Reference is to Printer's Date 4/15/14-S.
Amend the bill, as and if amended, by deleting all after the enacting words and inserting:
/ SECTION 1. Section 58-27-865(A) of the 1976 Code is amended to read:
"Section 58-27-865.
(A)(1) The term 'fuel cost' as used in
this section includes the cost of fuel, cost of fuel
transportation, and fuel costs related to purchased power.
'Fuel cost' also shall include the following variable
environmental costs: (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 allowance 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, if it determines such
action to be just and reasonable, allow the variable costs of
other environmental reagents, other environmental allowances or
emissions-related taxes to be recovered as a component of fuel
costs, but only to the extent these variable environmental costs
are required to be incurred in relation to the consumption of
fuel and the air emissions caused thereby. Alternatively, the
commission may decide that the costs related to these other
variable environmental costs may only be recovered through base
rates established under Sections 58-27-860 and 58-27-870. All
variable environmental costs included in fuel costs shall be
recovered from each class of customers as a separate
environmental component of the overall fuel factor. The
specific environmental component for each class of customers
shall be determined by allocating such variable environmental
costs among customer classes based on the utility's South
Carolina firm peak demand data from the prior year. Fuel costs
must be reduced by the net proceeds of any sales of emission
allowances by the utility. If capacity costs are permitted
to be recovered through the fuel factor, such costs shall be
allocated and recovered from customers under a separate capacity
component of the overall fuel factor based on the same method
that is used by the utility to allocate and recover variable
environmental costs. The incremental and avoided costs of
distributed energy resource programs and net metering as
authorized and approved under Chapters 39 and 40, Title 58 shall
be allocated and recovered from customers under a separate
distributed energy component of the overall fuel factor that
shall be allocated and recovered based on the same method that
is used by the utility to allocate and recover variable
environmental costs.
(2)
In order to clarify the intent of this section, 'fuel
costs related to purchased power', as used in subsection (A)(1)
shall include:
(a)
costs of 'firm generation capacity purchases', which are
defined as purchases made to cure a capacity deficiency or to
maintain adequate reserve levels; costs of firm generation
capacity purchases include the total delivered costs of firm
generation capacity purchased and shall exclude generation
capacity reservation charges, generation capacity option
charges, and any other capacity charges;
(b)
the total delivered cost of economy purchases of electric
power including, but not limited to, transmission charges;
'economy purchases' are defined as purchases made to displace
higher cost generation, at a price which is less than the
purchasing utility's avoided variable costs for the generation
of an equivalent quantity of electric power; and
(c)
avoided costs under the Public Utility
Regulatory Policy Act of 1978, also known as PURPA."
SECTION 2. Title 58 of the 1976 Code is amended by adding:
Section 58-39-110. This chapter may be cited as the 'South Carolina Distributed Energy Resource Act'. The goals of this chapter are to promote the establishment of a reliable, efficient, and diversified portfolio of distributed energy resources for the State.
Section 58-39-120.
As used in this chapter:
(A) 'AC' means
alternating current, as measured at the point of interconnection
of the renewable energy facility to the interconnecting
electrical utility's transmission or distribution system.
(B) 'Avoided costs'
means payments for purchases of electricity made according to an
electrical utility's most recently approved or established
avoided cost rates in this State or rates negotiated pursuant to
PURPA, in the year the costs are incurred, for purchases of
electricity from qualifying facilities pursuant to Section 210
of the Public Utility Regulatory Policies Act, said costs to be
calculated as set forth in Section 58-39-140(A)(1).
(C) 'Distributed energy
resource' (DER) means demand- and supply-side resources that can
be deployed throughout the system of an electrical utility to
meet the energy and reliability needs of the customers served by
that system, including, but not limited to, renewable energy
facilities, managed loads (including electric vehicle charging),
energy storage, and other measures necessary to incorporate
renewable generation resources, including load management and
ancillary services, such as reserves, voltage control, and
reactive power, and black start capabilities.
(D) 'Electrical
utility' shall be defined as in Section 58-27-10 of the S.C.
Code, provided, however, that electrical utilities serving less
than 100,000 customer accounts shall be exempt from the
provisions of this chapter.
(E) 'Renewable energy
facility' means a facility that generates electric power by the
use of a renewable generation resource that was placed in
service for use by or to provide power to an electrical utility
after January 1, 2014. A 'renewable energy facility' shall also
mean any incremental capacity installed after January 1, 2014,
that delivers energy from a renewable generation resource.
(F) 'Renewable
generation resource' means solar photovoltaic and solar thermal
resources, wind resources, low-impact hydroelectric resources,
geothermal resources, tidal and wave energy resources, recycling
resources, hydrogen fuel derived from renewable resources,
combined heat and power derived from renewable resources, and
biomass resources.
Section 58-39-130. The
purpose of this section is to establish the 'distributed energy
resource program' for this State. To accomplish the goals of
this chapter:
(A) An electrical
utility may apply to the Public Service Commission for approval
to participate in the distributed energy resource program.
After conducting a hearing on the application, the commission
may approve such application if the applicant demonstrates that
the program will further the goals of this chapter as set forth
in Section 58-39-110.
(1)
The application shall, at a minimum, include the following
information: a statement of the specific goals to be addressed
by the program and the benefits to be achieved from its
implementation;
(a)
a description of the principal elements of the program and
a statement of the benefits to be achieved from the
implementation of each of those elements;
(b)
a description of the electrical utility's planned actions
to implement the program and the anticipated timing of those
actions;
(c)
where relevant, the locational benefits and costs of
proposed distributed energy resources proposed to be located on
the distribution and transmission system, including, but not
limited to, reductions or increases in local generation capacity
needs, and avoided or increased investments in distribution
infrastructure;
(d)
any proposed customer programs and changes in tariffs, or
other mechanisms that support the prudent, efficient, and
reliable deployment of cost-effective distributed energy
resources and the goals of the distributed energy resource
program as defined in Section 58-39-110, including but not
limited to, programs intended to support access to distributed
energy resources for tax-exempt entities;
(e)
additional utility expenditures necessary to integrate
cost-effective distributed energy resources into distribution
and transmission planning;
(f)
where relevant, a description and evaluation of any
barriers to the deployment of distributed energy resources as
envisioned in the plan, including, but not limited to, safety
standards related to technology or operation of the distribution
circuit in a manner that ensures reliable service;
(g)
a schedule of the projected incremental costs anticipated
to implement the electrical utility's distributed energy
resource program for each year of the subject period; and
(h)
an estimate of costs to be incurred pursuant to the
distributed energy resource program as defined in Section
58-39-130 and an estimate of those costs to be recovered
pursuant to Sections 58-27-865 and 58-39-140 to fully recover
the projected costs of the program.
(2)
Upon approval of its application, an electrical utility
shall be permitted to recover its costs related to the approved
distributed energy resource program pursuant to Sections
58-27-865 and 58-39-140 to the extent those costs are reasonably
and prudently incurred to implement an approved program.
Approval of a program, measure, or investment shall constitute a
finding by the commission that it is just, reasonable, and
prudent for the utility to implement the program, measure or
investment as approved until such time as the commission orders
otherwise.
(3)
The Office of Regulatory Staff, an electrical utility, or
any other interested party may file a petition for amendment of
a distributed energy resource program at any time. The
commission may hold a hearing on such petition if it determines
that the extent of the proposed changes warrant a hearing. The
petition for amendment shall include the information set forth
in Section 58-39-130(A)(1) to the extent that such information
is relevant to the amendments proposed.
(4)
The effect of a decision to amend or terminate an approved
distributed energy resource program, investment, or measure
shall be prospective only and costs incurred prior to that
decision shall be recoverable.
(5)
An electrical utility may invest in distributed energy
resources or programs outside of an approved distributed energy
resource program under this chapter. The utility may seek
recovery of the costs associated with such programs and
resources under the ratemaking principles and procedures
generally applicable to electrical utilities outside of this
chapter. The fact that such resources are not part of an
approved distributed energy resource program shall create no
negative inference concerning their recoverability under other
ratemaking provisions.
(6)
An electrical utility may file an application to
participate in a distributed energy resource program at any
time.
(B) An electrical
utility may implement a distributed energy resource program by
one or more of the following:
(1)
investment in distributed energy resources located in
South Carolina as defined in Section 58-39-120;
(2)
purchase of power from renewable energy facilities located
in South Carolina;
(3)
investment in technologies necessary to mitigate the
effects of variable renewable energy generation through
provision of ancillary services, including, but not limited to
reserves, voltage control, and reactive power in South Carolina;
and
(4)
investment in technologies that enhance load management
including, but not limited to, electric vehicle charging and
energy storage.
(C) Any distributed
energy resource program proposed by an electrical utility shall,
at a minimum, result in development by 2021 of renewable energy
facilities located in South Carolina in an aggregated amount of
installed nameplate generation capacity equal to at least two
percent of the previous five-year average of the electrical
utility's South Carolina retail peak demand. All investments
and procurements proposed by an electrical utility under its
program shall be reviewed by the commission before the program
is implemented to determine whether the investments or
procurements are reasonable and prudent in light of the nature
of the resources to be acquired, the goals of the utility's
distributed energy resources program and alternatives available
in the market. In the proposed distributed energy resource
program, the electrical utility:
(1)
shall submit a plan to invest in or procure power from
renewable energy facilities located in South Carolina, each with
a nameplate capacity that is greater than one thousand kilowatts
(1,000 kW AC) but no greater than ten thousand kilowatts (10,000
kW AC) in an aggregated amount of installed nameplate generation
capacity equal to one percent of the electrical utility's
previous five-year average of the electrical utility's South
Carolina retail peak demand.
(2)
shall establish a program, to be implemented no later than
one year from the initial approval of a distributed energy
resource program, to encourage customers of the electrical
utility to purchase or lease renewable energy facilities, each
no greater than one thousand kilowatts (1,000 kW AC) in
nameplate capacity in an aggregated amount of installed
nameplate generation capacity equal to one percent of the
electrical utility's previous five-year average of the
electrical utility's South Carolina retail peak demand with no
less than twenty-five percent of the capacity being from
renewable energy facilities each no greater than twenty
kilowatts (20 kW AC) in nameplate capacity. Said program shall
be implemented according to the following options:
(a)
an incentive to encourage residential
customers of the electrical utility to purchase or lease
renewable energy facilities in order to become an eligible
customer-generator, as defined in Section 58-40-10.
(b)
an incentive to encourage customers of the electrical
utility to purchase or lease renewable energy facilities, each
no greater than one thousand kilowatts (1000 kW AC) in nameplate
capacity, which are intended primarily to offset part or all of
an electrical utility customer's own electrical energy
requirements.
(3)
shall establish a program, to be implemented no later than
one year from the initial approval of a distributed energy
resource program, to support access to distributed energy
resources for South Carolina entities holding tax-exempt status
under the Internal Revenue Code and governmental entities and
instrumentalities.
(D) Upon satisfaction
of the minimum aggregate generation capacity targets specified
in subsection (C), the electrical utility may invest in
renewable energy facilities located in South Carolina, each with
a nameplate capacity that is less than ten thousand kilowatts
(10,000 kW AC) and greater than one thousand kilowatts (1,000 kW
AC), with a cumulative installed nameplate generation capacity
equal to one percent of the previous five-year average of the
electrical utility's South Carolina retail peak demand.
(E) If the application
of the provisions of this chapter to any wholesale electrical
contract executed on or before the effective date of this act is
determined to impair unlawfully any term of such contract or to
add material costs to either party, then that contract will be
exempt from the terms of this chapter to the extent necessary to
cure such impairment or to avoid the imposition of additional
material costs.
Section 58-39-140. (A)
For purposes of this section, 'incremental
costs' means all reasonable and prudent costs incurred by an
electrical utility to implement a distributed energy resource
program pursuant to the provisions of Section 58-39-130 of this
chapter, including, but not limited to:
(1)
The cost an electrical utility incurs in excess of the
electrical utility's avoided cost rate, as defined in this
section. All costs paid under avoided cost rates, or negotiated
rates pursuant to PURPA, whichever is lower, shall be considered
an avoided cost under Section 58-39-120(B) and shall be
recovered under Section 58-27-865.
(2)
The full cost of an electrical utility's investment in
non-generating distributed energy resources, such as, but not
limited to, energy storage devices.
(3)
The electrical utility's weighted average cost of capital
as applied to the electrical utility's investment in distributed
energy resources. The weighted average cost of capital means
the utility's weighted average cost of (a) common equity, as
most recently approved by the commission, and (b) long term
debt. The capital costs of the resource shall include, but not
be limited to, all reasonable and prudent costs associated with
the design, siting, selection, acquisition, licensing,
permitting, constructing, testing, and placing into service of
the resource as well as capital maintenance and other capital
costs associated with its repair, renewal, replacement, and
upgrading. Such costs shall also include all reasonable and
prudent costs incurred to expand, upgrade, or reconfigure
transmission or distribution systems to accommodate power flows
from the resource or to respond to other requirements placed by
the resource on the electrical system, along with all other
costs properly considered capital costs for a project or asset
under generally accepted principles of regulatory or utility
accounting or accounting orders issued by the commission.
Capital costs shall include the utility's weighted average cost
of equity and long-term debt applied to the balance of
construction work in progress for which capital costs are not
yet being collected through a fuel cost component approved under
this chapter and Section 58-27-865.
(4)
Operating and maintenance expenses, taxes, insurance,
depreciation, overheads, and all other expenses properly
considered to be expenses associated with a project, asset, or
program under generally accepted principles of regulatory, or
utility accounting or accounting orders issued by the
commission, provided that such expenses shall be recorded as a
capital cost of the resource or program until such time as a
fuel cost component providing for their recovery goes into
effect.
(5)
The electrical utility's incremental labor cost associated
with implementing a distributed energy resource program.
(B) Upon approval of a
distributed energy resource program, the commission shall direct
the electrical utility which incurs incremental or avoided costs
to submit to the commission and to the Office of Regulatory
Staff, within such time and in such form as the commission may
designate, its estimates of incremental or avoided costs for the
next twelve months. The commission may hold a public hearing at
any time between the twelve-month reviews to determine whether
an increase or decrease in the fuel cost component designed to
recover incremental or avoided costs should be granted. Upon
conducting public hearings in accordance with law, the
commission shall direct the electrical utility to place in
effect an amount designed to recover, during the succeeding
twelve months, the incremental or avoided costs determined by
the commission to be appropriate for that period, adjusted for
the over-recovery or under-recovery from the preceding
twelve-month period. This amount shall be a component of the
fuel cost factor established under Section 58-27-865(A). The
commission shall direct the electrical utility to send notice to
the utility customers with the antecedent billing of the time
and place of any public hearing to be held pursuant to this
subsection, and the commission shall again direct the electrical
utility to send notice to the utility customers with the next
billing if the utility is granted a rate increase by the
commission.
(C) Upon request by the
Office of Regulatory Staff or the electrical utility, a public
hearing must be held by the commission coincident with the fuel
cost recovery proceeding required under Section 58-27-865 to
determine whether an increase or decrease in the fuel cost
component designed to recover incremental or avoided costs
should be granted. If the request is by an electrical utility
for an increase or decrease in the fuel cost factor, the
commission shall direct the utility to send notice of the
request and hearing to all customers with the next billing, and
if the commission grants the rate request subsequent to the
request and hearing, the commission shall direct the utility to
send notice of the amount of the increase or decrease to all
customers with the next billing.
(D) The commission is
authorized to promulgate, in accordance with the provisions of
this section, all regulations necessary to allow the recovery by
electrical utilities of all their prudently incurred distributed
energy resource program implementation costs incurred pursuant
to Sections 58-39-130 and 58-39-140 of this chapter.
(E) No later than July
31, 2016, the Office of Regulatory Staff shall prepare and
submit to the General Assembly with copies to all members of the
State Regulation of Public Utilities Review Committee a report
on the implementation of this Chapter and Chapter 40 of this
Title. The Office of Regulatory Staff shall update this report
no later than July 31, 2017 and each two years thereafter. Upon
receipt and review of these reports, and in consultation with
the General Assembly, the Public Utilities Review Committee
shall make recommendations to the Office of Regulatory Staff as
to any changes in implementation that may be needed.
(F) The authorization
to propose or approve new components of DER programs shall
sunset and expire on January 1, 2021, provided however that the
cost recovery provisions of this chapter shall remain in force
until the costs associated with all approved DER program
components have been recovered.
Section 58-39-150. For the protection of consumers and to ensure that the cost of DER programs do not exceed a reasonable threshold, the commission must not approve a DER plan in which the total incremental costs to be incurred by an electrical utility and recovered from the electrical utility's South Carolina retail customer classes exceeds the following annual amounts per number of accounts for costs that are incurred on or after January 1, 2014: residential: twelve dollars; commercial: one hundred twenty dollars; and industrial; twelve hundred dollars. The application of these caps to residential, commercial, and industrial accounts will be as set forth in the electrical utility's approved distributed energy resource program."
SECTION 3. Title 58 of the 1976 Code is amended by adding:
Section 58-40-10.
As used in this section:
(A) 'Commission' means
the Public Service Commission of the State of South
Carolina.
(B) 'Customer' means
the person who is named on the electrical utility bill for the
premises.
(C)
'Customer-generator' means the owner, operator, lessee, or
customer-generator lessee of an electric energy generation unit
which:
(1)
generates electricity from a renewable energy
resource;
(2)
has an electrical generating system with a capacity of:
(a)
not more than the lesser of one thousand kilowatts (1,000
kW AC) or one hundred percent of contract demand if a
nonresidential customer, or
(b)
not more than twenty kilowatts (20 kW AC) if a residential
customer;
(3)
is located on a single premises owned, operated, leased,
or otherwise controlled by the customer;
(4)
is interconnected and operates in parallel phase and
synchronization with an electrical utility and complies with the
applicable interconnection standards;
(5)
is intended primarily to offset part or all of the
customer-generator's own electrical energy requirements; and
(6)
meets all applicable safety, performance, interconnection,
and reliability standards established by the commission, the
National Electrical Code, the National Electrical Safety Code,
the Institute of Electrical and Electronics Engineers,
Underwriters Laboratories, the federal Energy Regulatory
Commission, and any local governing authorities.
(D) 'Electrical
utility' shall be defined as in Section 58-27-10; provided,
however, that electrical utilities serving less than one hundred
thousand customer accounts shall be exempt from the provisions
of this chapter.
(E) 'Net energy
metering' means using metering equipment sufficient to measure
the difference between the electrical energy supplied to a
customer-generator by an electrical utility and the electrical
energy supplied by the customer-generator to the electricity
provider over the applicable billing period.
(F) 'Renewable energy
resource' means solar photovoltaic and solar thermal resources,
wind resources, hydroelectric resources, geothermal resources,
tidal and wave energy resources, recycling resources, hydrogen
fuel derived from renewable resources, combined heat and power
derived from renewable resources, and biomass resources.
Section 58-40-20. (A)
Net energy metering rates approved by the
commission under the terms of this chapter shall be the
exclusive net energy metering rates available to
customer-generators. Upon commission approval, such net energy
metering rates shall supersede all prior net energy metering
rates. Customer-generators whose net energy metering facilities
were energized prior to the availability of net energy metering
rates approved by the commission under the terms of this chapter
may remain in historic net energy metering programs through
December 31, 2020.
(B) An electrical
utility shall make net energy metering available to
customer-generators on a first-come, first-served basis until
the total nameplate generating capacity of net energy metering
systems equals two percent of the previous five-year average of
the electrical utility's South Carolina retail peak demand. No
electrical utility shall be required to approve any application
for interconnection from net energy metering customer generators
if the total rated generating capacity of all applications for
interconnection from net energy metering customer generators
already approved to date by the electrical utility equals or
exceeds two percent of the previous five-year average of the
electrical utility's South Carolina retail peak demand.
(C) If determined to be
prudent by the commission, the electrical utility may furnish,
install, own, and maintain metering equipment needed to measure
the kilowatt-hours purchased by the customer-generator from the
utility, the kilowatt-hours generated or delivered to the
electrical utility, and, if applicable under the utility's
tariffs, to measure the kilowatt demand delivered by the
electrical utility to the customer-generator. The electrical
utility shall have the right to install special metering and
load research devices on the customer-generator's equipment and
the right to use the customer-generator's communication devices
for communication with electrical utility's and the
customer-generator's equipment.
(D) The net electrical
energy measurement shall be calculated in the following
manner:
(1)
For a customer-generator, an electrical utility shall
measure the net electrical energy produced or consumed during
the billing period in accordance with normal metering practices
for customers in the same rate class, either by employing a
single, bidirectional meter that measures the amount of
electrical energy produced and consumed, or by employing
multiple meters that separately measure the customer-generator's
consumption and production of electricity;
(2)
If the electricity supplied by the electrical utility
exceeds the electricity generated by the customer-generator
during a billing period, the customer-generator shall be billed
for the net electricity supplied by the electrical utility in
accordance with normal practices for customers in the same rate
class;
(3)
Any energy generated by the customer-generator that
exceeds the energy supplied by the electrical utility during a
billing period shall not be used to offset the non-volumetric
electricity charges for that billing period;
(4)
The utility shall maintain an account of any net excess
kWh credits accruing from the customer-generator's excess
generation and allow those kWh credits to be used to offset the
customer-generator's energy usage during future billing periods.
Annually, the utility shall pay the customer-generator for any
accrued net excess generation at the utility's avoided cost for
qualified facilities, zeroing-out the customer-generator's
account of net excess kWh credits.
(E) Each electrical
utility shall submit an annual net metering report to the Public
Service Commission, with a copy to the Office of Regulatory
Staff, including the following information for the previous
calendar year:
(1)
the total number of customer-generator facilities;
(2)
the estimated gross generating capacity of its net-metered
customer-generators;
(3)
the estimated net kilowatt-hours received from
customer-generators.
(F) Any and all costs
prudently incurred pursuant to the provisions of this chapter by
an electrical utility as approved by the commission and any and
all commission approved benefits conferred by a
customer-generator shall be recoverable by each entity
respectively in the electrical utility's rates in accordance
with these provisions:
(1)
The electrical utility's general rates, tariffs, and any
additional monthly charges or credits, in addition to any other
charges or credits authorized by law, to recover the costs and
confer the benefits of net energy metering shall include such
measures necessary to ensure that the electrical utility
recovers its cost of providing electrical service to
customer-generators and customers who are not
customer-generators.
(2)
Any charges or credits prescribed in item (1), and the
terms and conditions under which they may be assessed shall be
in accordance with a methodology established through the
proceeding described in item (4). The methodology shall be
supported by an analysis and calculation of the relative
benefits and costs of customer generation to the electrical
utility, the customer-generators, and those customers of the
electrical utility that are not customer-generators.
(3)
Upon approval of the methodology provided for in item (4),
each electrical utility shall file its analysis of the net cost
to serve customer-generators using the approved methodology and
shall propose new net energy metering rates.
(4)
No later than thirty days after the enactment of this act,
the commission shall initiate a generic proceeding for purposes
of implementing the requirements of this chapter with respect to
the net energy metering rates, tariffs, charges, and credits of
electrical utilities, specifically to establish the methodology
to set any necessary charges and credits as required under items
(1) and (2). All interested parties shall be allowed to
participate. In its notice initiating such proceeding the
commission must require the electrical utilities propose
methodologies required by item (1) and shall allow intervening
parties to propose methodologies required by item (2). The
Office of Regulatory Staff, pursuant to the requirements of
Section 58-4-50, shall represent the public interest in this
proceeding and shall serve as a facilitator to resolve disputes
and issues between the parties to this proceeding.
(5) In evaluating the
benefits and costs of customer generation as required by item
(2), and the methodology for calculating such benefits and
costs, the Office of Regulatory Staff may engage third parties
with relevant prior experience conducting distributed generation
cost-benefit studies. The cost of any experts and consultants
engaged by the Office of Regulatory Staff for purposes of this
proceeding shall be assessed to the electrical utilities pro
rata based on their five-year average of retail peak demand and
shall be recoverable by those electrical utilities through the
base rate for fuel costs established pursuant to Section
58-27-86.
(6) In the event that
the commission determines that future benefits from net energy
metering are properly reflected in net metering rates because
they provide quantifiable benefits to the utility system, its
customers, or both, and to the degree such benefits are not then
being recovered by the electrical utility in its base rates,
then such future benefits shall be deemed an avoided cost and
shall be recoverable pursuant to Section 58-27-865 by the
electrical utility as an incremental cost of the distributed
energy resource program.
(G) In no event shall
the net energy metering provisions of this chapter be construed
as allowing customer-generators to engage in meter aggregation,
group/joint billing projects, and/or virtual net metering.
(H) The commission
shall approve an electrical utility's proposed net energy
metering rates that meet the requirements of this chapter,
provided that the commission has previously approved that
electrical utility's application to participate in a distributed
energy resource program pursuant to Chapter 39, Title 58."
SECTION 4. Chapter 27, Title 58 of the 1976 Code is amended by adding:
Section 58-27-2600. As
used in this article:
(A) 'Customer-generator
lessee' means the lessee of a renewable electric generation
facility which:
(1)
generates electricity from a renewable energy
resource;
(2)
has an electrical generating system with a capacity of:
(a)
not more than the lesser of one thousand kilowatts (1,000
kW AC) or one hundred percent of contract demand if a
nonresidential customer, or
(b)
not more than twenty kilowatts (20 kW AC) if a residential
customer;
(3)
is located on a premises or residence owned, operated,
leased, or otherwise controlled by the customer-generator lessee
that is also the premises or residence served by the renewable
electric generation facility;
(4)
is interconnected and operates in parallel phase and
synchronization with the retail electric provider for the
premises or residence and has been approved by that retail
electric provider;
(5)
is intended only to offset part or all of the
customer-generator lessee's own retail electrical energy
requirements for each respective premises or residence or to
enable the customer-generator lessee to obtain a credit for or
engage in the sale of energy from the renewable electric
generation facility to that customer-generator lessee's retail
electric provider or its designee; and
(6)
meets all applicable safety, performance, interconnection,
and reliability standards established by the commission or the
retail electric provider, the National Electrical Code, the
National Electrical Safety Code, the Institute of Electrical and
Electronics Engineers, Underwriters Laboratories, the federal
Energy Regulatory Commission, and any local governing
authorities.
(B) 'Retail electric
provider' means an electrical utility as defined in Section
58-27-10 and also means other entities that provide retail
electric service in South Carolina, but excluding electric
cooperatives organized under the laws of a state other than
South Carolina.
Section 58-27-2610. (A)
An entity that owns a renewable electric
generation facility, located on a premises or residence owned or
leased by an eligible customer-generator lessee to serve the
electric energy requirements of that particular premises or
residence or to enable the customer-generator lessee to obtain a
credit for or engage in the sale of energy from the renewable
electric generation facility to that customer-generator lessee's
retail electric provider or its designee, shall be permitted to
lease such facility exclusively to a customer-generator lessee
under a lease, provided that the entity complies with the terms,
conditions, and restrictions set forth within this article and
holds a valid certificate issued by the Office of Regulatory
Staff. An entity owning renewable electric generation facilities
in compliance with the terms of this article shall not be
considered an 'electrical utility' under Section 58-27-10 if the
renewable electric generation facilities are only made available
to a customer-generator lessee for the customer-generator
lessee's use on the customer-generator lessee's premises or the
residence where the renewable electric generation facilities are
located, or for the sale of energy to that customer-generator
lessee's retail electric provider or its designee, and pursuant
to a lease.
(B)
All customer-generator lessees that interconnect renewable
electric generation facilities to a retail electric provider's
transmission or distribution system must enroll in the
applicable rate schedules made available by that retail electric
provider, subject to the participation limitations set forth
therein or in the policy adopted by the retail electric provider
not subject to Section 58-40-20(B), and the customer-generator
lessee shall otherwise comply with all requirements of Section
58-40-10 et seq., or the policy adopted by the retail electric
provider not subject to Section 58-40-10 et seq.
(C) To comply with the
terms of this article, each customer-generator lessee renewable
electric generation facility shall serve only one premises or
residence, and shall not serve multiple customer-generator
lessees or multiple premises or residences.
(D) Any lease of a
renewable electric generation facility not entered into pursuant
to this article is prohibited. The owner of a renewable
electric generation facility subject to any lease entered into
outside of this program shall be considered an 'electrical
utility' under Section 58-27-10.
(E) This section shall
not be construed as allowing any sales of electricity from
renewable electric generation facilities directly to any
customer of any retail electric provider by the owner. This
article shall not be construed as abridging or impairing any
existing rights or obligations, established by contract or
statute, of retail electric providers to serve South Carolina
customers. The electrical output from any renewable electric
generation unit leased pursuant to this program shall be the
sole and exclusive property of the customer-generator
lessee.
(F) An entity and its
affiliates that lawfully provide retail electric service to the
public may offer leases of renewable generation facilities in
those areas or territories where it provides retail electric
service. No such provider or affiliate shall offer or enter
into leases of renewable generation facilities in areas served
by another retail electric provider.
(G) The costs an
electrical utility incurs in marketing, installing, owning, or
maintaining solar leases through its own leasing programs as a
lessor shall not be recovered from other non-participating
electrical utility customers through rates, provided, however,
that an electrical utility and the customer-generator lessees
which lease facilities from it may participate on an equal basis
with other lessors and lessees in any applicable programs
provided for under Chapter 39 of this title, S.C. Code Ann.
Sections 58-39-110 et seq. and nothing in this section shall
prevent the reasonable and prudent costs of a utility's
distributed energy resource programs, including the provision of
incentives to its own lessees and other allowable costs, from
being reflected in a utility's rates as provided for in Chapter
39 or as otherwise permitted under generally applicable
regulatory principles.
(H) The total installed
capacity of all renewable electric generation facilities on a
retail electric provider's system that are leased pursuant to
this article shall not exceed two percent of the previous
five-year average of the retail electric provider's South
Carolina residential and commercial contribution to coincident
retail peak demand and two percent of the previous five-year
average of the retail electric provider's South Carolina
industrial contribution to coincident retail peak demand. A
provider may refuse to interconnect with customers where to do
so would result in this limitation being exceeded. Every retail
electric provider must establish a program for new installations
of leased equipment to permit the reservation of capacity on its
system including provisions to prevent or discourage abuse of
such programs. Such programs must provide that only prospective
individual customer-generator lessees may apply for, receive,
and hold reservations. Each reservation shall be for a single
customer premises only and may not be sold, exchanged, traded,
or assigned except as part of the sale of the underlying
premises. Requests for reservations to electrical utilities as
defined in Section 58-27-10 shall accompany applications for
interconnection of the leased facilities under Chapter 40, Title
58 and the reservation shall remain in force only so long as the
application or permit for interconnection remains active.
Electrical utilities as defined in Section 58-27-10 shall submit
programs establishing the terms of such reservations to the
commission for approval.
(I) Notwithstanding the
provisions of subsection (H), for an electrical utility for
which more than fifty percent of the electricity that it
generates in South Carolina comes from renewable resources, the
total installed capacity of all renewable electric generation
facilities on its system that are leased pursuant to this
article shall not exceed one tenth of one percent of the
previous five-year average of the electrical utility's South
Carolina residential and commercial contribution to coincident
retail peak demand and one tenth of one percent of the previous
five-year average of the electrical utility's South Carolina
industrial contribution to coincident retail peak demand.
Electrical utilities meeting the requirements of this subsection
shall not be required to establish a capacity reservation
program as required by subsection (H) above.
(J)(1) The provisions
of this Article 23 related to leased generation facilities shall
not apply to:
(a)
facilities serving a single premises that is not
interconnected with a retail electric provider;
(b)
facilities owned by customer generators but financed by a
third party; or
(c)
facilities used exclusively for standby emergency service
or participation in an approved standby generation program
operated by a retail electric provider.
(2)
The commission may promulgate regulations consistent with
this section interpreting the scope of these exemptions as to
electrical utilities."
Section 58-27-2620. (A)
Before any entity other than an entity
lawfully providing retail electric service to the public in this
state commences to do business as a lessor of renewable electric
generation facilities under the terms of this article, that
entity shall submit an application to the Office of Regulatory
Staff and provide such information as the Office of Regulatory
Staff shall require. In performing its responsibilities under
this article, the Office of Regulatory Staff must balance the
state's interest in promoting a market for the provision of
renewable electric generation facilities as permitted by this
article with an appropriate level of protection for
customer-generator lessees to ensure fair and accurate marketing
practices and ensure acceptable performance of renewable
electric generation facilities and lessors.
(B) The application
shall be accompanied by such information as the Office of
Regulatory Staff shall require and the Office of Regulatory
Staff may condition its approval on such terms as the Office of
Regulatory Staff shall determine to be just and reasonable to
advance the goals of this article of balancing the state's
interest in promoting a market for the provision of renewable
electric generation facilities as permitted by this article,
with an appropriate level of protection for customer-generator
lessees and to ensure fair and accurate marketing practices.
(C) Upon review of the
application and a finding that the applicant is fit, willing,
and able to conduct business in accordance with the provisions
of this article, the Office of Regulatory Staff shall approve
the application and issue the lessor a certificate permitting
the lessor to market and lease renewable electric generation
facilities to customer-generator lessees under the terms of this
article.
(D) The Office of
Regulatory Staff is authorized to require the regular updating
of information by certificate holders.
(E) The Office of
Regulatory Staff shall receive, compile and investigate customer
complaints arising under this article and shall attempt to
negotiate consent agreements or other settlements resolving
alleged violations of this article.
(F) As concerns
potential violations of this article, lessors of distributed
generation resources and their officers, agents, employees, or
customers shall be subject to the investigatory powers provided
in Sections 58-4-50 and 58-4-55 to the Office of Regulatory
Staff regarding public utilities.
(G) For the protection
of the consuming public, the Office of Regulatory Staff may file
a petition with the Administrative Law Court requesting
revocation of a certificate for violations of this article. In
appropriate circumstances, the Office of Regulatory Staff may
request the immediate revocation of a certificate.
(H) It shall be a
violation of law punishable by civil penalty of not more than
ten thousand dollars per occurrence for any person subject to
Section 58-27-2620(A), either directly or indirectly:
(1)
to solicit business as a lessor of renewable electric
generation facilities without a valid certificate issued under
this section or otherwise in violation of the terms of this
article, or
(2)
to engage in any unfair or deceptive practice in the
leasing of renewable electric generation facilities.
(I) An aggrieved person
with standing may file a request for a contested case of a
decision of the Office of Regulatory Staff with the
Administrative Law Court within thirty days of such decision.
Section 58-27-2630. (A)
Not more than thirty days after installation
of a renewable electric generation facility leased to a
customer-generator lessee, the lessor shall register the
facility with the Office of Regulatory Staff on forms developed
and provided by the Office of Regulatory Staff. This
registration information must include:
(1)
the name, mailing, and electronic mail address and
telephone number of the lessor-owner;
(2)
the nameplate generating capacity of the facility and its
expected annual energy output;
(3)
physical location of the facility;
(4)
the name, mailing, and email address and telephone number
of the customer-generator lessee;
(5)
a description of the intended use of the facility and its
output;
(6)
a list of all federal, state, and local licenses and
permits required for the construction and operation of the
facility, along with a statement regarding whether each has been
obtained or applied for;
(7)
the date the facility began or will begin operating;
(8)
the name of the retail electric provider to which the
facility has been or will be interconnected;
(9)
an affidavit from the customer-generator lessee that it
will not sell, resell, or attempt to sell or resell the
electrical output of the facility to any person, corporation, or
entity, other than the customer-generator lessee's retail
electric provider or its designee, that the primary purpose for
the operation of the renewable electric generation facility is
to generate electricity for the benefit of the premises where it
is located, and that the facility has been or will be operated
in substantial compliance with all federal and state laws,
rules, and regulations and all local codes and ordinances.
(B) Office of
Regulatory Staff shall maintain a registry of facilities
registered pursuant to subsection (A). This information must be
available for inspection by the public and is subject to the
South Carolina Freedom of Information Act. The Office of
Regulatory Staff may require the updating of information on the
registry.
(C) The Office of
Regulatory Staff shall review the program established pursuant
to this article and issue a report to the State Regulation of
Public Utilities Review Committee no later than December 31,
2016, relating to its review, including recommendations
regarding the expansion, reduction, or continuance of the
program.
Section 58-27-2640. The Office of Regulatory Staff shall have the authority to investigate claims of violations of the provisions of Section 58-27-2610 committed by electrical utilities and lessors of renewable electric generation facilities.
Section 58-27-2650. Section 58-27-2610 shall not become effective until the commission has approved net energy metering rates referenced in Chapter 40, Title 58 for all investor owned electrical utilities serving more than one hundred thousand retail customer accounts in South Carolina."
SECTION 5. Chapter 27, Title 58 of the 1976 Code is amended by adding:
"Section 58-27-1050. The Office of Regulatory Staff, with guidance and feedback from the electrical utilities and other interested parties, shall investigate and report to the Public Service Commission on fixed costs, fixed charges, and the extent of cost shifting that is attributable to distributed energy resources within current utility cost of service ratemaking methodologies, cost allocations, and rate designs, with a focus on the implications distributed energy resources could have for that business model in the future. The report shall review how to ensure a fair allocation of costs and benefits between consumers who utilize distributed energy resources and consumers who do not utilize distributed energy resources, as well as suggesting any necessary or prudent changes to existing or future rate structures. The report shall include a general overview of cost shifting that is attributable to or arising from historical cost of service ratemaking related to the current utility business model, specifically the cost of service ratemaking methodology, the cost allocations and rate designs. The findings shall include public comment and be reported to the Public Service Commission by December 31, 2015."
SECTION 6. Chapter 27, Title 58 of the 1976 Code is amended by adding:
"Section 58-27-450.
(A) The commission shall promulgate
standards for interconnection of renewable energy facilities and
other nonutility-owned generation with a generation capacity of
two thousand kilowatts (2,000 kW AC) or less to an electrical
utility's distribution system.
(B) No
customer-generator or customer-generator lessee shall connect or
operate an electric generation unit in parallel phase and
synchronization with any electrical utility without written
approval by the electrical utility that all of the commission's
requirements have been met. For a customer-generator or
customer-generator lessee who violates this provision, an
electrical utility may immediately and without notice disconnect
the electric facilities of the customer-generator or
customer-generator lessee and terminate the customer-generator's
or customer-generator lessee's electric service."
SECTION 7. Each
distribution electric cooperative board shall consider the
general objectives of Section 58-40-10 et seq. and any
methodology promulgated thereunder in adopting a net energy
metering policy. Each distribution electric cooperative shall
adopt a net energy metering policy and shall report their policy
to the ORS within one year of the passage of this act.
Provided, however, that the requirements of this section do not
apply to an electric cooperative organized under the laws of a
state other than South Carolina.
SECTION 8. Each electric cooperative shall investigate the relationship between fixed costs, fixed charges, and the extent of cost shifting that is attributable to distributed energy resources within current cost of service ratemaking methodologies, cost allocations, and rate designs, with a focus on the implications distributed energy resources could have for their business models in the future. The report shall review how to ensure a fair allocation of costs and benefits between consumers who utilize distributed energy resources and consumers who do not utilize distributed energy resources, as well as suggesting any necessary or prudent changes to existing or future rate structures. The report shall include a general overview of cost shifting that is attributable to or arising from historical cost of service ratemaking related to the current utility business model, specifically the cost of service ratemaking methodology, the cost allocations, and rate designs. The investigation and report may be coordinated and consolidated into a single project. The findings shall be filed with the Office of Regulatory Staff by December 31, 2015. Provided, however, that the provisions of this section do not apply to an electric cooperative organized under the laws of a state other than South Carolina.
SECTION 9. If the application of the provisions of this act to any wholesale electrical contract existing on the date of its adoption is determined to impair unlawfully any term of such contract or to add material costs to either party, then that contract will be exempt from the terms of this act to the extent necessary to cure such impairment or to avoid the imposition of additional material costs.
SECTION 10. Article 23, Chapter 27, Title 58 shall be construed as a whole, and all parts of it are to be read and construed together. If any part of this article shall be adjudged by any court of competent jurisdiction to be invalid, the remainder of this article shall be invalidated. Nothing herein shall be construed to affect the parties' right to appeal the matter.
SECTION 11. This act takes effect upon approval by the Governor. /
Renumber sections to conform.
Amend title to conform.