H 5440

South Carolina General Assembly
126th Session, 2025-2026
Bill 5440
Indicates Matter Stricken
Indicates New Matter
(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)
A bill
TO AMEND THE SOUTH
CAROLINA CODE OF LAWS BY ADDING CHAPTER 32 TO TITLE 58 SO AS TO ALLOW ELIGIBLE
CUSTOMERS TO PURCHASE ALL OR PART OF THEIR ELECTRICITY DEMAND FROM THIRD-PARTY
ELECTRIC SUPPLIERS; TO ESTABLISH RELATED TERMS, CONDITIONS, AND REQUIREMENTS
FOR ELIGIBLE CUSTOMERS, THIRD-PARTY ELECTRIC SUPPLIERS, AND INCUMBENT ELECTRIC
SUPPLIERS FOR  ELECTRIC SERVICES, INCLUDING TRANSMISSION SERVICES; TO ESTABLISH
CERTAIN COST REQUIREMENTS; AND TO ESTABLISH THE PUBLIC SERVICE COMMISSION
STANDARDS OF REVIEW, INCLUDING THE REQUIREMENT TO APPROVE A TARIFF CONTAINING A
PRO FORMA CONTRACT.
Be it enacted by the
General Assembly of the State of South Carolina:
SECTION 1.  Title 58 of the S.C. Code is amended by adding:
CHAPTER 32
Third-Party Electric Suppliers
    Section
58-32-10.  For purposes of this chapter:
    (1)
"Commission" means the Public Service Commission.
    (2)
"Customer-sited generation" means an electric generation facility, or
combination of electric generation facilities, located on an eligible customer's
premises and on the eligible customer's side of the delivery point with a
nameplate capacity that does not exceed the eligible customer's estimated
maximum demand for electric service and that is solely for the use of the
eligible customer. For purposes of this chapter, an owner of customer-sited
generation shall not be considered an electrical utility as defined in Section
58-27-10(7).
    (3)
"Delivery point" means the point where the facilities of the incumbent electric
supplier make physical contact with the facilities of the eligible customer.
    (4)
"Distribution services" means electric distribution services, along with any
other services required to safely and reliably deliver electric energy.
    (5)
"Distribution tariff" means the tariff filed with the commission or the rules
otherwise governing electric distribution services provided by an incumbent
electric supplier.
    (6)
"Electric generation facility" means a facility for generating electric power,
including renewable electric generation facilities and generation facilities
qualifying under the Public Utility Regulatory Policies Act of 1978 (PURPA),
Public Law 95-617, as amended.
    (7)
"Electric power" means electric energy, electric capacity or generation-related
ancillary services or any combination thereof.
    (8)
"Electric supplier" shall have the same meaning as in Section 58-27-610(1) and
shall also include the South Carolina Public Service Authority.
    (9)
"Eligible customer" means a new or existing individual nonresidential retail
electric customer that has an estimated maximum demand for electric service of
at least 100 kW at a single delivery point.
    (10)
"Full-requirements contract" is a contract whereby the eligible customer agrees
to purchase from an electric supplier all of their supply needs from or through
the electric supplier, regardless of quantity under contractual terms specific
in this contract.
    (11)
"Incumbent electric supplier" means an electric supplier or other person or
corporation that, pursuant to Article 5, Chapter 27, Title 58 furnishes or has
the right to furnish electric service to the eligible customer's premises.
    (12)
"Premises" means the building, structure, or facility to which electricity is
being or is to be furnished provided that two or more buildings, structures, or
facilities which are located on one tract or contiguous tracts of land and are
utilized by one electric consumer for farming, business, commercial,
industrial, institutional, or governmental purposes, shall together constitute
one "premises," except that any such building, structure, or facility shall
not, together with any other building, structure, or facility, constitute one "premises"
if the electric service to it is separately metered and the charges for such
service are calculated independently of charges for service to any other
building, structure, or facility.
    (13)
"Renewable electric generation facility" means a facility generating electric
power from solar photovoltaic resources, wind resources, hydroelectric
resources, geothermal resources, tidal and wave energy resources, hydrogen fuel
derived from renewable resources, combined heat and power derived from
renewable resources, or biomass resources, or any combination thereof.
Renewable electric generation facility also includes an electrical energy
storage system if the energy stored is generated from one of the resources
enumerated in this item.
    (14)
"Standby electric service rate" means a rate offered by the incumbent electric
supplier to provide replacement energy to an eligible customer when the power
supply to such customer purchased under a customer choice option is not
available.
    (15)
"Third-party electric supplier" means an electric supplier that is not the
incumbent electric supplier or a person or corporation that is not an electric
supplier but provides electricity generated by an electric generation facility.
A third-party electric supplier may be located within or without this State.
For purposes of this chapter, a third-party electric supplier shall not be
considered an electrical utility as defined in Section 58-27-10(7).
    (16)
"Transmission services" means electric transmission services, along with any
other services, required to safely and reliably deliver electric energy.
    (17)
"Transmission services provider" means any person or corporation owning or
operating electric transmission facilities in the State for transmitting,
delivering, or furnishing electricity.
    (18)
"Transmission tariff" means an open access transmission tariff, reciprocity
tariff, or other tariff to provide transmission services unbundled from other
services.
    Section
58-32-20.  (A) An eligible customer
shall be permitted to purchase all or part of its electricity demand from a
third-party electric supplier in accordance with the terms of this chapter and
federal laws and regulations. An eligible customer shall also be permitted to
obtain all or part of its electricity demand from customer-sited generation.
    (B) In
the event an eligible customer chooses to obtain all or part of its electric
demand from a third-party electric supplier, the eligible customer and the
incumbent electric supplier must enter into a contract that, at a minimum,
provides:
       (1)
the amount of electricity the eligible customer has elected or intends to elect
to receive from the third-party electric supplier and detailed arrangements for
its energy needs to be provided by the third-party electric supplier, up to and
including a full-requirements contract;
       (2)
if the eligible customer chooses to receive part of its electricity from the
incumbent electric supplier, a firm electricity demand that the eligible customer
will receive from the incumbent electric supplier and a commitment to purchase
that amount from the incumbent electric supplier;
       (3)
conditions for which the incumbent electric supplier may curtail or suspend
service to the eligible customer outside of energy emergency alert conditions
established by the North American Electric Reliability Corporation, if the eligible
customer is not on a standby electric service rate from the incumbent utility;
and
       (4)
the eligible customer must relieve the incumbent electric supplier from its
obligation to provide electricity for the amount to be provided by a
third-party electric supplier, including the incumbent electric supplier's
obligation to maintain reserves for the eligible customer.
    (C) In
the event an eligible customer chooses to obtain all or part of its electric
demand from a third-party electric supplier, the customer shall be responsible
for ensuring its energy needs are met. The incumbent electric supplier shall be
relieved of its obligation to provide energy to the eligible customer in
accordance with the terms of the contract described in subsection (B). However,
the eligible customer and the incumbent electric supplier may agree to
contractual terms, subject to commission review and approval for electrical utilities
with commission-approved rates in which the incumbent electric supplier may
supply energy to the eligible customer if the third-party electric supplier is
unable to meet the eligible customer's demands.
    Section
58-32-30.  The eligible customer must provide arrangements for firm
transmission services from the third-party electric supplier to have its
electricity delivered from the third-party electric supplier's sources to the
incumbent electric supplier's transmission system. The incumbent electric
supplier shall cooperate with the third-party electric supplier to provide
reasonable terms of transmission services, consistent with industry standards,
the Open Access Transmission Tariff, and applicable business practices.
    Section
58-32-40.  The incumbent electric supplier shall not be liable for any costs
associated with the eligible customer's service of electricity from a
third-party electric supplier, including transmission services from the
third-party electric supplier. However, the incumbent electric supplier shall
be responsible for transmission services to the eligible customer for
electricity on the incumbent electric supplier's transmission system.
    Section
58-32-50.  The incumbent electric supplier must have remote cutoff capabilities
in place for an eligible customer who chooses to obtain electricity from a
third-party electric supplier so that the incumbent electric supplier may
curtail or shut down its electric supply to the eligible customer in accordance
with the terms of the agreement. The eligible customer shall elect its
third-party electric supplier and shall pay all costs associated with its
election, if any.
    Section
58-32-60.  In the event an eligible customer requires transmission upgrades, a
determination must be made, in accordance with federal laws and regulations, as
to whether the transmission upgrade solely benefits the eligible customer or if
the upgrade benefits others who the incumbent electric supplier serves. For
transmission upgrades that solely benefit the eligible customer, that eligible
customer must pay the costs for the upgrade. If transmission upgrades benefit
more than solely the eligible customer, in terms of electric service, the
incumbent electric supplier and the eligible customer may agree for the
eligible customer to pay the incumbent electric supplier for a period of no
more than twenty years. If an eligible customer pays for the costs of the
transmission upgrade, then they will be exempt from the provisions of Section
58-32-70.
    Section
58-32-70.  In the event the incumbent electric supplier factored an eligible
customer's energy demand into its planning for electric generation or
transmission services, and invested capital accordingly that has been reflected
in its rates, and that eligible customer leaves the incumbent electric
supplier's territory, the eligible customer must continue to pay for capital
costs until the amount the eligible customer would have been responsible for is
paid in full or another customer assumes the amount. If growth in the amount of
supply being taken by customers of the incumbent electric supplier exceeds the
load of the departing eligible customer, this shall constitute a rebuttable
presumption that these costs have been assumed consistent with this section.
The commission must determine the eligible customer's financial obligation to
the incumbent electric supplier in a manner that does not affect residential or
other commercial or industrial electric rates. The commission must also
determine allowable cost shift methodologies to provide transparency around
legacy contracts and stranded assets.
    Section
58-32-80.  Incumbent utilities shall provide cost-of-service supply to eligible
customers or customer load returning from a period of retail access service on
the same terms, rates and priority as a new eligible customer requesting
service.
    Section
58-32-90.  (A) No later than January
1, 2027, the commission shall approve a tariff containing a pro forma contract
that an eligible customer may enter into consistent with this chapter and other
state and federal laws. Such a pro forma contract executed by an eligible
customer shall be binding on the incumbent electric supplier and the eligible
customer and shall fulfill the purposes of Section 58-32-20(B). Any exceptions
to the pro forma contract may be approved by the commission only as follows:
       (1)
an incumbent electric supplier and an eligible customer file an executed
contract which the commission shall approve unless contrary to the public
interest; or
       (2)
an eligible customer may represent to the commission its binding commitment to
be party to an unexecuted contract consistent with its right to receive
third-party supply under this chapter which the commission shall adopt if it
determines its provisions are just and reasonable.
    (B) The
commission shall not regulate any contract entered into between a third-party
electric supplier and an eligible customer.
SECTION 2.  This act takes effect upon approval
by the Governor.
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This web page was last updated on June 04, 2026 at 04:04 PM