Bill 696

                    Current Status

Bill Number:               696
Ratification Number:       503
Act Number:                431
Introducing Body:          Senate
Subject:                   Relating to electric utilities and
                           cooperatives and reassignment of service
                           areas

(A431, R503, S696)

AN ACT TO AMEND SECTION 58-27-650, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO ELECTRIC UTILITIES AND COOPERATIVES AND REASSIGNMENT OF SERVICE AREAS; SECTION 58-27-670, RELATING TO ELECTRIC SERVICE IN AREAS BECOMING PART OF MUNICIPALITIES; SECTION 58-27-1280, RELATING TO CONSTRUCTION OR EXTENSION OF ELECTRICAL UTILITIES AND COOPERATIVES WHICH CAUSES UNREASONABLE INTERFERENCE OF ELECTRIC SERVICE; SECTION 58-27-1360, RELATING TO ACQUISITION OF PROPERTY OF AN ELECTRICAL SERVICE SUPPLIER WHEN AN AREA IS ANNEXED TO OR INCORPORATED AS A MUNICIPALITY, SO AS TO AUTHORIZE THE PUBLIC SERVICE COMMISSION TO ADMINISTER UNIFORM SERVICE RIGHTS AND RESPONSIBILITIES OF ELECTRICAL SUPPLIERS THROUGHOUT THE STATE INCLUDING SPECIFIC RESPONSIBILITIES WITHIN MUNICIPAL CORPORATE LIMITS; AND BY ADDING SECTION 58-27-680 SO AS TO PROVIDE THAT THE CONTINUATION OF ELECTRIC SERVICE UNDER SECTION 58-27-670 MUST NOT BE CONSTRUED AS AFFECTING THE AUTHORITY OF AN ELECTRIC SUPPLIER PURSUANT TO SECTION 58-27-620 TO SERVICE PREMISES WHICH ARE ALREADY RECEIVING ELECTRIC SERVICE FROM A MUNICIPAL ELECTRIC SYSTEM, WHETHER INSIDE OR OUTSIDE MUNICIPAL BOUNDARIES.

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

Findings

SECTION 1. The General Assembly finds that assignment of electric service territories by the Public Service Commission has aided the State in overseeing the public interest of its citizens by uniformly regulating the responsibilities and rights of sellers of electricity.

The General Assembly further finds that unnecessary duplication of electrical facilities increases rates and charges to South Carolina citizens and that the assignment of electric service territories has decreased duplication.

The General Assembly further finds that incorporation of new municipalities and annexation by existing municipalities alter assignments of service areas originally made for public convenience and necessity without consideration for the impact of the change on persons living outside the municipality.

Therefore, in accordance with the powers granted the General Assembly under Article IX, Section 1, and Article VIII, Section 14, of the Constitution of this State, it is declared the policy of South Carolina to maintain the assignment of electric service territories by the Public Service Commission over areas having been assigned electric suppliers under Section 58-27-640, even when the area becomes incorporated or annexed to an existing city or town.

Public Service Commission authorized to reassign

SECTION 2. Section 58-27-650 of the 1976 Code is amended to read:

"Section 58-27-650. (A) The Public Service Commission, upon agreement of the affected electric suppliers, is authorized to reassign to one electric supplier any area or portion of the area assigned to another and, notwithstanding the lack of an agreement, the commission upon its own motion or upon complaint by any electric supplier or county or consolidated political subdivision within this State, after notice to all affected electric suppliers and after hearing, if a hearing is requested by any affected electric supplier or any other interested party, is authorized to reassign to one electric supplier any area or portion of the area assigned to another, except premises being served by the other electric supplier or to which any of its facilities for service are attached and except the portions of the area as are within three hundred feet of the other electric supplier's lines, upon a finding that the reassignment is required by public convenience and necessity. In determining whether public convenience and necessity require the reassignment, the commission shall consider among other things the adequacy and dependability of the service of the affected electric suppliers, but may not consider rate differentials between the electric suppliers.

(B) The Public Service Commission has the authority and jurisdiction, if a hearing is requested by any affected electric supplier or municipality, to order any electric supplier to cease and desist from furnishing electric service inside an assigned area which has been annexed into a municipality upon a finding that service to existing consumers by the electric supplier which is then furnishing service, or which has the right to furnish service to the premises, is or will be inadequate or undependable, and cannot or will not be made adequate or dependable within a reasonable time, or that the rates, conditions of service or service regulations, applied to the consumers, are unreasonably discriminatory. In determining the adequacy and dependability of service or whether rates, conditions of service, or service regulations are unreasonably discriminatory, the commission may not consider rate differentials between the affected electric suppliers or municipality or differences in the provisions of utility service other than electrical services. Upon a finding of inadequate, undependable, or unreasonably discriminatory service, the commission shall order necessary improvements or corrections or the sale of the facilities in accordance with Section 58-27-1360."

Electric service

SECTION 3. Section 58-27-670 of the 1976 Code is amended to read:

"Section 58-27-670. The furnishing of electric service in any area which becomes a part of any municipality after the effective date of this section, either by annexation or incorporation, whether or not the area, or any portion of the area has been assigned pursuant to Section 58-27-640, is subject to the provisions of Sections 58-27-1360 and 33-49-250, and any provisions of this article. No poles, wires, or other facilities of electric suppliers using the streets, alleys, or other public ways within the corporate limits of a municipality may be constructed by an electric supplier unless the consent of the municipal governing body is first obtained. Annexation may not be construed to increase, decrease, or affect any other right or responsibility a municipality, rural electric cooperative, or electrical utility may have with regard to supplying electric service in areas assigned by the Public Service Commission in accordance with Chapter 27 of Title 58."

Interference with service

SECTION 4. Section 58-27-1280 of the 1976 Code is amended to read: "Section 58-27-1280. If any electrical utility, rural electric cooperative, or any governmental body or agency which owns or operates equipment or facilities for generating, transmitting, delivering, or furnishing electricity in this State, in constructing or extending its lines, plant, or system, unreasonably interferes or is about to interfere unreasonably with the service or system of any other electrical utility, rural electric cooperative, or governmental body or agency, the commission on complaint of the electrical utility, rural electric cooperative, or governmental body or agency complaining to be injuriously affected may, after hearing, make orders and prescribe terms and conditions in harmony with this chapter as are just and reasonable including the removal of lines and the issuance of a cease and desist order to the electrical utility, rural electric cooperative, or governmental body or agency causing the interference."

Acquisition of property of electrical supplier

SECTION 5. Section 58-27-1360 of the 1976 Code is amended to read:

"Section 58-27-1360. When any area in which electric service is being furnished at wholesale or retail by a supplier of electricity including municipal corporations, public or governmental agencies, and rural electric cooperatives, is incorporated as a city or town or is annexed to an existing incorporated city or town, the city or town or, with the consent of the governing body of such city or town, an electrical utility furnishing electricity in that city or town by franchise, contract, permit, or other consent, have the right to acquire the property of a supplier of electricity brought within corporate limits upon a finding by the commission pursuant to subsection (B) of section 58-27-650 that inadequate, undependable, or unreasonably discriminatory service is being provided and upon payment of just compensation. The supplier of electricity having property or facilities in areas incorporated as a city or town or annexed into an existing city or town has the right to compel the city or town or an electrical utility operating in that city or town pursuant to a franchise, contract, permit, or other consent to purchase the facilities and properties and to compel the payment of just compensation. The city or town may not elect to purchase nor give its consent to a purchase by another supplier of electricity until the commission has ruled upon adequacy of service, and it has first given ten days' written notice to the suppliers concerned of its intention to purchase or consent to the purchase of property situate within the limits of the municipality used for providing electric service in the municipality.

Within ten days after notice is given that the right to acquire or sell the facilities and properties is exercised, the parties shall each select a representative in order to reach an agreement on just compensation. The selling supplier shall make its pertinent books and records available to the representative of the purchasing supplier. If the representatives are unable to agree on just compensation within a period of sixty days, they shall jointly request the resident judge of the judicial circuit in which the facilities and properties to be purchased are situate to submit a list of five disinterested persons from which the selection of an arbiter must be made. The resident judge shall submit the list within five days after receipt of a request. Within five days after receipt of the list from the resident judge, the representatives of the parties shall meet, and each party has alternate strikes, the first strike to be chosen by lot, until one person remains on the list, and this person is the arbiter, whose expenses and fee for service rendered, as assessed by him against either or both parties, are subject to review by the resident judge. The arbiter shall give each representative an opportunity to be heard, and his decision on just compensation, including reasonable expenses, engineers' and attorneys' fees justifiably incurred by the selling supplier as allowed by the arbiter, is final and binding on the parties.

If either party fails to act during the time limitation set forth above for the accomplishment of a particular step within this procedure without the consent of the other party, then the party failing to act forfeits his rights in the selection of an arbiter and his rights to be heard by the arbiter.

For the purposes of this section, 'just compensation' consists of the total of the following:

(a) Reproduction cost, new, of the facilities being acquired, less depreciation on a straight-line basis;

(b) Cost of reintegrating the system of the selling supplier after detaching the portion to be sold (including allowance for idle substation, transmission, and generation capacity caused in the remaining portion of the system or of any supplying systems, the cost of which is borne in whole or in part by the selling system,) and;

(c) An additional amount, in recognition of the loss of revenue of greater than average value, equivalent to two and one-half times the gross revenue derived by the selling supplier from the consumers on the lines being acquired during the twelve months next preceding the first of the month in which notice of purchase was given the selling supplier.

The total sum paid by an electrical utility or municipality under the provisions of this section for acquisition of facilities is the original cost of the facilities to be entered on its books and records for all accounting purposes, including rate making."

Continuation of electric service

SECTION 6. Article 5 of Chapter 27 of Title 58 of the 1976 Code is amended by adding:

"Section 58-27-680. The continuation of electric service under Section 58-27-670 must not be construed as affecting the authority of an electric supplier pursuant to Section 58-27-620 to serve premises which are already receiving electric service from a municipal electric system, whether inside or outside municipal boundaries."

Time effective

SECTION 7. This act shall take effect upon approval by the Governor.