Current Status Bill Number:
1054Ratification Number: 366Act Number: 358Type of Legislation: General Bill GBIntroducing Body: SenateIntroduced Date: 19960124Primary Sponsor: J. Verne SmithAll Sponsors: J. Verne Smith, Drummond, Hayes, Elliott and GloverDrafted Document Number: pt\2179dw.96Companion Bill Number: 4467Date Bill Passed both Bodies: 19960508Date of Last Amendment: 19960507Governor's Action: SDate of Governor's Action: 19960520Subject: Joint agency filing of petition with PSC
Body Date Action Description Com Leg Involved ______ ________ _______________________________________ _______ ____________ ------ 19960613 Act No. A358 ------ 19960520 Signed by Governor ------ 19960514 Ratified R366 Senate 19960508 Concurred in House amendment, enrolled for ratification House 19960508 Read third time, returned to Senate with amendment House 19960507 Amended, read second time House 19960507 Objection by Representative Whatley Fulmer Hallman Vaughn Allison Cato Haskins Easterday Tripp Davenport Cain Wells Knotts Lanford House 19960501 Committee report: Favorable with 26 HLCI amendment House 19960327 Introduced, read first time, 26 HLCI referred to Committee Senate 19960326 Read third time, sent to House Senate 19960321 Amended, read second time, ordered to third reading with notice of general amendments Senate 19960320 Committee report: Favorable with 11 SJ amendment Senate 19960124 Introduced, read first time, 11 SJ referred to CommitteeView additional legislative information at the LPITS web site.
(A358, R366, S1054)
AN ACT TO AMEND SECTION 6-23-60, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE FILING OF A PETITION PRIOR TO THE ACQUISITION OF A PROJECT BY A JOINT AGENCY, SO AS TO FURTHER ALLOW THE PUBLIC SERVICE COMMISSION TO APPROVE CERTAIN TYPES OF PROJECTS WHICH CONSIST OF CERTAIN KINDS OF ELECTRIC GENERATING PLANTS AND PROVIDE THAT THE COMMISSION'S APPROVAL IS NOT NECESSARY FOR PROJECTS FOR OTHER TRANSMISSION OR GENERATING FACILITIES OR FOR FACILITIES FOR DISTRIBUTION OR TRANSFORMATION OF ELECTRIC POWER AND ENERGY, AND PROVIDE THAT A JOINT AGENCY MAY NOT ACQUIRE OR PURCHASE PROJECTS OR CAPACITY IF, AFTER PURCHASE OR ACQUISITION, THE JOINT POWER AGENCY WOULD OWN, CONTRACT FOR, OR CONTROL GENERATING RESOURCES EXCEEDING ONE HUNDRED EIGHTY-FIVE PERCENT OF THE MEMBER MUNICIPALITIES HISTORICAL TERRITORIAL PEAK, DELETE AS A DETERMINING FACTOR AS TO WHETHER IT IS BENEFICIAL TO THE JOINT AGENCY REFERENCES TO AN ELECTRICAL SUPPLIER SERVING THE COUNTIES OR COUNTY WITHIN WHICH ANY MEMBER MUNICIPALITIES ARE LOCATED; TO AMEND SECTION 6-23-90, RELATING TO THE RIGHTS AND POWERS OF A JOINT AGENCY, SO AS TO DELETE THE PROVISION WHICH PROVIDES FOR JOINT AGENCIES TO ACQUIRE NOT LESS THAN TEN PERCENT OF RATED CAPACITY FROM AN ELECTRIC SUPPLIER, DELETE A REFERENCE TO SECTION 6-23-120, AND AUTHORIZE ANY PORTION OF A PROJECT TO BE ACQUIRED, PROVIDE FOR JOINT AGENCIES TO NEGOTIATE AND ENTER CONTRACTS WITH ANY ELECTRIC SUPPLIER WITHIN OR WITHOUT THE STATE, AUTHORIZING JOINT AGENCIES TO ENTER INTO CONTRACTS MAKING THEM OBLIGATED TO MAKE PAYMENTS REQUIRED BY A CONTRACT WHERE THE FACILITIES FROM WHICH SERVICES ARE PROVIDED ARE COMPLETED, OPERABLE, AND OPERATING, AND THAT THESE PAYMENTS ARE NOT SUBJECT TO REDUCTIONS AND ARE NOT CONDITIONED UPON THE PERFORMANCE OR NONPERFORMANCE OF ANY PARTY; TO AMEND SECTION 6-23-170, RELATING TO INVESTMENTS OF A JOINT AGENCY OF MONIES PENDING DISBURSEMENT, SO AS TO PROVIDE THAT THE BOARD OF DIRECTORS OR PERSONS AUTHORIZED TO MAKE INVESTMENT DECISIONS ON BEHALF OF JOINT AGENCIES ARE CONSIDERED TO BE TRUSTEES AND SUBJECT TO THE PRUDENT INVESTOR STANDARD; TO AMEND SECTION 6-23-20, RELATING TO DEFINITIONS USED IN THE "JOINT MUNICIPAL ELECTRIC POWER AND ENERGY ACT", SO AS TO REDEFINE "ELECTRIC SUPPLIER" AND "PROJECT"; BY ADDING SECTION 6-23-235 SO AS TO MAKE A PORTION OF SECTION 6-21-400 NOT APPLICABLE TO A JOINT AGENCY ISSUING BONDS PURSUANT TO THE PROVISIONS OF CHAPTER 21 OF TITLE 6 (REVENUE BOND ACT FOR UTILITIES); BY ADDING SECTION 6-23-335 SO AS TO PROVIDE THAT NOTHING IN CHAPTER 23 OF TITLE 6 MAY BE INTERPRETED TO AUTHORIZE A JOINT AGENCY TO PROVIDE, DISTRIBUTE, MARKET, OR SELL ELECTRIC ENERGY OR SERVICE TO RETAIL CUSTOMERS; BY ADDING SECTION 6-23-340 SO AS TO PROVIDE THAT NOTHING IN THIS ACT SHALL BE DEEMED OR CONSTRUED TO AMEND, SUPPLEMENT, MODIFY, OR OTHERWISE ALTER OR AFFECT THE PROVISIONS OF CONTRACTS ENTERED INTO BY A JOINT AGENCY PRIOR TO THE EFFECTIVE DATE OF THIS ACT; AND TO REPEAL SECTION 6-23-120, RELATING TO THE SALE OF EXCESS POWER OR OUTPUT OF A PROJECT NOT THEN REQUIRED BY ANY OF THE MEMBERS OF THE JOINT AGENCY.
Be it enacted by the General Assembly of the State of South Carolina:
Acquisition of a project, procedure
SECTION 1. Section 6-23-60 of the 1976 Code is amended to read:
"Section 6-23-60. (A) Prior to the proposed acquisition of a project for the generation or transmission of electric power and energy by a joint agency, a petition must be filed with the Public Service Commission setting forth the material necessary to permit the Public Service Commission to make the determination required by this section. Notice of the filing of the petition must be given by the Public Service Commission once a week for three consecutive weeks in a newspaper of general circulation in the State. A hearing on the petition is to be conducted as provided by law.
(B) The Public Service Commission is authorized to approve or disapprove the proposed acquisition by a joint agency of a project or projects which consist of an electric generating plant or plants and associated facilities designed for, or capable of, operation at a capacity of more than seventy-five megawatts, or which consist of electric transmission lines and associated facilities of a designed operating voltage of one hundred twenty-five kilovolts or more. There is no requirement for approval by the Public Service Commission for a project or projects for other transmission or generating facilities, or for facilities for distribution or transformation, or any of them, of electric power and energy. However, the joint agency may not acquire or purchase projects or capacity if, after the purchase or acquisition, the joint power agency would own, contract for, or control generating resources exceeding one hundred eighty-five percent of the member municipalities historical territorial peak. In determining whether it is beneficial to the joint agency, the Public Service Commission shall take into consideration, but is not limited to, the following:
(1) the economies and efficiencies to be achieved in constructing on a large scale, facilities for the generation and transmission of electric power and energy;
(2) the municipalities' needs for reserve and peaking capacity and to meet obligations under pooling and reserve-sharing agreements reasonably related to its needs for power and energy to which it is or may become a party;
(3) the estimated useful life of the project;
(4) the estimated time necessary for the planning, development, acquisition, or construction of the project and the length of time required in advance to obtain, acquire, or construct additional power supplies;
(5) the reliability and availability of existing or alternative power supply sources and the costs of the existing or alternative power supply sources; and
(6) the load forecast of capacity of a project and the utilization of the capacity by the joint agency for a reasonable period of time subsequent to the date of commercial operation of the project.
(C) Any party in interest may appeal the commission's action pursuant to Sections 58-27-2310 to 58-27-2340 of the 1976 Code."
Rights and powers of joint agency
SECTION 2. Section 6-23-90(j)(1) of the 1976 Code is amended to read:
"(1) To acquire by negotiated purchase or lease from an electric supplier any portion of a project or projects under construction on the date of approval of this chapter, or on which construction will commence subsequent to the date of approval of this chapter, either individually or jointly with one or more municipalities in any other state, owning electric generation, transmission, or distribution facilities, or with any political subdivisions or agencies of any other state and to pay all or any part of the cost of it from the proceeds of bonds of the joint agency or from any other funds available to the joint agency;"
Rights and powers of joint agency
SECTION 3. Section 6-23-90(o) of the 1976 Code is amended to read:
"(o) To generate, produce, transmit, deliver, exchange, purchase, or sell for resale only, electric power or energy, and to enter into contracts for any or all such purposes;"
Rights and powers of joint agency
SECTION 4. Section 6-23-90(p) of the 1976 Code is amended to read:
"(p) To negotiate and enter into contracts for the purchase, exchange, interchange, wheeling, pooling, transmission, marketing, sale, or use, for resale only, of electric power and energy with any electric supplier within the State, or with any person, firm, or corporation, public or private, outside this State;"
Rights and powers of joint agency
SECTION 5. Section 6-23-90(q) of the 1976 Code is amended to read:
"(q) to negotiate and enter into contracts for the purchase, exchange, interchange, wheeling, pooling, transmission, marketing, sale, or use, for resale only, of electric power and energy, with any electric supplier within the State, or with any person, firm, or corporation, public or private, outside this State, and the contract may provide that the joint agency is to be obligated to make the payments required by the contract whether the facilities from which the contracted services are provided, are completed, operable or operating, notwithstanding the suspension, interruption, interference, reduction or curtailment of the output of the facilities, or the power and energy contracted for, and that the payments under the contract must not be subject to any reductions, whether by offset or otherwise, and are not conditioned upon the performance or nonperformance of any party to the contract;"
Board subject to prudent investor standard
SECTION 6. Section 6-23-170 of the 1976 Code is amended to read:
"Section 6-23-170. Notwithstanding any provision of law to the contrary, the board of directors of joint agencies or persons authorized to make investment decisions on behalf of joint agencies investing public funds are considered to be trustees and subject to the prudent investor standard. When investing, reinvesting, purchasing, acquiring, exchanging, selling, and managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character. When investing, reinvesting, purchasing, acquiring, exchanging, selling, and managing funds of a joint agency, the primary objective of a trustee is to safeguard the principal of the funds under its control. The secondary objective is to meet the liquidity needs of the joint agency. The third objective is to achieve a return on the funds under its control. Monies of joint agencies not required for the immediate necessities of the joint agency may be invested and reinvested in securities and other investments as the board of directors of joint agencies shall determine in accordance with the objectives enumerated above. The securities and other investments which may be used by the trustee is to be listed in a formal, written investment policy approved by the board of directors of joint agencies."
Definition of "electric supplier"
SECTION 7. Section 6-23-20(e) of the 1976 Code is amended to read:
"(e) `electric supplier' means any electric utility regulated by the Public Service Commission, electric cooperative, or municipal electric system authorized to do business within the State or the Public Service Authority."
Definition of "project"
SECTION 8. Section 6-23-20(h) of the 1976 Code is amended to read:
"(h) `Project' means any system or facilities for the generation, transmission and transformation, not distribution, of electric power and energy by any means whatsoever including, but not limited to, any one or more electric generating units situated at a particular site or any interest in any of the foregoing or any right to the output, capacity, use or services thereof."
Portion of section not applicable
SECTION 9. Chapter 23, Title 6 of the 1976 Code is amended by adding:
"Section 6-23-235. That portion of Section 6-21-400 which states that it shall not be necessary for any borrower operating under the provisions of this chapter to obtain any franchise or other permit from any state bureau, board, commission, or other instrumentality of the State in order to construct, improve, enlarge, extend, or repair any system, project, or combined system named in Chapter 21, Article 6, shall not be applicable to a joint agency issuing bonds pursuant to the Revenue Bond Act for Utilities, Section 6-21-10, et seq."
Interpretation of chapter
SECTION 10. Chapter 23, Title 6 of the 1976 Code is amended by adding:
"Section 6-23-335. Nothing in this chapter shall be interpreted to authorize a joint agency to provide, distribute, market, or sell electric energy or service to retail customers."
Interpretation of chapter
SECTION 11. Chapter 23, Title 6 of the 1976 Code is amended by adding:
"Section 6-23-340. Nothing in this act shall, or shall be deemed or construed to, amend, supplement, modify, or otherwise alter or affect the provisions of contracts entered into by a joint agency prior to the effective date of this act."
SECTION 12. Section 6-23-120 of the 1976 Code is repealed.
SECTION 13. This act takes effect upon approval by the Governor.
Approved the 20th day of May, 1996.