingencies; and

(2)    the approved capital costs estimates including specified contingencies.

(B)    Determinations under Section 58-33-275(A) may not be challenged or reopened in any subsequent proceeding, including proceedings under Section 58-27-810 and other applicable provisions and Section 58-33-280 and other applicable provisions of this article.

(C)    So long as the plant is constructed or being constructed in accordance with the approved schedules, estimates, and projections set forth in Sections 58-33-270(B)(1) and 58-33-270(B)(2), as adjusted by the inflation indices set forth in Section 58-33-270(B)(5), the utility must be allowed to recover its capital costs related to the plant through revised rate filings or general rate proceedings.

(D)    Changes in fuel costs will not be considered in conducting any evaluation under this section.

(E)    In cases where a party proves by a preponderance of the evidence that there has been a material and adverse deviation from the approved schedules, estimates, and projections set forth in Sections 58-33-270(B)(1) and 58-33-270(B)(2), as adjusted by the inflation indices set forth in Section 58-33-270(B)(5), the commission may disallow the additional capital costs that result from the deviation, but only to the extent that the failure by the utility to anticipate or avoid the deviation, or to minimize the resulting expense, was imprudent considering the information available at the time that the utility could have acted to avoid the deviation or minimize its effect.

(F)    In no event may the commission or any court enjoin or stay construction of a plant once a certificate authorizing its construction has been issued under the Utility Facility Siting and Environmental Protection Act.

Section 58-33-277.    (A)    After issuance of a base load review order approving rate recovery for capital costs related to the plant, the utility will file reports with the Office of Regulatory Staff quarterly until the plant begins commercial operation. These reports must be filed no later than forty-five days after the close of a quarter, shall not be combined with any other filing, and shall contain the following information:

(1)    the progress of construction of the plant;

(2)    updated construction schedules;

(3)    schedules of the capital costs incurred including updates to the information required by Section 58-33-270(B)(5);

(4)    updated schedules of the anticipated capital costs; and

(5)    other information as the Office of Regulatory Staff may require.

(B)    The Office of Regulatory Staff shall conduct on-going monitoring of the construction of the plant and expenditure of capital through review and audit of the quarterly reports under this article, and shall have the right to inspect the books and records regarding the plant and the physical progress of construction upon reasonable notice to the utility.

Section 58-33-280.    (A)    No earlier than one year after filing the application or combined application, and no more frequently than annually thereafter, the utility may file with the commission and serve on the Office of Regulatory Staff requests for the approval of revised rates subsequent to those approved in the base load review order.

(B)    A utility must be allowed to recover through revised rates its weighted average cost of capital applied to all or, at the utility's option, part of the outstanding balance of construction work in progress, calculated as of a date specified in the filing. Any construction work in progress not included in any specific filing for revised rates shall continue to earn AFUDC and may be included in rates through future filings. The revised rates filing shall include the most recent monitoring report filed under Section 58-33-277(A) updated to reflect information current as of the date specified in the filing.

(C)    Written comments to the commission and the Office of Regulatory Staff concerning the revised rates and the information supporting them shall be allowed within one month of the revised rates filing.

(D)    The Office of Regulatory Staff shall review and audit the revised rates and the information supporting them to determine their compliance with the terms of this article. No later than two months after the date of the revised rates filing, the Office of Regulatory Staff shall serve on the commission and all intervenors and parties of record a report indicating the results of its review and audit and proposing any changes to the revised rates or the information supporting them that the Office of Regulatory Staff determines to be necessary to comply with the terms of this article.

(E)    Written comments related to the report may be filed with the commission within one month from the date of the filing of the report. Comments must be served on the Office of Regulatory Staff and simultaneously mailed or electronically transmitted to the utility and to all intervenors and parties of record who previously appeared and filed comments. The Office of Regulatory Staff may revise its report considering comments filed.

(F)    No later than four months after the date of the revised rates filing, the commission shall issue a revised rates order granting, modifying or denying revised rates as filed by the utility. In the absence of such a revised rates order, the revised rates shall be considered to be approved as filed. If the commission fails to issue an order within the period prescribed in this section, a party may move that the commission issue an order granting or denying the application. If the commission fails to issue an order within ten days after the motion is served, the application will be considered granted.

(G)    Where both Office of Regulatory Staff and the utility agree in writing on the revised rates to be implemented, the commission shall give substantial weight to the agreement in issuing its revised rates order.

(H)    If the utility is granted a rate increase in the revised rates order, the utility shall provide notice to its customers with the next billing. The utility may implement revised rates for bills rendered on or after a date selected by the utility, which may not be sooner than thirty days after revised rates are approved.

(I)    Upon implementation of revised rates under this article, the utility will cease to accrue AFUDC on that component of its construction work in progress on which it is recovering its weighted average cost of capital through revised rates.

(J)    Other provisions of this article notwithstanding:

(1)    The utility may file a final set of revised rates for a plant to go into effect upon commercial operation of the plant, the filing to be made no sooner than seven months before the projected date that the plant is to commence commercial operations. In the final revised rates the utility may include recovery of the weighted average cost of capital applied to all or part of the capital costs associated with the plant. In all cases, the decision to seek recovery in revised rates of less than the full amount of its cost must be at the utility's sole discretion. Rate adjustments to reflect the revenue requirements related to in-service expenses must be included in the final revised rates and shall be based on the utility's most current budget estimates of those expenses for the succeeding twelve-month period at the time the final revised rates are filed or actual expenses if available.

(2)    If the commission rejects a revised rate filing on grounds that may be corrected in a subsequent filing, or if the utility withdraws a revised rate filing before a revised rates order is issued, the utility may file a subsequent request for revised rates at any time thereafter.

(3)    The utility may seek to recover any capital costs, in-service expenses, or other costs not included in revised rates through future general rate proceedings.

(4)    Revised rates shall not be allowed under Section 58-33-270(C) or under Section 58-33-280 for coal plants located in South Carolina that were certificated for construction under the Utility Facility Siting and Environmental Protection Act before December 31, 2007, or for coal plants located outside of South Carolina if certificated under a state statute analogous to the Utility Facility Siting and Environmental Protection Act before December 31, 2007.

(K)    Where a plant is abandoned after a base load review order approving rate recovery has been issued, the capital costs and AFUDC related to the plant shall nonetheless be recoverable under this article provided that the utility shall bear the burden of proving by a preponderance of the evidence that the decision to abandon construction of the plant was prudent. Without limiting the effect of Section 58-33-275(A), recovery of capital costs and the utility's cost of capital associated with them may be disallowed only to the extent that the failure by the utility to anticipate or avoid the allegedly imprudent costs, or to minimize the magnitude of the costs, was imprudent considering the information available at the time that the utility could have acted to avoid or minimize the costs. The commission shall order the amortization and recovery through rates of the investment in the abandoned plant as part of an order adjusting rates under this article.

(L)    After completion of a plant that is subject to a base load review order, the utility must file an application for new electric rates under Section 58-27-860. The filing must be based on a twelve-month test period ending no later than December thirty-first of the calendar year following the year in which the plant entered commercial operation and must be filed within four months of the end of the test period.

Section 58-33-285.    (A)    Within thirty days of the issuance of a revised rates order pursuant to Section 58-33-280(E) of this article, or within thirty days of the failure by the commission to issue a revised rates order as required pursuant to Section 58-33-280(E), any aggrieved party may petition the commission for review of the revised rates order or of the failure to issue a revised rates order.

(B)    The Office of Regulatory Staff and the utility must be automatic parties to any proceedings under this section.

(C)    In filing for intervention under this section, intervenors shall identify with particularity the specific issues they intend to raise with regard to the revised rates order.

(D)    The party seeking review of the revised rates order shall serve a copy of such petition on the Office of Regulatory Staff and the utility on the same day and by the same means as it is provided to the commission.

(E)    Any filing under this section must be considered a new proceeding subject to the provisions of Section 58-33-240. The commission shall open a single new docket for all filings related to any one set of revised rates filed under this article.

Section 58-33-287.    (A)    The commission shall issue its order ruling upon a petition for review of a revised rates order within six months. If the petition for review has been resolved among the parties by settlement agreement, the commission shall consider and accept or reject any settlement agreement entered into by the parties within forty-five days. If a settlement agreement is reached between some but not all parties, then the settlement agreement, if approved by the commission, must be deemed to dispose of any issues resolved in it that have not been raised by other parties to the proceeding pursuant to Section 58-33-285(C).

(B)    Proceedings pursuant to Section 58-33-285 are limited to issues related to whether the revised rates filed by the utility comply with the terms of the commission order issued pursuant to Section 58-33-270 and with the specific requirements of Section 58-33-280. Matters determined in orders issued pursuant to the Utility Facility Siting and Environmental Protection Act, Section 58-27-810, and other applicable provisions or Section 58-33-270 are not subject to review in proceedings under this section.

(C)    In proceedings pursuant to Section 58-33-285, the commission shall allow limited discovery, and restrict the issues for discovery and hearing to whether the revised rates comply with the terms of the commission order issued pursuant to Section 58-33-270 and compliance with the specific requirements of Section 58-33-280.

(D)    The commission shall issue such motions to strike, protective orders, motions to quash, motions for costs and sanctions, and other rulings as are necessary to enforce the terms of this limitation.

(E)    The commission shall dismiss as a party any intervenor who, after notice, fails to abide by the limitations contained in this section.

(F)    The failure of the commission to enforce the terms of this section may be remedied by petition for writ of mandamus or supersedeas in the circuit court, which petition the court shall advance over all other matters on its docket and hear on an emergency basis, without the requirement of a formal answer or other return, such hearing to be held as soon as practicable upon twenty-four hours notice to the party against whom relief is sought. Proceedings related to the petitions may not serve to stay or delay proceedings before the commission.

(G)    The commission shall issue a final order that:

(1)    sets forth any changes that are required to the rates approved in the revised rates order;

(2)    determines the amount of any overcollection or undercollection of the revenues by the utility that resulted from application of the rates authorized in the revised rates order as compared to the rates authorized in the final order issued under this section; and

(3)    establishes a credit to refund the amount of an overcollection or a surcharge to collect the amount of an undercollection of revenues that arose during the time that the rates approved in the revised rates order, or imposed due to a failure of the commission to issue a revised rates order, were applicable and requires the utility to apply the credit or surcharge until such time as the overcollection or undercollection is exhausted.

(H)    If the final order increases the amount of capital costs for which the utility may recover its weighted average cost of capital through revised rates, the AFUDC booked on those capital costs between the issuance of the revised rates order and the final order shall remain on the books of the utility and shall not be reversed or adjusted. Surcharges related to undercollection of costs must be calculated without consideration of AFUDC amounts recognized on the capital costs during this period.

(I)    If the final order reduces the amount of capital cost for which the utility may recover its weighted average cost of capital through revised rates for reasons other than the conclusive finding that the capital costs were imprudently incurred, then the utility may resume accrual of AFUDC on any capital costs that were not included in rate recovery and may book an amount of AFUDC equal to the AFUDC not recognized during the time the rates approved in the revised rates order were in effect.

Section 58-33-290.    The denial of a project development application, application, or combined application under this article shall not preclude the utility from filing a new or amended project development application, application, or combined application at any time. A utility may proceed to construct a plant even if assurance of prudency or cost recovery under this article is not sought or is denied, and the failure to seek or obtain such an assurance may not be used as evidence or precedent in any future proceeding.

Section 58-33-295.    (A)    The Office of Regulatory Staff is authorized to create additional positions for purposes of performing its duties under this article as follows:

(1)    two additional positions when there is one nuclear unit that is subject to an application for a project development order, an application or a combined application under this article, or that is under construction or abandonment and eligible for entry of future revised rates orders; and

(2)    one additional position for each additional nuclear unit thereafter.

The utility or utilities electing to file an application, project development order, or combined application under this article shall bear the costs associated with these positions, including all salaries, benefits, expenses, and charges, in proportion to the number of these units that they own in whole or in part as a percentage of the total number of these units in the regulatory process under this article at the time. The Office of Regulatory Staff annually must certify to the Department of Revenue by May first the amounts to be assessed. By July first of each year, the Department of Revenue shall assess each utility for its assessment, which assessment must be due and payable by July fifteenth. The assessments must be charged against a utility by the Department of Revenue and collected in the manner provided by law for the collection of taxes from utilities, including the enforcement and collection provisions of Article 1, Chapter 54 of Title 12 and paid into the state treasury as are other taxes collected by the Department of Revenue for the State less the Department of Revenue's actual incremental increase in the cost of administration. These assessments are in addition to any amounts assessed pursuant to Sections 58-4-60 and 58-5-480 and must be deposited in a special fund in the State Treasury from which the salaries, benefits, expenses, and charges must be paid.

(B)    The Executive Director of the Office of Regulatory Staff is authorized to employ expert witnesses and other professional engineering, construction, or other experts or consultants as the executive director considers necessary to assist the regulatory staff in its review and audit of project development order applications, applications, combined applications, and applications for revised rates orders; participation in proceedings under this article; and in auditing and monitoring on-going construction of plants eligible for revised rates orders. The compensation paid to these persons may not exceed the compensation ordinarily paid by the regulated industry for these specialists. Upon agreement between the utility and the Office of Regulatory Staff or upon approval of the review committee established under Section 58-3-20, the compensation and expenses must be paid by the utility or utilities filing an application under this article.

(C)    Compensation and expenses paid by the utility under this article must be treated as capital costs of the plant for ratemaking purposes.

Section 58-33-298.    Filings under this article may not be considered in applying the limitations on rate filings contained in Section 58-27-870(E)."

SECTION    3.    Section 58-27-870(C) of the 1976 Code is amended to read:

"(C)    Should the commission determine that it cannot, due to circumstances reasonably beyond its control, issue an order within the six-month period prescribed by this section, the commission may, by order, extend the six-month period for an additional five days. The order shall set forth such circumstances and make appropriate findings concerning the need for the extended period fail to issue an order within the period prescribed in this section, then upon written notice by any party to the commission of that fact, the commission shall have an additional ten days from the receipt of the notice to issue the required order. If the commission rules and issues its order within the time aforesaid, and the utility shall appeal from the order, by filing with the commission a petition for rehearing, the utility may put the rates requested in its schedule into effect under bond only during the appeal and until final disposition of the case. Such bond must be in a reasonable amount approved by the commission, with sureties approved by the commission, conditioned upon the refund, in a manner to be prescribed by order of the commission, to the persons, corporations, or municipalities respectively entitled to the amount of the excess, if the rate or rates put into effect are finally determined to be excessive; or there may be substituted for the bond other arrangements satisfactory to the commission for the protection of parties interested. During any period in which a utility charges increased rates under bond, it must provide records or other evidence of payments made by its subscribers or patrons under the rate or rates which the utility has put into operation in excess of the rate or rates in effect immediately prior to the filing of the schedule. All increases in rates put into effect under the provisions of this section which are not approved and for which a refund is required shall bear interest at a rate of twelve percent per annum. The interest shall commence on the date the disallowed increase is paid and continue until the date the refund is made. In all cases in which a refund is due, the commission must order a total refund of the difference between the amount collected under bond and the amount finally approved."

SECTION    4.    Section 58-27-610 of the 1976 Code is amended by adding a new item (5) to read:

"(5)    As used in this article the term 'corridor rights' means those rights an electric supplier has to serve customers which rights arise from the provisions of Section 58-27-620(1)(b), (c) and (d)."

SECTION    5.    Section 58-27-620(1) of the 1976 Code is amended to read:

"(1)    Every electric supplier shall have the right to serve:

(a)    all premises being served by it, or to which any of its facilities for service are attached on July 1, 1969.;

(b)    subject to paragraph (d)(i) of this subsection, all premises initially requiring electric service after July 1, 1969, which are located wholly within three hundred feet of such the electric supplier's lines as such the lines exist on July 1, 1969.;

(c)    subject to paragraph (d)(i) of this subsection, all premises initially requiring electric service after July 1, 1969, which are located wholly within three hundred feet of lines that such the electric supplier constructs to serve consumers that it has the right to serve or acquires after July 1, 1969; provided, however, that an electric supplier shall not have the right to serve premises wholly within a service area assigned to another electric supplier pursuant to Section 58-27-640 from a line constructed after the date of such the assignment.;

(d)    if chosen by the consumer, any premises initially requiring electric service after July 1, 1969, which are:

(i)    which are located wholly or partially within three hundred feet of the lines of such the electric supplier and also wholly or partially within three hundred feet of the lines of another electric supplier, as each of such the supplier's lines exist on July 1, 1969, or as extended to serve consumers that the supplier has the right to serve or as acquired after July 1, 1969,;

(ii)    which are not located wholly within three hundred feet of the lines of any electric supplier and are not located partially within three hundred feet of the lines of two or more electric suppliers, unless such the premises are located wholly or partially within an area assigned to an electric supplier pursuant to Section 58-27-640,;

(iii)    which are located partially within a service area assigned to such the electric supplier and partially within a service area assigned to another electric supplier pursuant to Section 58-27-640 or are located partially within a service area assigned to such the electric supplier pursuant to Section 58-27-640 and partially within three hundred feet of the lines of another electric supplier, or are located partially within three hundred feet of the lines of such the electric supplier, as such the lines exist on July 1, 1969, or as extended to serve consumers it has the right to serve or as acquired after that date, and partially within a service area assigned to another electric supplier pursuant to Section 58-27-640,; and

(iv)    which are located only partially within a service area assigned to one electric supplier pursuant to Section 58-27-640 and are located wholly outside the service area assigned to other electric suppliers and are located wholly more than three hundred feet from other electric suppliers' lines, and any electric supplier not so chosen by the consumer in any of the situations described in this paragraph (d) shall not thereafter furnish service to such the premises. The choice of the consumer in the situations described in this paragraph (d) shall must be controlling, and the Public Service Commission shall have no authority to order any other supplier to serve such the consumer, except as provided in Section 58-27-660.;

(e)    All premises located wholly within the service area assigned to it pursuant to Section 58-27-640. with respect to the above provisions of Section 58-27-620(1)(d), a premises consisting of multiple buildings, structures, or facilities, is deemed to be located partially within three hundred feet of a supplier's line having service rights if:

(i)    at least twenty percent of the total connected electric load of the premises, as determined by the final site plan submitted for construction permits, is due to a single building, structure, or facility located wholly or partially within three hundred feet of the line having service rights;

(ii)    a minimum of eighty percent of the total connected electric load of the premises, as determined by the final site plan submitted for construction permits, is to be served to buildings, structures, or facilities located wholly within two thousand feet of the line having service rights;

(iii)    service is rendered through only one meter to all buildings, structures, or facilities constituting the premises;

(f)    with respect to the above provisions of Section 58-27-620(1)(d)(iii), a premises consisting of multiple buildings, structures, or facilities is deemed to be located partially within a supplier's territory if:

(i)        at least twenty percent of the total connected electric load of the premises, as determined by the final site plan submitted for construction permits, is due to a single building, structure, or facility located wholly or partially within the supplier's territory;

(ii)    a minimum of eighty percent of the total connected electric load of the premises, as determined by the final site plan submitted for construction permits, is to be served to buildings, structures, or facilities located wholly within two thousand feet of the supplier's territory; and

(iii)    service is rendered through only one meter to all buildings, structures, or facilities constituting the premises;

(g)    all premises located wholly within the service area assigned to it pursuant to Section 58-27-640;

(h)    all premises being served by it pursuant to the provisions of Section 58-27-620(2) as it existed before the effective date of Article 4, Chapter 33 of Title 58."

SECTION    6.    Section 58-27-620(2) of the 1976 Code is amended to read:

"(2)    Any electrical utility shall have the right to furnish electric service to any industrial premises initially requiring electric service after July 1, 1969, if requested in writing to provide such service and the connected load for initial full plant operation at such the industrial premises is 750 kilowatts or larger, whether or not such the industry is located wholly within three hundred feet of the lines of, or wholly within an area assigned, pursuant to Section 58-27-640 to an electric cooperative; provided, however, that no other consumer whose premises are located wholly within three hundred feet of the lines of, or wholly within an area assigned to, an electric cooperative may be served from a line or lines of the utility constructed to serve such industrial premises, except another such industrial premises. If an electrical utility is chosen to serve industrial premises pursuant to this subsection (2), no other electric suppliers shall thereafter furnish service to such premises. Any electric supplier or electric utility shall have the right to furnish electric service to any industrial premises initially requiring electric service after the effective date of Article 4, Chapter 33 of Title 58 provided that the total connected load of the premises, as determined by the final site plan submitted for construction permits, is 7.5 megawatts or larger, and the premises is located entirely within one of the following parcels:

(a)    the parcel shown on Map 101 filed in the Office of Regulatory Staff;

(b)    the parcel shown on Map 102 filed in the Office of Regulatory Staff;

(c)    the parcel shown on Map 103 filed in the Office of Regulatory Staff;

(d)    the parcel shown on Map 104 filed in the Office of Regulatory Staff;

(e)    the parcel shown on Map 105 filed in the Office of Regulatory Staff;

The provisions of this item (2) may apply to additional parcels upon agreement of the affected electric suppliers and approval of the Public Service Commission after notice and an opportunity for hearing is given to all interested parties.

The Office of Regulatory Staff shall maintain these maps as public records. If any additional parcels are added pursuant to this item (2), maps must be prepared by, or at the direction of, the Office of Regulatory Staff and maintained by the Office of Regulatory Staff as public records."

SECTION    7.    Section 58-27-620 of the 1976 Code is amended by adding a new item (8) to read:

"(8)    In addition to the authority granted to the commission in the preceding provisions of this section, the commission shall have the authority to approve agreements between electric suppliers concerning corridor rights. This additional authority only shall apply in situations where all affected electric suppliers have reached an agreement concerning corridor rights. With respect to the agreements, the commission shall approve the agreements if, after giving notice and an opportunity for hearing to interested parties, it finds the agreements to be fair and reasonable, but the commission shall not have the authority to alter or amend any such agreement unless all affected electric suppliers agree to the alteration or amendment."

SECTION    8.    Section 58-27-660(2) of the 1976 Code is amended to read:

"(2)    The Public Service Commission shall have the authority and jurisdiction, after notice to all affected electric suppliers and the Office of Regulatory Staff and after hearing, if a hearing is requested by any affected electric supplier, the Office of Regulatory Staff, or any other interested party, to order any electric supplier which may reasonably do so to furnish electric service to any consumer who desires service from such the electric supplier at any premises being served by another electric supplier, including service being provided under the provisions of Section 58-27-620(2) as it existed before the effective date of Article 4, Chapter 33 of Title 58 or at premises which another electric supplier has the right to serve pursuant to other provisions of this article, and to order such the other electric supplier to cease and desist from furnishing electric service to such the premises, upon a finding that service to such the consumer by the electric supplier which is then furnishing service, or which has the right to furnish service, to such the premises, is or will be inadequate or undependable, and cannot or will not be made adequate and dependable within a reasonable time, or that the rates, conditions of service, or service regulations, applied to such the consumer, are unreasonably discriminatory."

SECTION    9.    Section 58-27-865(A)(1) of the 1976 Code is amended to read:

/    "(A)(1)    The words 'fuel cost' as used in this section include the cost of fuel, fuel costs related to purchased power, and the cost of SO2 emission allowances as used and must be reduced by the net proceeds of any sales of SO2 emission allowances by the utility. The term 'fuel cost' as used in this section includes the cost of fuel, the cost of fuel transportation, and fuel costs related to purchased power. 'Fuel cost' also shall include: (a) the cost of ammonia, lime, limestone, urea, dibasic acid, and catalysts consumed in reducing or treating emissions; and (b) the cost of emission allowances, as used, including allowances for SO2, NOX, mercury, and particulates. Upon application of the utility, and after a hearing at which all interested parties may appear and present evidence, the commission may allow other variable environmental costs or environmental allowances related to the consumption of fuel, which are required or caused to be required by the federal government to be recovered as a component of fuel costs. Alternatively, such other variable environmental costs or environmental allowances may be recovered as an element of the rates established under Sections 58-27-860 and 58-27-870. Fuel costs must be reduced by the net proceeds of any sales of emission allowances by the utility."

SECTION    10.    Section 58-27-1210 of the 1976 Code is amended to read:

"Section 58-27-1210.    (A)    When ordered by the commission after a hearing, any electrical utility, distribution electric cooperative, or consolidated political subdivision, may be required to establish, construct, maintain, and operate any reasonable extension of its existing facilities. If any such extension, however, will interfere with the service or system of any other electrical utility, distribution electric cooperative, or consolidated political subdivision, the commission may, on petition and after hearing, either may order the discontinuance of such the extension or prescribe terms and conditions with respect thereto as may be just and reasonable. Each electrical utility, distribution electric cooperative, and consolidated political subdivision, within areas assigned to it by the commission and within three hundred feet of its lines, as defined in Section 58-27-610, is obligated to comply with all requests for service in accordance with its schedules of rates and service rules and regulations on file with the commission.

(B)    Electric utilities, distribution cooperatives, or consolidated political subdivisions shall obtain commission approval of proposed construction of electric facilities only in the following situations where:

(1)    one electric supplier proposes to construct a line that would cross the line of another electric supplier;

(2)    one electric supplier proposes to construct a line that is within seventy feet of another electric supplier's line at any point unless the lines are separated by a publicly maintained roadway; or

(3)    an electric supplier proposes to construct or extend a line through the territory of another electric supplier to or into a municipality.

No commission approval is required under this subsection where all affected electric suppliers reach an agreement on approval of the proposed construction or where either line is six hundred volts or less."

SECTION    11.    If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this chapter is for any reason held to be unconstitutional or invalid, such holding shall not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this act, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.

SECTION    12.    This act takes effect upon approval by the Governor.    /

Renumber sections to conform.

Amend title to conform.

THOMAS L. MOORE for Committee.

EXPLANATION OF IMPACT:

Office of Regulatory Staff (ORS)

Section 58-33-295 allows ORS to create additional positions for the purposes of performing its duties under this bill based on the number of base load review applications. Two additional positions are allowed when there is one nuclear unit subject to the application process and one additional position for each subsequent nuclear unit application. ORS anticipates three applications will be submitted if the bill is enacted. Therefore, ORS estimates employing four additional staff at $356,250 for salary and fringe plus $79,920 for other operating expenses. Cost would be funded with funds generated through assessments of the regulated facilities and will depend on the actual number of applications submitted.

Other Agencies

Enactment would have little or no impact on expenditures for the Public Service Commission and the Department of Revenue. In addition, the definition of "Utility" as used within this act specifically excludes the South Carolina Public Service Authority. Therefore, there would be no impact on that entity.

Approved By:

Harry Bell

Office of State Budget

TO AMEND CHAPTER 33 OF TITLE 58, CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING ARTICLE 4 SO AS TO ENHANCE THE CERTAINTY OF INVESTMENTS IN THE INFRASTRUCTURE OF ELECTRIC UTILITIES SERVING CONSUMERS IN THIS STATE AND TO PROVIDE FOR REGULATORY OVERSIGHT OF THE DEVELOPMENT AND CONSTRUCTION OF BASE LOAD GENERATING PLANTS; TO AMEND SECTION 58-27-610, RELATING TO DEFINITIONS, SO AS TO DEFINE THE TERM "CORRIDOR RIGHTS"; TO AMEND SECTION 58-27-620, RELATING TO SERVICE RIGHTS OF AND RESTRICTIONS ON ELECTRIC SUPPLIERS, SO AS TO PROVIDE PARAMETERS TO DETERMINE WHICH SUPPLIER MAY SERVE PREMISES THAT CONSIST OF MULTIPLE BUILDINGS, STRUCTURES, OR FACILITIES; TO AMEND SECTION 58-27-660, RELATING TO SERVICE RIGHTS OF AND RESTRICTIONS ON ELECTRIC SUPPLIERS, SO AS TO RECOGNIZE THE AUTHORITY OF THE COMMISSION TO ACT WHEN IT FINDS THAT AN ELECTRIC SUPPLIER IS NOT PROVIDING ADEQUATE AND DEPENDABLE SERVICE; TO AMEND SECTION 58-27-865, RELATING TO FUEL COST RECOVERY, SO AS TO INCLUDE IN THE DEFINITION OF "FUEL COST" CERTAIN ENVIRONMENTAL COSTS AND EMISSIONS ALLOWANCE COSTS INCURRED IN THE PRODUCTION OF ELECTRIC POWER AND TO ALLOW THE PUBLIC SERVICE COMMISSION BY ORDER TO ALLOW ADDITIONAL ENVIRONMENTAL COSTS TO BE INCLUDED IN THE DEFINITION; AND TO AMEND SECTION 58-27-1210, RELATING TO EXTENSIONS OF SERVICE BY ELECTRIC UTILITIES, DISTRIBUTION ELECTRIC COOPERATIVES AND CONSOLIDATED POLITICAL SUBDIVISIONS, TO DEFINE THOSE SITUATIONS IN WHICH SUCH ENTITIES MUST SEEK COMMISSION APPROVAL BEFORE CONSTRUCTION OF FACILITIES.

Whereas, the General Assembly has determined it is in the public interest to provide for the recovery of the prudently incurred costs associated with new base load plants when they are constructed by investor-owned electrical utilities, and at the same time protect the customers of investor-owned electrical utilities from responsibility for imprudent financial obligations or costs; and

Whereas, the General Assembly has further determined that it is in the public interest to promote predictability in the determination of which electric supplier has the right to provide service in a given area or location. Although the Territorial Assignments Act of 1969 has been largely successful in promoting predictability, there are certain issues that have generated controversy with respect to the service rights of electric suppliers. Sections 2 through 4 of this Act are intended to address those situations. Section 6 of this act is intended to specify those situations in which electric suppliers must obtain commission approval for construction of facilities and is intended to supersede R. 103-304 to the extent it would require approval in any other situations; and

Whereas, by Act No. 138 of 1983, codified at Section 58-27-865 of the Code of Laws of South Carolina, the General Assembly provided a means for electric utilities to make routine, annual adjustments in the amount of fuel cost recovered from customers; and

Whereas, Section 58-27-865 has furthered the public interest by allowing the recovery of variable and incremental power supply costs on an accurate, timely and efficient basis; and

Whereas, by Act No. 348 of 1996, the General Assembly amended Section 58-27-865 to include in annual adjustments the costs of SO2 emissions allowances that utilities are required to consume in generating electricity; and

Whereas, certain electric utilities are now being required to further limit the SO2 emissions from their generating plants and also limit their emissions of NOX and/or acquire and consume emissions allowances and proposals are being made to require electric utilities to limit certain other emissions. Now, therefore,

Be it enacted by the General Assembly of the State of South Carolina:

SECTION    1.    Chapter 33, Title 58 of the 1976 Code is amended by adding:

Section 58-33-210.    This article shall be known, and may be cited, as 'Base Load Review' and is applicable to utilities as defined in Section 58-33-220 of this article.

Section 58-33-220.    The following words, when used in this article, shall have the following meanings:

(1)    'AFUDC' means the allowance for funds used during construction of a plant calculated according to applicable regulatory accounting principles.

(2)    'Base load plant' or 'plant' means a new coal or nuclear fueled electrical generating unit or units or facility that is designed to be operated at a capacity factor exceeding seventy percent annually and that has a gross initial generation capacity of three hundred fifty megawatts or more and which is intended in whole or in part to serve retail customers of a utility in South Carolina.

(3)    'Base load review application' or 'application' means an application for a base load review order under the terms of this article.

(4)    'Base load review order' means an order issued by the commission pursuant to Section 58-33-270 establishing that if a plant is constructed in accordance with an approved construction schedule, approved capital costs estimates, and approved projections of in-service expenses, as defined herein, the plant is considered to be used and useful for utility purposes such that its capital costs are prudent utility costs and are properly included in rates.

(5)    'Capital costs' or 'plant capital costs' means costs associated with the design, siting, selection, acquisition, licensing, construction, testing, and placing into service of a base load plant, and capital costs incurred to expand or upgrade the transmission grid in order to connect the plant to the transmission grid and includes costs that may be properly considered capital costs associated with a plant under generally accepted principles of regulatory or financial accounting, and specifically includes AFUDC associated with a plant and capital costs associated with facilities or investments for the transportation, delivery, storage, and handling of fuel.

(6)    'Combined application' means a base load review application which is combined with an application for a certificate under the Utility Facility Siting and Environmental Protection Act, or which involves a plant located outside of the State of South Carolina, and at the utility's option may be combined with an application for new electric rates under Section 58-27-860.

(7)    'Combined proceeding' means a proceeding to consider all aspects of a combined application.

(8)    'Construction work in progress' means capital costs as defined above associated with a base load plant which have been incurred but have not been included in the utility's plant-in-service.

(9)    'General rate proceeding' means a proceeding under Article 7, Chapter 27, Title 58 for the establishment of new electric rates and charges, and where orders in general rate proceedings are referenced in this article, these orders include rate orders issued in proceedings or combined proceedings under this article.

(10)    'In-service expenses' means reasonably projected expenses recognized under generally accepted principles of regulatory and financial accounting as a result of a plant commencing commercial operation, including:

(a)    expenses associated with operating and maintaining a plant, as well as taxes and governmental charges applicable to the plant (including taxes other than income taxes);

(b)    depreciation and amortization expenses related to the plant;

(c)    revenue requirements related to the utility's cost of capital applied to the investment in supplies, inventories, and working capital associated with the plant; and

(d)    other costs determined by the commission to be appropriate for rate making purposes.

In-service expenses includes, but is not limited to, labor, supplies, insurance, general and administrative expenses, and the cost of outside services, but does not include costs recovered as fuel costs pursuant to Section 58-27-865 of this title.

(11)    'Person' means any individual, group, firm, partnership, or corporation.

(12)    'Pre-construction costs' means all costs associated with a potential nuclear plant incurred prior to issuance of a certificate under the Utility Facility Siting and Environmental Protection Act, including without limitation the costs of evaluation, design, engineering, environmental and geotechnical analysis and permitting, contracting, other required permitting (e.g., early site permitting and combined operating license permitting), and initial site preparation costs and related consulting and professional costs, and shall include AFUDC associated with those costs. For potential nuclear plants located in other states, the costs shall be those incurred prior to issuance of a certificate by the host state under statutes comparable to the Utility Facility Siting and Environmental Protection Act.

(13)    'Proceeding' means the proceeding to consider an application filed under this chapter.

(14)    'Project development application' means an application for a project development order.

(15)    'Project development order' means an order establishing the prudence of a utility's decision to incur pre-construction costs associated with a nuclear plant or potential nuclear plant.

(16)    'Revised rates' means a revised schedule of electric rates and charges reflecting changes to the utility's then current rates and charges as authorized in this article and must be calculated using the rate design and allocation factors established in the base load review order issued pursuant to Section 58-33-275.

(17)    'Revised rates order' means an order issued by the commission approving, modifying, or denying the utility's request to charge revised rates under this article, which revised rates order an aggrieved party may contest in an adversarial hearing before the commission.

(18)    'Revised rates proceedings' means all proceedings to consider an application for revised rates or review of a revised rates order.

(19)    'Utility' means a person owning or operating equipment or facilities for generating, transmitting, or delivering electricity to South Carolina retail customers for compensation but it shall not include electric cooperatives, municipalities, the South Carolina Public Service Authority, or a person furnishing electricity only to himself, itself, its residents, employees, or tenants when the electricity is not resold or used by others.

(20)    'Utility Facility Siting and Environmental Protection Act' means Chapter 33 of Title 58.

(21)    'Weighted average cost of capital' or 'cost of capital' means the utility's average cost of debt and equity capital:

(a)    incorporating the return on equity on which rates were set in the order in the utility's most recent general rate proceeding;

(b)    incorporating the utility's current weighted average cost of debt;

(c)    these costs weighted according to the utility's capital structure for ratemaking purposes, as established in the order in the utility's last general rate proceeding, updated to reflect the utility's current levels of debt and equity capital; and

(d)    adjusted for the effect of income taxes.

Section 58-33-225.    The provisions of this section apply to the pre-construction costs of a nuclear-powered facility:

(A)    At any time prior to the filing of an application or a combined application under this act related to a specific plant, a utility may file a project development application with the commission.

(B)    In a project development application, the utility must:

(1)    describe the plant being considered and must designate:

(a)    the anticipated generation capacity (or range of capacity) of the plant; and

(b)    the projected annual capacity factors or range of factors of the plant.

(2)    provide information establishing the need for the generation capacity represented by the potential plant and the need for generation assets with the indicative annual capacity factors of the potential plant;

(3)    provide information establishing the reasonableness and prudence of the potential fuel sources and potential generation types that the utility is considering for the plant; and

(4)    provide such other information as shall be required to establish that the decision to incur pre-construction costs related to the potential nuclear plant is prudent in light the information known to the utility at the time and in light of the other alternatives available to the utility for supplying its generation needs.

(C)    The commission shall issue a project development order affirming the prudency of the utility's decision to incur pre-construction costs for the nuclear plant specified in the application if the utility demonstrates by a preponderance of evidence that the decision to incur pre-construction costs for such plant is prudent. In issuing its project development order, the commission shall not rule on the prudency or recoverability of specific items of cost, but shall rule instead on the prudency of the decision to incur pre-construction costs for the nuclear plant described in Section 58-33-225(B)(1).

(D)    Unless a party makes an affirmative showing in a subsequent proceeding that individual items of cost were imprudently incurred, or that other decisions subsequent to the issuance of a project development order were imprudently made in light of the information available to the utility at the time they were made, then all the pre-construction costs incurred for the potential nuclear plant shall be properly included in the utility's plant-in-service and shall be fully recoverable through rates in future proceedings under this chapter.

(E)    To the extent that a party in a general rate proceeding or revised rates proceeding establishes the imprudence of specific items of cost or of specific decisions made subsequent to the issuance of a project development order as set forth in Section 58-33-225(D), the commission may disallow the resulting costs but only to the extent that a prudent utility would have avoided those costs considering the information available to the utility at the time when they were incurred or the decisions at issue were made.

(F)    If the utility decides to abandon the project after issuance of a prudency determination under this section, the pre-construction costs related to that project must be deferred, with AFUDC being calculated on the balance, and shall be included in rates in the utility's next general rate proceeding or revised rates proceeding; however, as to the decision to abandon the plant, the utility shall bear the burden of proving by a preponderance of the evidence that the decision was prudent, and as to individual elements of cost, a party challenging those costs bears the burden of proving by a preponderance of evidence that those individual elements of cost were imprudently incurred. Recovery of capital costs and the utility's cost of capital associated with them may be disallowed only to the extent that the failure by the utility to anticipate or avoid the allegedly imprudent costs, or to minimize the magnitude of the costs, was imprudent considering the information available at the time that the utility could have acted to avoid or minimize the costs. Pending an order in the general rate proceeding or revised rates proceeding, the utility, at its discretion, may commence to amortize to cost of service the balance of the pre-construction costs related to the abandoned project over a period equal to the period during which the costs were incurred, or five years, whichever is greater.

(G)    Prudency determinations under Section 58-33-225(C) may not be challenged or reopened in any subsequent proceeding including proceedings under Article 7, Chapter 27, Title 58 and this article.

(H)    At any time after an initial project development order has been issued, a utility may file an amended project development application seeking a determination of the prudency of the utility's decision to continue to incur pre-construction costs considering changed circumstances or changes in the type or location of nuclear plant that the utility is pursuing or considering other characteristics or decisions related to the plant. The amended project development application must be considered in a separate docket, however the testimony and other evidence of the prior docket must be considered to be part of the new docket.

(I)    Pursuant to Section 58-33-240, the commission shall enter an order granting or denying a project development order or amended project development order within six months of the filing of the application. If a written order is not issued in that time, the application is considered granted.

Section 58-33-230.    (A)    Any utility proposing to construct a plant, individually or jointly with other parties, may elect to come under the terms of this article by filing an application or combined application with the commission, and by serving a copy of that application or combined application on the Office of Regulatory Staff.

(B)    If the plant is to be located in South Carolina and no application for a certificate under the Utility Facility Siting and Environmental Protection Act has previously been granted or is then pending, the utility shall file a combined application under this article.

(C)    If the plant is to be located outside South Carolina but will serve retail customers in South Carolina, the utility shall file a combined application; however, as to the Utility Facility Siting and Environmental Protection Act, the combined application shall address only the requirements of Sections 58-33-160(1)(a), 58-33-160(1)(d), and 58-33-160(1)(f) of that act and information pertaining to the environmental impacts of the plant shall not be included in the combined application. In issuing the resulting order, as to the Utility Facility Siting and Environmental Protection Act, the commission shall make the determinations required under Sections 58-33-160(1)(a), 58-33-160(1)(d), and 58-33-160(1)(f) of that act only.

(D)    For plants located outside South Carolina that will serve retail customers in South Carolina, the issuance of a certificate for the plant by the host state after a review of issues comparable to those considered under Sections 58-33-160(1)(a), 58-33-160(1)(d), and 58-33-160(1)(f) of the Utility Facility Siting and Environmental Protection Act shall create a rebuttable presumption that the requirements of those sections are satisfied.

(E)    An application or combined application may be combined with a general rate proceeding application at the utility's option.

(F)    The South Carolina Office of Regulatory Staff shall safeguard the public interest in all matters arising under this article. It shall have full audit rights related to all matters arising under this article and shall review the reasonableness and necessity of all cost to be recovered hereunder.

Section 58-33-240.    (A)    Except as otherwise specified in this article, all procedural requirements that apply to general rate proceedings by statute or regulation shall apply to proceedings and combined proceedings, to revised rates proceedings, and to the judicial review of orders issued under this article. The requirements related to the form and content of applications in general rate proceedings, however, shall only apply to proceedings or combined proceedings that include an application for new electric rates under Section 58-27-860 of this title and shall only apply to that part of the application or combined application which is filed under Section 58-27-860.

(B)    As to combined proceedings, the procedural requirements related to general rate proceedings shall control over any inconsistent provisions in other statutes; however, provisions of Section 58-33-140 of the Utility Facility Siting and Environmental Protection Act related to parties and appearances shall apply to proceedings involving facilities located in this State to the extent parties seek to appear to raise issues arising under that act.

(C)    In proceedings to review revised rates orders, no further notice to the public, customers, and others is required additional to that provided upon filing of the proceeding or combined proceeding. In proceedings to review revised rates orders, the utility's revised rates filing shall serve as the application and the utility shall be considered to be the applicant.

(D)    In proceedings and combined proceedings, the utility shall have the burden of proving that the decision to build the plant was prudent and shall have the burden of proof as to all matters on which the commission is required to enter findings under Section 58-33-270(A), (B), (C), and (D).

Section 58-33-250.    The application for a base load review order under this article must include:

(1)    information showing the anticipated construction schedule for the plant.

(2)    information showing the anticipated components of capital costs and the anticipated schedule for incurring them.

(3)    information showing the projected effect of investment in the plant on the utility's overall revenue requirement for each year during the construction period.

(4)    information identifying:

(a)    the specific type of unit or units selected for the plant;

(b)    the suppliers of the major components of the plant; and

(c)    the basis for selecting the type of unit or units, major components, and suppliers.

(5)    information detailing the qualification and selection of principal contractors and suppliers, other than those listed in Section 58-33-250(D)(3) above for construction of the plant.

(6)    information showing the anticipated in-service expenses associated with the plant for the twelve months following commencement of commercial operation adjusted to normalize any atypical or abnormal expense levels anticipated during that period.

(7)    information required by Section 58-33-270(B)(5).

(8)    information identifying risk factors related to the construction and operation of the plant.

(9)    information identifying the proposed rate design and class allocation factors to be used in formulating revised rates.

(10)    the revised rates, if any are requested, that the utility intends to put in place after issuance of the resulting base load review order.

Section 58-33-260.    (A)    A combined application must contain:

(1)    an introduction;

(2)    material required by statute or regulation to be contained in an application filed under the Utility Facility Siting and Environmental Protection Act, except that combined applications associated with plants located outside South Carolina shall address only Sections 58-33-160 (1)(a), 58-33-160 (1)(d), and 58-33-160 (1)(f) and information pertaining to the environmental impacts of the plant shall not be included in such combined application;

(3)    the material required by statute or regulation to be contained in an application under this article, including the material required under Section 58-33-250;

(4)    if combined with a general rate proceeding, the material required to be filed by statute or regulation in applications for the establishment of new rates under Section 58-27-860; and

(5)    if the plant is located outside South Carolina, a copy of the order from the host state granting a certificate or other authorization similar to that granted under the Utility Facility Siting and Environmental Protection Act.

(B)    Where the same information is required in different sections of the combined application, it may be set forth once and cross-referenced as appropriate.

Section 58-33-270.    (A)    After a hearing, the commission shall issue a base load review order approving rate recovery for plant capital costs if it determines:

(1)    that the utility's decision to proceed with construction of the plant is prudent and reasonable considering the information available to the utility at the time;

(2)    for plants located in this State, that the utility has satisfied the requirements of Section 58-33-160 of the Utility Facility Siting and Environmental Protection Act either in a past proceeding or in the current proceeding if the current proceeding is a combined proceeding; and

(3)    for plants located outside South Carolina, that the utility has satisfied the requirements of Sections 58-33-160 (1)(a), 58-33-160 (1)(d), and 58-33-160 (1)(f).

(B)    The base load review order shall establish:

(1)    the anticipated construction schedule for the plant including contingencies;

(2)    the anticipated components of capital costs and the anticipated schedule for incurring them including specified contingencies;

(3)    the choice of the specific type of unit or units and major components of the plant;

(4)    the qualification and selection of principal contractors and suppliers for construction of the plant; and

(5)    the inflation indices used by the utility for costs of plant construction, covering major cost components or groups of related cost components. Each utility shall provide its own indices including: the source of the data for each index, if the source is external to the company, or the methodology for each index which is compiled from internal utility data, the method of computation of inflation from each index, a calculated overall weighted index for capital costs, and a five-year history of each index on an annual basis.

(C)    If revised rates are requested, the base load review order shall specify initial revised rates reflecting the utility's current investment in the plant which must be determined using the standards set forth in Section 58-33-280(B) and implemented according to Section 58-33-280(D).

(D)    The base load review order shall establish the rate design and class allocation factors to be used in calculating revised rates related to the plant. The rate design and class allocation factors established in the base load review order must be established using the rate design, class allocation factors, cost of service data and other data reflected in or underlying the order in the utility's most recent general rate proceeding, except that deviations from those rate designs and class allocation factors must be permissible when required to ensure that the resulting rates are just and reasonable for all customer classes.

(E)    As circumstances warrant, the utility may petition the commission, with notice to the Office of Regulatory Staff, for an order modifying any of the schedules, estimates, findings, class allocation factors, rate designs, or conditions that form part of any base load review order issued under this section. The commission shall grant the relief requested if, after a hearing, the commission finds:

(1)    as to the changes in the schedules, estimates, findings, or conditions, that the evidence of record justifies a finding that the changes are not the result of imprudence on the part of the utility; and

(2)    as to the changes in the class allocation factors or rate designs, that the evidence of record indicates the proposed class allocation factors or rate designs are just and reasonable.

(F)    The commission shall consider a request under Section 58-33-270(E) in a new docket which pursuant to Section 58-33-240 must be subject to the requirement that the relief requested is considered granted if not denied by order within six months of the date of filing.

(G)    The commission promptly shall schedule a hearing to consider any settlement agreement entered into between the Office of Regulatory Staff, as the party representing the public interest in the proceedings, and the utility applicant, provided that all parties shall have been given a reasonable opportunity to conduct discovery in the docket by the time the hearing is held. The commission may accept the settlement agreement as disposing of the matter, and issue an order adopting its terms, if it determines that the terms of the settlement agreement comport with the terms of this act.

Section 58-33-275.    (A)    A base load review order shall constitute a final and binding determination that a plant is used and useful for utility purposes, and that its capital costs are prudent utility costs and expenses and are properly included in rates so long as the plant is constructed or is being constructed within the parameters of:

(1)    the approved construction schedule, including contingencies; and

(2)    the approved capital costs estimate, including specified contingencies.

(B)    Determinations under Section 58-33-275(A) may not be challenged or reopened in any subsequent proceeding, including proceedings under Article 7, Chapter 27, Title 58 and 58-33-280.

(C)    So long as the plant is constructed or being constructed in accordance with the approved schedules, estimates and projections set forth in Sections 58-33-270 (B)(1) and 58-33-270 (B)(2), as adjusted by the inflation indices set forth in Section 58-33-270(B)(5), the utility must be allowed to recover its capital costs related to the plant through revised rate filings or general rate proceedings.

(D)    Changes in fuel costs will not be considered in conducting any evaluation under this section.

(E)    In cases where a party proves by a preponderance of the evidence that there has been a material and adverse deviation from the approved schedules, estimates, and projections set forth in Section 58-33-270 (B)(1) and (B)(2), as adjusted by the inflation indices set forth in Section 58-33-270(B)(5), the commission may disallow the additional capital costs that result from the deviation, but only to the extent that the failure by the utility to anticipate or avoid the deviation, or to minimize the resulting expense, was imprudent considering the information available at the time that the utility could have acted to avoid the deviation or minimize its effect.

(F)    In no event may the commission or any court enjoin or stay construction of a plant once a certificate authorizing its construction has been issued under the Utility Facility Siting and Environmental Protection Act.

Section 58-33-277.    (A)    After issuance of a base load review order approving rate recovery for capital costs related to the plant, the utility will file reports with the Office of Regulatory Staff quarterly until the plant begins commercial operation. These reports must be filed no later than forty-five days after the close of a quarter, shall not be combined with any other filing, and shall contain the following information:

(1)    the progress of construction of the plant;

(2)    updated construction schedules;

(3)    schedules of the capital costs incurred including updates to the information required by Section 58-33-270(B)(5);

(4)    updated schedules of the anticipated capital costs; and

(5)    other information as the Office of Regulatory Staff may require.

(B)    The Office of Regulatory Staff shall conduct on-going monitoring of the construction of the plant and expenditure of capital through review and audit of the quarterly reports under this article, and shall have the right to inspect the books and records regarding the plant and the physical progress of construction upon reasonable notice to the utility.

Section 58-33-280.    (A)    No earlier than one year after filing the application or combined application, and no more frequently than annually thereafter, the utility may file with the commission and serve on the Office of Regulatory Staff requests for the approval of revised rates subsequent to those approved in the base load review order.

(B)    Revised rates shall reflect the recovery of the utility's weighted average cost of capital applied to all or, at the utility's option, part of the outstanding balance of construction work in progress, calculated as of a date specified in the filing. Any construction work in progress not included in any specific filing for revised rates shall continue to earn AFUDC and may be included in rates through future filings. The revised rates filing shall include the most recent monitoring report filed under Section 58-33-277(A) updated to reflect information current as of the date specified in the filing.

(C)    Written comments to the commission and the Office of Regulatory Staff concerning the revised rates and the information supporting them shall be allowed within fifteen days of the revised rates filing.

(D)    The Office of Regulatory Staff shall review and audit the revised rates and the information supporting them to determine their compliance with the terms of this article.

(E)    No later than sixty days after the date of the revised rates filing, the Office of Regulatory Staff shall serve on the commission and all intervenors and parties of record a report indicating the results of its review and audit and proposing any changes to the revised rates or the information supporting them that the Office of Regulatory Staff determines to be necessary to comply with the terms of this article.

(F)    Written comments related to the report may be filed with the commission within fifteen days from the date of the filing of the report. Comments must be simultaneously served on the Office of Regulatory Staff and simultaneously mailed or electronically transmitted to the utility and to all intervenors and parties of record who previously appeared and filed comments. The Office of Regulatory Staff may revise its report considering comments filed.

(G)    No later than ninety days after the date of the revised rates filing, the commission shall issue a revised rates order granting, modifying or denying revised rates as filed by the utility. In the absence of such a revised rates order, the revised rates shall be considered to be approved as filed.

(H)    Where both Office of Regulatory Staff and the utility agree in writing on the revised rates to be implemented, the commission will give substantial weight to the agreement in issuing its revised rates order.

(I)    If the utility is granted a rate increase in the revised rates order, the utility shall provide notice to its customers with the next billing. The utility may implement revised rates for bills rendered on or after a date selected by the utility, which may not be sooner than thirty days after revised rates are approved.

(J)    Upon implementation of revised rates under this article, the utility will cease to accrue AFUDC on that component of its construction work in progress on which it is recovering its weighted average cost of capital through revised rates.

(K)    Other provisions of this article notwithstanding:

(1)    The utility may file a final set of revised rates for a plant to go into effect upon commercial operation of the plant, the filing to be made no sooner than seven months before the projected date that the plant is to commence commercial operations. In the final revised rates the utility may include recovery of the weighted average cost of capital applied to all or part of the capital costs associated with the plant. In all cases, the decision to seek recovery in revised rates of less than the full amount of its cost must be at the utility's sole discretion. Rate adjustments to reflect the revenue requirements related to in-service expenses must be included in the final revised rates and shall be based on the utility's most current budget estimates of those expenses for the succeeding twelve-month period at the time the final revised rates are filed or actual expenses if available.

(2)    If the commission rejects a revised rate filing on grounds that may be corrected in a subsequent filing or if the utility withdraws a revised rate filing before a revised rates order is issued, the utility may file a subsequent request for revised rates at any time thereafter.

(3)    The utility may seek to recover any capital costs, in-service expenses, or other costs not included in revised rates through future general rate proceedings.

(L)    Where a plant is abandoned after a base load review order approving rate recovery has been issued, the capital costs and AFUDC related to the plant shall nonetheless be recoverable hereunder unless and to the extent that a party shows that the utility was imprudent in managing the construction of the plant, in deciding to abandon the construction of the plant, or in managing its costs in terminating construction of the plant. The burden of proof must be on the party challenging the prudency of the utility's decision to abandon the plant. Recovery of capital costs and the utility's cost of capital associated with them may be disallowed only to the extent that the failure by the utility to anticipate or avoid the allegedly imprudent costs, or to minimize the magnitude of the costs, was imprudent considering the information available at the time that the utility could have acted to avoid or minimize the costs. The commission shall order the amortization and recovery through rates of the investment in the abandoned plant as part of an order adjusting rates hereunder.

Section 58-33-285.    (A)    Within thirty days of the issuance of a revised rates order pursuant to Section 58-33-280(E) of this article, or within thirty days of the failure by the commission to issue a revised rates order as required pursuant to Section 58-33-280(E), any aggrieved party may petition the commission for review of the revised rates order or of the failure to issue a revised rates order.     (B)    The Office of Regulatory Staff and the utility must be automatic parties to any proceedings under this section.

(C)    In filing for intervention under this section, intervenors shall identify with particularity the specific issues they intend to raise with regard to the revised rates order.

(D)    The party seeking review of the revised rates order shall serve a copy of such petition on the Office of Regulatory Staff and the utility on the same day and by the same means as it is provided to the commission.

(E)    Any filing under this section must be considered a new proceeding subject to the provisions of Section 58-33-240. The commission shall open a single new docket for all filings related to any one set of revised rates filed under this article.

Section 58-33-287.    (A)    The commission shall issue its order ruling upon a petition for review of a revised rates order within six months. If the petition for review has been resolved among the parties by settlement agreement, the commission shall consider and accept or reject any settlement agreement entered into by the parties within forty-five days. If a settlement agreement is reached between some but not all parties, then the settlement agreement, if approved by the commission, must be deemed to dispose of any issues resolved in it that have not been raised by other parties to the proceeding pursuant to Section 58-33-285(C).

(B)    Proceedings pursuant to Section 58-33-285 are limited to issues related to whether the revised rates filed by the utility comply with the terms of the commission order issued pursuant to Section 58-33-270 and with the specific requirements of Section 58-33-280. Matters determined in orders issued pursuant to the Utility Facility Siting and Environmental Protection Act, Article 7, Chapter 27 of this title, or Section 58-33-270 are not subject to review in proceedings under this section.

(C)    In proceedings pursuant to Section 58-33-285, the commission shall allow limited discovery, and restrict the issues for discovery and hearing to whether the revised rates comply with the terms of the commission order issued pursuant to Section 58-33-270 and compliance with the specific requirements of Section 58-33-280.

(D)    The commission shall issue such motions to strike, protective orders, motions to quash, motions for costs and sanctions, and other rulings as are necessary to enforce the terms of this limitation.

(E)    The commission shall dismiss as a party any intervenor who, after notice, fails to abide by the limitations contained in this section.

(F)    The failure of the commission to enforce the terms of this section may be remedied by petition for writ of mandamus or supersedeas in the circuit court, which petition the court shall advance over all other matters on its docket and hear on an emergency basis, without the requirement of a formal answer or other return, such hearing to be held as soon as practicable upon twenty-four hours notice to the party against whom relief is sought. Proceedings related to the petitions may not serve to stay or delay proceedings before the commission.

(G)    The commission shall issue a final order that:

(1)    sets forth any changes that are required to the rates approved in the revised rates order;

(2)    determines the amount of any overcollection or undercollection of the revenues by the utility that resulted from application of the rates authorized in the revised rates order as compared to the rates authorized in the final order issued under this section; and

(3)    establishes a credit to refund the amount of an overcollection or a surcharge to collect the amount of an undercollection of revenues that arose during the time that the rates approved in the revised rates order, or imposed due to a failure of the commission to issue a revised rates order, were applicable and requires the utility to apply the credit or surcharge until such time as the overcollection or undercollection is exhausted.

(H)    If the final order increases the amount of capital costs for which the utility may recover its weighted average cost of capital through revised rates, the AFUDC booked on those capital costs between the issuance of the revised rates order and the final order shall remain on the books of the utility and shall not be reversed or adjusted. Surcharges related to under collection of costs must be calculated without consideration of AFUDC amounts recognized on the capital costs during this period.

(I)    If the final order reduces the amount of capital costs for which the utility may recover its weighted average cost of capital through revised rates for reasons other than the conclusive finding that the capital costs were imprudently incurred, then the utility may resume accrual of AFUDC on any capital costs that were not included in rate recovery and may book an amount of AFUDC equal to the AFUDC not recognized during the time the rates approved in the revised rates order were in effect.

Section 58-33-290.    The denial of a project development application, application or combined application under this article shall not preclude the utility from filing a new or amended project development application, application or combined application at any time. A utility may proceed to construct a plant even if assurance of prudency or cost recovery under this article is not sought or is denied, and the failure to seek or obtain such an assurance may not be used as evidence or precedent in any future proceeding.

Section 58-33-295.    (A)    The Office of Regulatory Staff is authorized to create additional positions for purposes of performing its duties under this article as follows:

(1)    two additional positions when there is one nuclear unit that is subject to an application for a project development order, an application, or a combined application under this article, or that is under construction or abandonment and eligible for entry of future revised rates orders;

(2)    one additional position for each additional nuclear unit thereafter.

The utility or utilities electing to file an application, project development order, or combined application under this article shall bear the costs associated with these positions, including all salaries, benefits, expenses, and charges, in proportion to the number of these units that they own in whole or in part as a percentage of the total number of these units in the regulatory process under this article at the time. The Office of Regulatory Staff must annually certify to the Department of Revenue by May first the amounts to be assessed. By July first of each year, the Department of Revenue must assess each utility for its assessment, which assessment must be due and payable by July fifteenth. The assessments must be charged against a utility by the Department of Revenue and collected in the manner provided by law for the collection of taxes from utilities, including the enforcement and collection provisions of Article 1, Chapter 54 of Title 12 and paid into the state treasury as are other taxes collected by the Department of Revenue for the State less the Department of Revenue's actual incremental increase in the cost of administration. These assessments are in addition to any amounts assessed pursuant to Sections 58-4-60 and 58-5-480 and must be deposited in a special fund with the State Treasurer's Office from which the salaries, benefits, expenses, and charges must be paid.

(B)    The Executive Director of the Office of Regulatory Staff is authorized to employ expert witnesses and other professional engineering, construction, or other experts or consultants as the executive director considers necessary to assist the regulatory staff in its review and audit of project development order applications, applications, combined applications, applications for revised rates orders, participation in proceedings under this article, and in auditing and monitoring on-going construction of plants eligible for revised rates orders. The compensation paid to these persons may not exceed the compensation ordinarily paid by the regulated industry for these specialists. Upon agreement between the utility and the Office of Regulatory Staff or upon approval of the review committee established under Section 58-3-20, the compensation and expenses must be paid by the utility or utilities filing an application under this article.

(C)    Compensation and expenses paid by the utility under this article must be treated as capital costs of the plant for rate making purposes.

Section 58-33-298.    Filings under this chapter may not be considered in applying the limitations on rate filings contained in Section 58-27-870(E)."

SECTION    2.    Section 58-27-610 of the 1976 Code is amended by adding the following numbered subsection at the end to read:

"(5)    As used in this article, the term 'corridor rights' means those rights an electric supplier has to serve customers which rights arise from the provisions of Section 58-27-620(1)(b), (c), and (d)."

SECTION    3.    Section 58-27-620 of the 1976 Code is amended to read:

"Section 58-27-620.    With respect to service in all areas outside the corporate limits of municipalities, electric suppliers shall have rights and be subject to restrictions as follows:

(1)    Every electric supplier shall have the right to serve:

(a)    all premises being served by it, or to which any of its facilities for service are attached on July 1, 1969.;

(b)    subject to paragraph (d)(i) of this subsection, all premises initially requiring electric service after July 1, 1969, which are located wholly within three hundred feet of such the electric supplier's lines as such the lines exist on July 1, 1969.;

(c)    subject to paragraph (d)(i) of this subsection, all premises initially requiring electric service after July 1, 1969, which are located wholly within three hundred feet of lines that such the electric supplier constructs to serve consumers that it has the right to serve or acquires after July 1, 1969; provided, however, that an electric supplier shall not have the right to serve premises wholly within a service area assigned to another electric supplier pursuant to Section 58-27-640 from a line constructed after the date of such assignment.;

(d)    if chosen by the consumer, any premises initially requiring electric service after July 1, 1969, which are

(i) which are located wholly or partially within three hundred feet of the lines of such the electric supplier and also wholly or partially within three hundred feet of the lines of another electric supplier, as each of such the supplier's lines exist on July 1, 1969 or as extended to serve consumers that the supplier has the right to serve or as acquired after July 1, 1969;

(ii) which are not located wholly within three hundred feet of the lines of any electric supplier and are not located partially within three hundred feet of the lines of two or more electric suppliers, unless such the premises are located wholly or partially within an area assigned to an electric supplier pursuant to Section 58-27-640;

(iii) which are located partially within a service area assigned to such the electric supplier and partially within a service area assigned to another electric supplier pursuant to Section 58-27-640 or are located partially within a service area assigned to such the electric supplier pursuant to Section 58-27-640 and partially within three hundred feet of the lines of another electric supplier, or are located partially within three hundred feet of the lines of such the electric supplier, as such the lines exist on July 1, 1969, or as extended to serve consumers it has the right to serve or as acquired after that date, and partially within a service area assigned to another electric supplier pursuant to Section 58-27-640,; and

(iv) which are located only partially within a service area assigned to one electric supplier pursuant to Section 58-27-640 and are located wholly outside the service area assigned to other electric suppliers and are located wholly more than three hundred feet from other electric suppliers' lines, and any electric supplier not so chosen by the consumer in any of the situations described in this paragraph (d) shall not thereafter furnish service to such the premises. The choice of the consumer in the situations described in this paragraph (d) shall must be controlling, and the Public Service Commission shall have no authority to order any other supplier to serve such the consumer, except as provided in Section 58-27-660.;

(e)    with respect to the provisions of subsection (1)(d) of this section, a premises consisting of multiple buildings, structures, or facilities is deemed to be located partially within three hundred feet of a supplier's line having service rights if:

(i)        at least twenty percent of the total connected electric load of the premises, as determined by the final site plan submitted for construction permits, is due to a single building, structure, or facility located wholly or partially within three hundred feet of the line having service rights;

(ii)    a minimum of eighty percent of the total connected electric load of the premises, as determined by the final site plan submitted for construction permits, is to be served to buildings, structures, or facilities located wholly within two thousand feet of the line having service rights; and

(iii)    service is rendered through only one meter to all buildings, structures, or facilities constituting the premises;

(f)    with respect to the provisions of subsection (1)(d)(iii) of this section, a premises consisting of multiple buildings, structures, or facilities is deemed to be located partially within a supplier's territory if:

(i)        at least twenty percent of the total connected electric load of the premises, as determined by the final site plan submitted for construction permits, is due to a single building, structure, or facility located wholly or partially within the supplier's territory;

(ii    )    a minimum of eighty percent of the total connected electric load of the premises, as determined by the final site plan submitted for construction permits, is to be served to buildings, structures, or facilities located wholly within two thousand feet of the supplier's territory; and

(iii)    service is rendered through only one meter to all buildings, structures, or facilities constituting the premises;

(e)(g) all premises located wholly within the service area assigned to it pursuant to Section 58-27-640;

(h)    all premises being served by it pursuant to the provisions of Section 58-27-620(2) as it existed before the effective date of Act ___ of 2007.

(2)    Any electrical utility shall have the right to furnish electric service to any industrial premises initially requiring electric service after July 1, 1969 if requested in writing to provide such service and the connected load for initial full plant operation at such industrial premises is 750 kilowatts or larger, whether or not such industry is located wholly within three hundred feet of the lines of, or wholly within an area assigned, pursuant to Section 58-27-640 to an electric cooperative; provided, however, that no other consumer whose premises are located wholly within three hundred feet of the lines of, or wholly within an area assigned to, an electric cooperative may be served from a line or lines of the utility constructed to serve such industrial premises, except another such industrial premises. If an electrical utility is chosen to serve industrial premises pursuant to this subsection (2), no other electric suppliers shall thereafter furnish service to such premises.

Any electric utility or electric supplier shall have the right to furnish electric service to any industrial premises initially requiring electric service after [date of Act] provided that:

(a)    the total connected load of the premises, as determined by the final site plan submitted for construction permits, is seven and one-half megawatts or larger; and

(b)    the premises is located entirely within one of the following parcels:

(i)        the parcel shown on Map No. 101 filed with the Office of Regulatory Staff on February __,2007;

(ii)    the parcel shown on Map No. 102 filed with the Office of Regulatory Staff on February ___, 2007;

(iii)    the parcel shown on Map No. 103 filed with the Office of Regulatory Staff on February ___, 2007;

(iv)    the parcel shown on Map No. 104 filed with the Office of Regulatory Staff on February __, 2007;

(v)    the parcel shown on Map No. 105 filed with the Office of Regulatory Staff on February __, 2007;

(vi)    the provisions of this subsection may apply to additional parcels upon agreement of the affected electric suppliers and approval of the commission after notice and an opportunity for hearing is given to all interested parties.

(3)    No electric supplier shall furnish temporary electric service for the construction of premises which it would not have the right to serve under this section if such premises were already constructed. The construction of lines for, and the furnishing of, temporary service for the construction of premises which any other electric supplier, if chosen by the consumer, would have the right to serve if such premises were already constructed, shall not impair the right of such other electric supplier to furnish service to such premises after the construction thereof, if then chosen by the consumer; nor, unless the consumer chooses to have such premises served by the supplier which furnished the temporary service, shall the furnishing of such temporary service or the construction of a line therefor impair the right of any other electric supplier to furnish service to any other premises which, without regard to the construction of such temporary service line, it has the right to serve.

(4)    No electric supplier shall furnish electric service to any premises in this State outside the limits of any incorporated city or town except as permitted by this section; provided, that nothing in this section shall restrict the right of an electric supplier to furnish electric service to its own premises or to exchange or interchange electric energy with, purchase electric energy from or sell electric energy to any other electric supplier.

(5)    In extending electric service to a consumer an electric supplier will, insofar as possible, construct its facilities in accordance with good utility practices.

(6)    Any electric cooperative which is engaged primarily in the furnishing of electricity for resale to other electric cooperatives shall have the right to furnish such electricity for resale to all electric cooperatives but shall not furnish electric service to any other customers or premises.

(7)    Upon consolidation of the units of government within any county, pursuant to the Constitution of this State, existing municipal electric plants or systems within such county may continue in operation under the consolidated political subdivision and shall be subject to this chapter except within those areas as provided for in Section 58-27-20. For the purposes of this chapter a consolidated political subdivision shall not be deemed a municipality and the corporate limits of municipalities merged into the consolidated political subdivision shall be deemed to cease to exist upon consolidation except for the purposes of Sections 58-27-20 and 58-27-630.

(8)    In addition to the authority granted to the commission in the preceding provisions of this section, the commission shall have the authority to approve agreements between electric suppliers concerning corridor rights. This additional authority shall only apply in situations where all affected electric suppliers have reached an agreement concerning corridor rights. With respect to the agreements the commission shall approve the agreements if, after giving notice and an opportunity for hearing to interested parties, it finds the agreements to be fair and reasonable, but the commission shall not have the authority to alter or amend any agreement unless all affected electric suppliers agree to the alteration or amendment."

SECTION    4.    Section 58-27-660(2) of the 1976 Code is amended to read:

"(2)    The Public Service Commission commission shall have the authority and jurisdiction, after notice to all affected electric suppliers and the Office of Regulatory Staff and after hearing, if a hearing is requested by any affected electric supplier, the Office of Regulatory Staff, or any other interested party, to order any electric supplier which may reasonably do so to furnish electric service to any consumer who desires service from such electric supplier at any premises being served by another electric supplier, including service being provided under the provisions of Section 58-27-620(2) as it existed prior to Act [insert Act number] of 2007, or at premises which another electric supplier has the right to serve pursuant to other provisions of this article, and to order such other electric supplier to cease and desist from furnishing electric service to such premises, upon a finding that service to such consumer by the electric supplier which is then furnishing service, or which has the right to furnish service, to such premises, is or will be inadequate or undependable, and cannot or will not be made adequate and dependable within a reasonable time, or that the rates, conditions of service, or service regulations, applied to such consumer, are unreasonably discriminatory."

SECTION    5.    Section 58-27-865(A)(1) of the 1976 Code is amended to read:

"(A)(1)    The words 'fuel cost' as used in this section include the cost of fuel, fuel costs related to purchased power, and the cost of SO2 emission allowances as used and must be reduced by the net proceeds of any sales of SO2 emission allowances by the utility. The words 'fuel cost' as used in this section include the cost of fuel, the cost of fuel transportation, and fuel costs related to purchased power. 'Fuel cost' shall also include: the cost of ammonia, lime, limestone, urea, dibasic acid, and catalysts consumed in reducing or treating emissions; the cost of emission allowances, as used, including allowances for SO2, NOX, mercury, particulates, and carbon emissions; and, as permitted by order of the Public Service Commission of South Carolina, other variable environmental costs or environmental allowances required or caused to be required by federal or state government. Fuel costs must be reduced by the net proceeds of any sales of emission allowances by the utility."

SECTION    6.    Section 58-27-1210 of the 1976 Code is amended to read:

"Section 58-27-1210.    (A)    When ordered by the commission after a hearing, any electrical utility, distribution electric cooperative, or consolidated political subdivision, may be required to establish, construct, maintain and operate any reasonable extension of its existing facilities. If any such extension, however, will interfere with the service or system of any other electrical utility, distribution electric cooperative, or consolidated political subdivision, the commission may, on complaint and after hearing, either order the discontinuance of such extension or prescribe such terms and conditions with respect thereto as may be just and reasonable. Each electrical utility, distribution electric cooperative, and consolidated political subdivision, within areas assigned to it by the commission and within three hundred feet of its lines, as defined in Section 58-27-610, shall be obligated to comply with all requests for service in accordance with its schedules of rates and service rules and regulations on file with the commission.

(B)    Electric utilities, distribution cooperatives, or consolidated political subdivisions shall obtain commission approval of proposed construction of electric facilities only in the following situations:

(1)    where one electric supplier proposes to construct a line that would cross the line of another electric supplier;

(2)    where one electric supplier proposes to construct a line that is within seventy feet of another electric supplier's line at any point unless the lines are separated by a publicly maintained roadway; or

(3)    where an electric supplier proposes to construct or extend a line through the territory of another electric supplier to or into a municipality.

No commission approval is required under this subsection where all affected electric suppliers reach agreement on approval of the proposed construction or where either line is six hundred volts or less."

SECTION    7.    This act takes effect upon approval by the Governor.

This web page was last updated on Monday, June 22, 2009 at 2:51 P.M.