S 446

South Carolina General Assembly
126th Session, 2025-2026
Bill 446
Indicates Matter Stricken
Indicates New Matter
(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)
Indicates Matter Stricken
Indicates New Matter
Committee Report
March 26, 2025
S. 446
Introduced
by Senators Young and Elliott
S. Printed 3/26/25--S.  [SEC
3/28/2025 2:36 PM]
Read the first time March 12, 2025
________
The committee on Senate Judiciary
To whom was referred a Bill (S. 446) to amend
the South Carolina Code of Laws so as to enact the "electric rate stabilization
act"; and by adding article 24 to chapter 27, title 58, so as to allow electric,
etc., respectfully
Report:
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, SECTION 2, by
striking Section 58-27-2760(2), (3), and (4) and inserting:
    (2) In cases where the monitoring report
indicates rate adjustments are required, or where it otherwise appears to the
commission or the Office of Regulatory Staff that an adjustment in rates may be
warranted under this article, the commission shall issue a Notice of Filing
annually on or before March 31 and require interested persons to file a
petition to intervene annually on or before May 3115. The commission shall
maintain a register of parties who have notified the commission in writing that
they wish to be provided with any Notice of Filing related to specified
utilities and the commission shall use reasonable efforts to provide such
parties with Notices of Filing by such utilities, provided that the failure to
do so shall not invalidate any subsequent proceedings. Intervenors shall have
discovery rights related to the matters set forth in Section 58-27-2730.
    (3) The Office of Regulatory Staff shall conduct
an audit of the monitoring report to ascertain the reasonableness and prudency
of all matters contained therein and specify any changes that the Office of
Regulatory Staff determines to be necessary to correct errors in the report or
to otherwise bring the report into compliance with this article. The Office of
Regulatory Staff's audit report shall be verified and provided to the
commission and to the utility and made available annually to all parties of record
no later than June 1. Other parties of record shall
also be allowed until June 1 of each year to file verified written comments and
submit documentary evidence to the commission and the Office of Regulatory
Staff in response to the utility's monitoring report.
    (4) The utility and
other parties of record shall be allowed until June 15 of each year to
file verified written comments and submit documentary evidence to the
commission and the Office of Regulatory Staff related to the Office of Regulatory Staff's audit report utility's monitoring report and may request a
non-evidentiary hearing before the commission concerning the Office of Regulatory Staff's report utility's monitoring report.
Renumber sections to conform.
Amend title to conform.
LUKE RANKIN for Committee.
_______
A bill
TO AMEND THE SOUTH CAROLINA CODE OF LAWS SO AS TO ENACT
THE "ELECTRIC RATE STABILIZATION ACT"; AND BY ADDING ARTICLE 24 TO CHAPTER 27,
TITLE 58, SO AS TO ALLOW ELECTRIC UTILITIES TO REQUEST THE PUBLIC SERVICE COMMISSION
TO ADJUST THEIR RATES ANNUALLY, ADJUST UTILITY RATES, ESTABLISH THE BASELINE
RATE ORDER AND REQUIREMENTS FOR ADJUSTMENTS IN RATES, PROVIDE PROTECTIONS FOR
CUSTOMERS, AND AUTHORIZE AN ADDITIONAL ELECTRIC UTILITY POSITION FOR THE OFFICE
OF REGULATORY STAFF.
    Amend Title To Conform
Be it enacted by the
General Assembly of the State of South Carolina:
SECTION 1.  This act may be cited as the "Electric Rate Stabilization Act".
SECTION 2.  Chapter 27, Title 58 of the S.C. Code is amended by
adding:
Article 24
Electric Rate Stabilization Act
    Section
58-27-2700.  A public utility providing retail electric service, in its
discretion and at any time, may elect to have the terms of this article apply
to its rates and charges for retail electric service, on a prospective basis,
by filing a notice of the election with the commission and on the same day and
by the same means serving a copy on the Office of Regulatory Staff. Upon
receipt of notice of the election, the commission shall proceed to make the
findings and establish the ongoing procedures required for adjustments in base
rates to be made under this article. In carrying out the procedures established
by this article with respect to such an election, the commission shall rely
upon and utilize the approved rates, charges, revenues, expenses, capital
structure, returns, and other matters established in the public utility's most
recent general rate proceeding pursuant to Section 58-27-860; provided,
however, that the most recent order must have been issued no more than five
years prior to the initial election to come under the terms of this article and
the utility must file an application for a general rate proceeding every five
years after such election. A public utility may combine an election under this
article with the filing of a rate proceeding pursuant to Section 58-27-860. The
commission shall include the findings required by this article in its rate
orders issued in the Section 58-27-860 proceedings, and the election shall
remain in effect until the next general rate proceeding.
    Section
58-27-2710.  The election by a utility to have the terms of this article apply
to its rates and charges for retail electric service once made shall remain in
effect until the next general rate proceeding for the public utility under
Section 58-27-860, at which time the public utility may then elect to continue
the applicability of this article to its rates and charges or elect to opt out
of the provisions of this article. The applicant may withdraw its request to
come under the terms of this article at any time before the entry of a final
order of the commission on the merits of the proceeding in which the election
is made or on a petition for rehearing in the proceeding.
    Section
58-27-2720.  In issuing its order pursuant to
Section 58-27-2710, and in addition to the other requirements of Section 58-27-2710,
if a proceeding pursuant to that section is required, then:
    (1)
the commission shall specify a range for the utility's cost of equity that
includes a band of fifty basis points (0.50 percentage points) below and fifty
basis points (0.50 percentage points) above the cost of equity on which rates
have been set; and
    (2)
the commission separately shall state the amount of the utility's net plant in
service, construction work in progress, accumulated deferred income taxes,
inventory, working capital, and other rate base components. It also shall state
the utility's depreciation expense, operating and maintenance expense, income
taxes, taxes other than income taxes, other components of income for return,
revenues, capital structure, cost of debt, overall cost of capital, and earned
return on common equity. The figures stated shall be those which the commission
has determined to be the appropriate basis on which rates were set in the
applicable orders.
    Section
58-27-2730.  The utility shall file with the
commission monitoring reports for each twelve-month period ending on March 31,
June 30, September 30, and December 31 of each year, the filings to be made no
later than the fifteenth day of the third month following the close of the
period. The utility shall serve a copy of such reports on the Office of
Regulatory Staff on the same day and by the same means as they are provided to
the commission. These quarterly monitoring reports shall include:
    (1)
the utility's actual net plant in service, construction work in progress,
accumulated deferred income taxes, inventory, working capital, and other rate
base components. The report shall also show the utility's depreciation expense,
operating and maintenance expense, income taxes, taxes other than income taxes,
other components of income for return, revenues, capital structure, cost of
debt, overall cost of capital, and earned return on common equity;
    (2)
all applicable accounting and pro forma adjustments historically permitted or
required by the commission for the utility in question or for similarly
situated utilities, authorized by general principles of utility accounting, or
authorized by accounting letters or orders issued by the commission. This
authorization may occur either in a general rate hearing or in any other type
of filing or hearing that the commission considers appropriate. However, other
parties shall be given sufficient opportunity to review and provide comments on
any proposed accounting letter or order issued after the initial order allowing
future base rate adjustments pursuant to this article;
    (3)
pro forma adjustments to annualize for the twelve-month period any rate
adjustments imposed pursuant to this article or other events affecting only
part of the period covered by the filing so that the annualization is required
to show the effects of those events on the utility's earnings going forward;
and
    (4)
pro forma or other adjustments required to properly account for atypical,
unusual, or nonrecurring events.
    Section
58-27-2740.  (A) In the monitoring
report filed for the twelve-month period ending December thirty-first of each
year, the utility shall provide additional schedules indicating the following
revenue calculations:
        (1)
if the utility's earnings exceed the upper end of the range established in the
order, then the utility shall calculate the reduction in revenue required to
lower its return on equity to the midpoint of the range established in the
order; or
        (2)
if the utility's earnings are below the lower range established in the order, then
the utility shall calculate the additional revenue required to increase its
return on equity to the midpoint of the range established in the order.
    (B) The
utility also shall provide a schedule that specifies changes in its tariff
rates required to achieve any indicated change in revenue.
    (C) The
proposed rate changes, filed by the utility, shall conform as nearly as is
practicable with the revenue allocation principles contained in the most recent
rate order.
    Section
58-27-2750.  The Office of Regulatory Staff shall review the monitoring report
filed pursuant to Section 58-27-2730 and Section 58-27-2740 to determine
compliance with its terms, taking into account the findings of any audit
conducted by the Office of Regulatory Staff concerning compliance with Section
58-27-2730 and Section 58-27-2740. The Office of Regulatory Staff shall propose
those adjustments it determines to be required to bring the report into
compliance with Section 58-27-2740. Based upon that report and the findings of
any audit conducted by the Office of Regulatory Staff, the commission shall
order the utility to make the adjustments to tariff rates necessary to achieve
the revenue levels indicated in Section 58-27-2740.
    Section
58-27-2760.  The procedures contained in this
section shall apply to monitoring reports related to the quarter ending
December 31.
    (1)
The utility shall file the monitoring reports annually with the commission and
Office of Regulatory Staff on or before March 15.
    (2)
In cases where the monitoring report indicates rate adjustments are required,
or where it otherwise appears to the commission or the Office of Regulatory
Staff that an adjustment in rates may be warranted under this article, the
commission shall issue a Notice of Filing annually on or before March 31 and
require interested persons to file a petition to intervene annually on or
before May 31.
    (3)
The Office of Regulatory Staff shall conduct an audit of the monitoring report
to ascertain the reasonableness and prudency of all matters contained therein
and specify any changes that the Office of Regulatory Staff determines to be
necessary to correct errors in the report or to otherwise bring the report into
compliance with this article. The Office of Regulatory Staff's audit report
shall be verified and provided to the commission and to the utility and made
available annually to all parties of record no later than June 1.
    (4)
The utility and other parties of record shall be allowed until June 15 of each
year to file verified written comments and submit documentary evidence to the
commission and the Office of Regulatory Staff related to the Office of
Regulatory Staff's audit report and may request a non-evidentiary hearing
before the commission concerning the Office of Regulatory Staff's report.
    (5)
On or before July 15 of each year, the commission shall issue an initial order
setting forth any changes required in the utility's request to adjust rates
under this article (the "Initial Order"). In the absence of such an
Initial Order, the electric rate adjustment contained in the utility's filing
shall be considered granted as filed.
    (6)
Any electric rate adjustments authorized under the terms of this article shall
take effect for all bills rendered on or after the first billing cycle of
August of that year.
    Section
58-27-2770.  In calculating its revenue requirement under Section 58-27-2730,
and apart from the recovery of a return on construction work in progress, an
electric utility may not include in plant service its investments in any new
electric generating facility of more than two hundred fifty megawatts, or the
costs associated with operating such a facility, except through a general
electric rate proceeding under Section 58-27-860 and Section 58-27-870 or
through a contested case proceeding for the limited purpose of establishing the
prudence of the facility under this section.
    Section
58-27-2780.  Within thirty days of the issuance of an Initial Order pursuant to
Section 58-27-2760, or within thirty days of the failure by the commission to
issue an order as required pursuant to Section 58-27-2760, any aggrieved party
may petition the commission for review of the Initial Order or failure to issue
an order and all interested parties of record shall have a right to be heard at
an evidentiary hearing on the matter. The party shall serve a copy of such
petition on the Office of Regulatory Staff and other parties of record on the
same day and by the same means as it is provided to the commission.
    Section
58-27-2790.  (A) After conducting
the hearing required by Section 58-27-2780, the commission shall issue a final
order that:
        (1)
sets forth any changes that are required to the rates approved in the Initial
Order issued under Section 58-27-2760(5);
        (2)
determines the amount of any overcollection or undercollection by the utility
that resulted from collection of the rates authorized in the Initial 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 any overcollection, or a surcharge
to collect the amount of any undercollection that arose during the time that
the rates approved in the Initial Order were collected, and requires the
utility to apply the credit or surcharge until such time as the overcollection
or undercollection is exhausted.
    (B) The
commission shall issue any final order required under this section by December
thirty-first of the year in which the monitoring report was filed. The order
shall make the corrected rates and the credit or surcharge, if any, effective
as of the first billing cycle of May of that year.
    (C) The
provisions of Sections 58-27-2150 and 58-27-2310 concerning rehearing and
appeal shall apply to the orders issued pursuant to this section.
    Section
58-27-2800.  The review of Initial Orders pursuant to Section 58-27-2780 and Section
58-27-2790 is limited to issues related to compliance with the terms of this
article. Matters determined in orders issued pursuant to Section 58-27-2720 are
not subject to review except in full rate proceedings pursuant to Section 58-27-2740.
Any proceedings pursuant to this article are without prejudice to the right of
the commission to issue, or any interested party to request issuance of, a rule
to show cause why a full rate proceeding should not be initiated, nor does this
article limit the right of a utility to file an application pursuant to Section
58-27-870 for an adjustment to its rates and charges, nor does it impose the
restrictions on filings contained in Section 58-27-870(E).
    Section
58-27-2810.  (A) The Office of
Regulatory Staff is authorized to create additional positions as the General
Assembly may provide in the annual General Appropriations Act for the purpose
of performing its duties under this article; however, no more than two positions
for each electric utility regulated pursuant to this article may be authorized.
All salaries, benefits, expenses, and charges incurred by the Office of
Regulatory Staff for these positions must be borne by the electric utilities
regulated pursuant to this article.
    (B) On
or before the first day of July in each year, the Department of Revenue must
assess each electric utility regulated pursuant to this article an equal
portion of these salaries, benefits, expenses, and charges on June 30 preceding
that on which the assessment is made which is due and payable on or before July
15. The assessments must be charged against the electric utilities by the
Department of Revenue and collected by the department in the manner provided by
law for the collection of taxes from the electric utilities, including the
enforcement and collection provisions of Article 1, Chapter 54 of Title 12 and
paid, less the Department of Revenue actual incremental increase in the cost of
administration into the state treasury as other taxes collected by the
Department of Revenue for the State. These assessments are in addition to any
amounts assessed pursuant to Section 58-4-60. These assessments must be
deposited in a special fund with the State Treasurer's Office from which the
salaries, benefits, expenses, and charges shall be paid.
    (C) The
Office of Regulatory Staff must annually certify to the Department of Revenue
on or before May 1 the amounts to be assessed.
SECTION 3.  This act takes effect upon approval
by the Governor.
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