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Current Status Bill Number:View additional legislative information at the LPITS web site.3297 Type of Legislation:General Bill GB Introducing Body:House Introduced Date:19990119 Primary Sponsor:Kirsh All Sponsors:Kirsh Drafted Document Number:l:\council\bills\nbd\11069jm99.doc Residing Body:House Current Committee:Labor, Commerce and Industry Committee 26 HLCI Subject:Competitive Power Act of 1999, Electricity, Public Service Commission, Utilities History Body Date Action Description Com Leg Involved ______ ________ ______________________________________ _______ ____________ House 19990119 Introduced, read first time, 26 HLCI referred to Committee Versions of This Bill
TO AMEND TITLE 58, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO PUBLIC UTILITIES, SERVICES, AND CARRIERS, BY ADDING CHAPTER 28 SO AS TO ENACT THE "SOUTH CAROLINA COMPETITIVE POWER ACT OF 1999"; TO DESIGNATE SECTION 57 OF ACT 173 OF 1987 AS SECTION 58-27-690 OF THE 1976 CODE; TO AMEND SECTION 58-27-690, AS AMENDED, RELATING TO SERVICE RIGHTS OF ELECTRIC SUPPLIERS AND THE PROVISION THAT CERTAIN LISTED STATUTES DO NOT MODIFY, ABRIDGE, OR REPEAL SECTIONS 58-27-650, 58-27-670, 58-27-680, 58-27-1280, OR 58-27-1360, SO AS TO DELETE THE REFERENCES TO SECTIONS 58-27-650, 58-27-670, AND 58-27-680 IN KEEPING WITH THEIR REPEAL BY THIS ACT; TO PROVIDE THAT, PRIOR TO JULY 15, 2000, THE PUBLIC SERVICE COMMISSION SHALL PROVIDE TO THE GOVERNOR AND THE GENERAL ASSEMBLY A REPORT OF ITS FINDINGS AND IMPLEMENTATION PLAN IN ANTICIPATION OF COMMENCEMENT OF THE IMPLEMENTATION SCHEDULE FOR CUSTOMER CHOICE AS PROVIDED BY CHAPTER 28 OF TITLE 58; TO PROVIDE THAT THE SCHEDULE FOR PHASE-IN OF DIRECT ACCESS PROVIDED BY SECTION 58-28-40 SHALL NOT COMMENCE UNLESS APPROVED BY JOINT RESOLUTION OF THE GENERAL ASSEMBLY; AND TO REPEAL ARTICLE 3 OF CHAPTER 27, TITLE 58, RELATING TO FRANCHISES AND PERMITS FOR ELECTRIC UTILITIES, AND SECTIONS 58-27-610, 58-27-620, 58-27-630, 58-27-640, 58-27-650, 58-27-660, 58-27-670, AND 58-27-680, ALL RELATING TO SERVICE RIGHTS OF ELECTRIC SUPPLIERS.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Title 58 of the 1976 Code is amended by adding:
Section 58-28-10. This chapter may be cited as the 'South Carolina Competitive Power Act of 1999'.
Section 58-28-20. It is the policy of the General Assembly to authorize and permit competition in the supply of electricity to consumers in South Carolina only in accordance with the following principles and subsequent provisions:
(1) Customer Choice. To realize the full benefits of competition, all customers should be able to choose among and access a wide array of competing, qualified suppliers of electricity approved and certified by the commission. All customers must have the opportunity to benefit from competition, which should be implemented in a fair and equitable manner. A process should be established which seeks to ensure that larger electricity users do not benefit at the expense of smaller customers, and rural customers do not suffer at the expense of urban areas. Customers should be made aware of their new rights and the benefits and risks of customer choice through a consumer education process administered by the commission.
(2) Unbundling of Services. Generation services should become fully competitive, while the provision of transmission and distribution should provide for open access, comparability of service for all users, and nondiscriminatory pricing, while recognizing that federal and state jurisdictional uncertainties over wholesale and retail services should be resolved. Companies which own transmission or distribution, as well as generation, should not be allowed to use any monopoly position in those services as a barrier to competition in generation. The determinations of corporate structure, excluding market power issues, should be left to the marketplace and not dictated by the government.
(3) Open Access. Customer access to alternative suppliers of electricity requires open access to the transmission grid and distribution system and is critical to creating a fully competitive market structure.
(4) Fair dealing. Competition among electricity suppliers and buyers must be fair, nondiscriminatory, and consistent.
(5) Reliability and Safety. Reliable and safe electric service must be maintained or improved. South Carolina and federal regulators should have the necessary authority to assure the reliability and safety of the electric system.
(6) Recovery of Stranded Costs. Following the process established herein, the utilities are entitled to recover prudently incurred, net, verifiable stranded costs, and investments. The South Carolina General Assembly has the responsibility to determine the just and reasonable recovery mechanisms to determine net stranded costs and investments, including mitigation methods and incentives. It should provide for a public process that identifies and values investments and costs stranded by competition. It should set the time frame involved for an expeditious transition. And it should employ mechanisms that do not disadvantage one class of customer or supplier over another. The amount of recovery and methodology to be used will be determined by the South Carolina Public Service Commission according to the principles and provisions of this chapter.
(7) Sanctity of contract. The rights and obligations embodied in contractual arrangements are and will be an indispensable element of an effective competitive power market. Legislation should not interfere with the rights of parties under contract.
(8) Environmental and Social Policy. The energy marketplace should not be used as a vehicle for accomplishing government-mandated, government-sponsored, consumer, or taxpayer subsidized, social, or environmental programs. These programs should not be incorporated in electric utility rate structures, but instead be unbundled from rates.
(9) Transmission and distribution Pricing. To the extent that South Carolina has jurisdiction over transmission and distribution pricing, pricing methodologies should be encouraged to enhance reliability, compensate transmission owners fairly, allow for widest possible markets, and relieve transmission congestion.
(10) Transition to competition/Date Certain. The process for the transition to electric supply competition should provide for implementation of the initial phase-in period two years after the effective date of this act. During the two years after the effective date of the act the commission will determine the appropriate market structure, utility restructuring plans, stranded costs, consumer education process, and consumer protection process. Implementation will consist of a phase-in of customer choice for three years after the initial two-year period. Year one of the phase-in should allow for twenty percent of the peak load derived for a base period of each participating host utility to be subject to competition and customer choice. In year two of the phase-in, an additional twenty percent, or a total of forty percent, of each utility's peak load will be subject to competition. In year three of the phase-in, an additional twenty percent of peak load would be included for a total of sixty percent. The implementation process must allow residential and small customers sufficient opportunity to participate in the process. The phase-in process may be modified by the commission should conditions warrant such action. The load subject to competition will be applicable to all customer classes each year with the residential class having first priority on a first-come first-serve basis. The commercial class will have second choice, and any remaining load will be allocated to the industrial class. Under this process, the customer must first notify the host utility of the intent to participate. If the customer does not have a supplier at the time of notification, a specific time period should be established for the customer to obtain a supplier. The customer must have an approved and certified supplier to participate in the process, and failure to obtain a supplier by a given time disqualifies that customer. Following the third year of the phase-in, full implementation shall take place across the state with one hundred percent of load being subject to competition for all customer classes; however, at any time during any part of the phase-in period the General Assembly, upon request by the commission, may by joint resolution terminate, delay, or suspend any further implementation of this process.
(11) Obligation to Connect. In a competitive retail market, local utilities should be relieved of the traditional obligation to serve the public, which should be replaced with an obligation to connect, and distribution should remain a regulated monopoly service for incumbent providers subject to the incumbent utility providing the default service function until further order of the commission.
(12) Federal Barriers. It is the sense of the General Assembly that the repeal of the Public Utility Holding Company Act and the Public Utility Regulatory Policies Act and the reform of other federal laws that impede competitive electric markets should be accomplished to complement South Carolina's plans for the transition to customer choice. The process of restructuring generation services with consumer choice has profound interstate implications. Assured reliability of the grid, consumer, and supplier access to sufficiently wide markets, a competitive playing field free of uneven subsidies and anti-competitive advantages, and resolution of existing state/federal jurisdiction over transmission and distribution services are all important to workable competition. South Carolina and other states should cooperate with congress to remove federal barriers which should be part of the transition to competition.
Section 58-28-30. The following words and phrases when used in this chapter have the meanings shown unless the context clearly indicates otherwise:
(1) 'Affiliate' means a person who, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with a specified person.
(2) 'Aggregator or market aggregator' means an entity approved and certified, by the commission and subject to applicable commission regulations, procedures, and requirements, that purchases electric energy and takes title to electric energy as an intermediary for sale to retail electric customers.
(3) 'Broker or marketer' means an entity, approved, and certified by the commission and subject to applicable commission rules, procedures, and requirements, that acts as an agent or intermediary in the sale and purchase of electric energy but that does not take title to electric energy.
(4) 'Commission' means the South Carolina Public Service Commission.
(5) 'Customer' means a retail electric customer.
(6) 'Direct access' means the right of electric generation suppliers and customers to utilize and interconnect with the electric transmission and distribution system on a nondiscriminatory basis at rates, terms, and conditions of service comparable to the transmission and distribution companies' own use of the system to transport electricity from any generator of electricity to any customer. This term also is referred to as 'customer choice' in this chapter.
(7) 'Electric distribution company' means the public utility providing facilities for the jurisdictional transmission and distribution of electricity to customers, except building or facility owners or operators that manage the internal distribution system serving the building or facility and that supply electric power and other related electric power services to occupants of the building or facility.
(8) 'Electric generation supplier' or 'electricity supplier' or 'generation service provider' or 'service provider' or 'supplier' means a person or corporation, including municipal corporations which choose to provide service outside the municipal limits, except to the extent provided before the effective date of this chapter, brokers and marketers, aggregators, or any other entities, that sell to customers electricity or related services utilizing the jurisdictional transmission or distribution facilities of an electric distribution company or that purchases, brokers, arranges, or markets electricity or related services for sale to end-use customers utilizing the jurisdictional transmission and distribution facilities of an electric distribution company. The term excludes building or facility owners or operators that manage the internal distribution system serving the building or facility that supplies electric power and other related power services to occupants of the building or facility.
(9) 'Reliability' means and includes adequacy and security. As used in this definition, adequacy means the provision of sufficient generation, transmission, and distribution capacity so as to supply the aggregate electric power and energy requirements of customers, taking into account scheduled and unscheduled outages of system facilities, and 'security' means designing, maintaining, and operating a system that can handle emergencies safely while continuing to operate.
(10) 'Renewable resource' means and includes technologies such as solar photovoltaic energy, solar thermal energy, wind power, low head hydro power, geothermal energy, landfill and mine-based methane gas, energy from waste, and sustainable biomass energy.
(11) 'Retail electric customer' means a direct purchaser of electric power. The term excludes an occupant of a building or facility where the owners or operators manage the internal distribution system serving the building or facility and supply electric power and other related power services to occupants of the building or facility where the owners or operators are direct purchasers of electric power and where the occupants are not direct purchasers.
(12) 'Competitive transition charge' means a nonbypassable charge applied to the bill of every customer accessing the transmission or distribution network in South Carolina, which charge is designed to recover an electric utility's transition or stranded costs as determined by the commission under Section 58-28-160.
(13) 'Transmission costs' and 'distribution costs' means all costs directly or indirectly incurred to provide transmission and distribution services to retail electric customers. This includes the return of and return on facilities and other capital investments necessary to provide transmission and distribution services and associated operating expenses, including applicable taxes.
(14) 'Universal service and energy conservation' means policies, protection, and services that help low-income customers to maintain electric service. The term includes customer assistance programs, termination of service protection and policies, and services that help low-income customers to reduce or manage energy consumption in a cost-effective manner, such as the low-income usage reduction programs, application of renewable resources, and consumer education.
(15) 'Participating utility' means participation in the Customer Choice Program, which is mandatory for investor-owned electric utilities, electric cooperatives, consolidated political subdivisions, municipalities, and the Public Service Authority.
Section 58-28-40. (A) The implementation schedule must be consistent with Section 58-28-20(10).
(B) The commission shall adopt and publish a plan in a timely manner to facilitate implementation consistent with Section 58-28-20(10) for restructuring the South Carolina electric industry, consistent with the policies and procedures established under this chapter. The plan shall address appropriate steps to achieve an orderly transition to a competitive market including, but not limited to, market structure and a consumer protection process.
(C) The plan shall incorporate the substance of this chapter and may include other provisions as the commission considers appropriate and necessary to expedite the transition to and implementation of full customer choice. The plan shall address transition issues, including:
(1) rate certainty for transmission and distribution service;
(2) outstanding federal and state issues;
(3) appropriate regulatory approvals;
(4) legislative intent and public comment.
(D) The plan developed by the commission shall include a program for making customers aware of their new rights and the benefits and risks of customer choice through a customer education process administered by the commission.
Section 58-28-50. In a time frame determined by the commission after the effective date of this chapter, each incumbent electric utility shall file a utility restructuring plan for review and comment before the commission providing for customer choice of an electric generation supplier for all customers as set forth in this chapter and establishing a protocol for the disaggregation of services as required by this chapter.
Section 58-28-60. Pursuant to the timeliness established under Section 58-28-20(10) and by the commission, all customers must be permitted to choose their providers of electric generation services no later than five years after the effective date of this chapter through the following means:
(1) Customers may negotiate a bilateral contract with a generator of electricity, under which contract electricity must be transmitted and distributed to the customer, subject to the provisions of Section 58-28-90(C).
(2) Customers may choose to receive generation and other energy services from a market aggregator. Market aggregators may generate electricity directly, buy and sell electricity, or enter into financial contracts for electric generation resources. Market aggregators may be brokers, cooperatives, buying clubs, municipalities, or other entities which buy or arrange for electric generation services through a power pool or through direct contracts. In no event may a government entity acting as a market aggregator deny its citizens direct access to any other market aggregator.
(3) A default provider or providers for a customer who has not chosen an alternative source of generation must be established by the commission in accordance with Section 58-28-110(C). The commission shall set standards to ensure the participation of default providers serving all classes of customers.
Section 58-28-70. (A) All electricity suppliers must be approved and certified by the commission. Approval and certification shall include:
(1) generation capability of the supplier (owned, contracted, quality of contracts);
(2) quality and reliability history of the supplier, such as quantitative measures for quality performance;
(3) transmission processes which are acceptable to an ISO or other entity should an ISO not be established, such as voltage and output adaptation;
(4) such other matters, requirements, and information as may be required by the commission.
(B) Suppliers shall be allowed market entry based on their compliance with commission regulations, procedures, and requirements. The commission shall not directly fix rates charged by the supplier but may take into account the conditions and circumstances surrounding the provision of such service and may regulate the rate structure. The commission may review such rate structures as to whether they are unreasonably discriminatory and take appropriate action. Suppliers shall file current price lists with the commission.
Section 58-28-80. (A) The commission plan for restructuring of the incumbent electric utilities shall require that all existing electric utilities operationally and financially separate electric generation, transmission, and distribution assets and operations as described in this section.
(B)(1) Both electric distribution companies and other companies which are not electricity suppliers may own transmission facilities.
(2) Affiliates of electricity suppliers and electric distribution companies may own electric generation assets. The affiliates may sell generation directly to a customer as long as generation assets and services are operationally separated from transmission and distribution affiliates, if any, and the transmission and generation affiliate provides for comparability of service for all users and nondiscriminatory pricing.
(3) Affiliates of electricity suppliers and electric distribution companies may offer unbundled generation services as approved by the commission. Prices for unbundled generation services shall not be established directly by the commission but must be based on competitive market forces.
(4) At a time considered appropriate by the commission, the commission shall adopt a plan to provide for the unbundling of charges for meters, meter reading, and customer bulling from the charge for construction, operation, and maintenance of the distribution system for purposes of determining the appropriate payment to the electric distribution company in cases where marketers or other electricity suppliers choose to install and read meters. The metering and billing functions shall initially be under the regulation of the commission and administered through the distribution company which shall acquire, own, install, operate, test, and maintain all meters. These costs must be incorporated into rates regulated by the commission. As competition for these services develops, the commission may provide that they be offered as unbundled competitive services through alternative suppliers.
(5) Competition among electricity suppliers and buyers must be fair, nondiscriminatory, and consistent. In order to ensure a level playing field, all competitors shall be subject to the same legal, regulatory, and tax treatments in the future. Subsidies and disparate regulation or legal requirements that favor certain competitors or disadvantage others shall be eliminated by the commission.
(6) The commission shall adopt a plan designed to permit all electricity suppliers to compete equally to supply power to South Carolina customers and to mitigate concentrations of undue market power.
(C) The billing process shall allow for two separate bills as appropriate. The distribution company shall bill for transmission and distribution services while the supplier shall bill for the supply functions. Customers having an alternative supplier but desiring to receive only one bill shall receive one bill if they so request and if such a requirement is amenable to the supplier and the distributor. The commission shall establish an initial format for billing of unbundled services to ensure that customers have adequate information to determine what services are being purchased. Parties responsible for billing may propose alternative billing formats, but any such alternative format must be approved by the commission before it may be used.
(1) Customer bills shall contain unbundled charges sufficient to enable the customer to determine the basis for those charges.
(2) Any entity responsible for billing customers for electric services must prominently utilize the appropriate name of the service providers on the bill.
(3) Any entity providing billing services must separate components for all services, generation transmission, distribution, stranded cost recovery charge, and social programs.
(D) The electric distribution company shall continue to provide consumer service functions consistent with the regulations of the commission, including meter reading, complaint resolution, and other necessary services to the extent that the electric distribution company continues to provide the services to its customers as part of its unbundled distribution services. Customer services, at a minimum, must be maintained at the same level of quality under direct access.
(E) A service provider must comply with commission regulations, practices, and procedures for changing a customer's service provider. The commission shall develop a process for changing to an alternative provider. This process shall include guidelines for marketers and suppliers to follow. In addition the commission shall have the authority to directly fine and revoke the certification of those entities found guilty of slamming (zapping) electric customers.
(F) The commission shall promulgate regulations to require each electric distribution company, electricity supplier, marketer, aggregator, and broker to provide adequate and accurate customer information to enable customers to make informed choices regarding the purchase of all electricity services offered by that provider. Information must be provided to customers in an understandable format that enables customers to compare prices and services on a uniform basis.
(G) It is the responsibility of all entities who directly bill customers or receive revenues from the sale of electricity and distribution services to collect any and all charges mandated by this chapter including, but not limited to, the stranded cost recovery charge, the monthly distribution fee, transmission charges, municipal franchise fees, taxes, and any other fees mandated by the commission. If a customer elects to receive separate bills for distribution and generation services, the entity billing for distribution services is responsible for collection and payment of these fees. These fees must be promptly forwarded to the appropriate parties. Any billing electricity supplier that is to receive any component of these fees must make arrangements to ensure that these funds are promptly received by the parties to whom they are due. Billing electricity suppliers shall ensure the proper handling of these funds and shall provide assurances of payment to other suppliers of electricity services by electing one of the following two methods:
(1) the billing electricity supplier may arrange with a bank authorized to do business in this State, either by the State of South Carolina or the United States, to receive bill payments from customers in a locked-box escrow account. The escrow agent shall receive these funds and be responsible for the proper disbursement. The escrow agent must forward all funds received from customers in two days. Customer account information is the sole property of the billing electricity supplier;
(2) the billing electricity supplier shall post a surety bond or other performance guarantee in accordance with regulations promulgated by the commission. This bond or guarantee must remain in place while the billing electricity supplier is otherwise in compliance with this provision and until the electricity supplier ceases to sell electricity and collect revenues from customers in South Carolina.
Section 58-28-90. (A) Owners, operators, and providers of transmission and distribution facilities and ancillary services, including all federal, state, and local public power agencies, unless otherwise excluded herein, are required to provide access to those facilities, ancillary services, and other services, including maintenance, installation, repair, and meter reading, available to any buyer or seller on a nondiscriminatory and comparable basis to the extent permissible under federal and state law, including this chapter. The commission shall promote nondiscriminatory open access to the electric system for wholesale and retail transactions.
(B) companies providing transmission or distribution services shall file at the Federal Energy Regulatory Commission or with the commission, as appropriate, comparable service tariffs that provide open access for all competitors. The commission shall monitor jurisdictional companies providing transmission or distribution services and take necessary measures to ensure that no supplier has an unfair advantage in offering access to and pricing the services.
(C) The commission shall establish by regulation, in a manor consistent with federal law, standards, and conditions for the exchange of reciprocal rights for transmission and distribution access between corporations located within this State and those located outside the State. A corporation located outside South Carolina may not be an electricity supplier within the State unless the electric distribution company serving that customer has the reciprocal right, whether exercised or not, by statute, regulation, or voluntary tariff of the out-of-state corporation to serve a customer of the out-of-state corporation, if any.
Section 58-28-100. Five years from the effective date of this chapter, all intrastate owners and operators of transmission and distribution facilities shall have comparable and reciprocal access to the transmission and distribution customers of other transmission and distribution facility owners and operators, for the purpose of providing generation services to the customers. This section does not impede any transactions involving interstate commerce.
Section 58-28-110. (A) The local utility is relieved of its traditional obligation to serve, except as required to carry out the default service function, but has an obligation to connect all customers within its service territory on nondiscriminatory terms and conditions. The incumbent local utilities must be allowed to maintain their existing territorial assignments, but these assignments must be limited to distribution and transmission services only.
(B) Consumers shall have the right to select their source of power supply and shall have nondiscriminatory access to interconnection with their host electric utility, which utility is required to transport the electricity from the point of delivery by the generation supplier to the consumer's facility through the host's distribution facilities.
(C) Customers that do not elect an alternative generation supplier, as well as those that experience supplier power delivery failures and require emergency service shall obtain default services from a default provider under such terms and conditions and in a manner as provided by the commission. The default service provider is the host utility, the distribution company that provides distribution service to that customer. The default service function, which must be provided initially by the distribution company, is subject to competition following the period of transition and a determination by the commission.
Section 58-28-120. The right of eminent domain may not be used to:
(1) deny physical access or interconnection to transmission or distribution facilities;
(2) restrict the construction of new transmission or distribution facilities by any qualified party; or
(3) otherwise limit competition.
Section 58-28-130. (A) To the extent that the commission has jurisdiction over transmission and distribution pricing, the commission shall encourage pricing mechanisms to enhance reliability, compensate transmission owners fairly, allow for the widest possible markets, and relieve transmission congestion.
(B) The commission, pursuant to guidelines and procedures established by it, shall conduct a proceeding to address and provide for the unbundling of the utilities on both a functional basis and on a service basis.
(C) The commission shall establish reasonable rates for unbundled local distribution services and, to the extent the commission retains jurisdiction, for unbundled transmission services. The rates shall provide for jurisdictional transmission costs and distribution costs of providing distribution services.
(D) Each incumbent electric utility shall file unbundled service tariffs to provide services to all eligible customers on a nondiscriminatory basis.
(E) The commission shall have jurisdiction over all aspects of transmission rates and services not subject to the exclusive jurisdiction of the Federal Energy Regulatory Commission.
Section 58-28-140. The subsidies for environmental, universal service, energy conservation, and other mandated programs must be unbundled from electric rates and clearly shown on the customer's bill. The commission annually shall prepare and submit a report to the General Assembly that recommends legislative action, as appropriate, to remove barriers to fair competition.
Section 58-28-150. All electric distribution companies are subject to:
(1) the jurisdiction of the commission and must be regulated on the same basis including, but not limited to, regulation of rates, terms, and conditions; and
(2) uniform tax obligations to the extent that the electric distribution companies are subject to taxation on the effective date of this chapter.
Section 58-28-160. (A)(1) Following the process established in this section, utilities are entitled to recover prudently incurred, net, verifiable stranded costs and investments.
(2) It is the intent of the General Assembly to provide appropriate tools and reasonable guidance to the commission in order to assist the commission in addressing claims for stranded cost recovery and fulfilling the commission's responsibility to determine rates which are equitable, appropriate, balanced, and in the public interest. In making its determinations, the commission shall balance the interests of the customers and utility investors during the limited recovery period. Pursuant to guidelines and procedures established by the commission, the commission shall conduct a proceeding to address the issue of stranded costs and provide for the recovery of prudently incurred, net, verifiable stranded costs as determined by the commission under definitions, procedures, and methodology adopted by the commission. Stranded costs are recoverable through a nonbypassable stranded costs charge referred to as a Competitive Transition Charge (CTC), which must be levied on the bills of all retail customers. Whenever a customer acquires electricity directly from a supplier and bypasses the transmission and distribution system of a utility, arrangements must by developed between the customer, customer's supplier, and the utility which allows the customer to pay the CTC or that customer's appropriate share of the stranded costs. A period not to exceed ten years for the recovery of stranded costs, beginning with the implementation of restructuring, is a reasonable time frame. The time period allowed for recovery is a function of the size total stranded costs estimate for all electric utilities in South Carolina. At the end of the phase-in period, the commission shall conduct a true-up proceeding to reevaluate the appropriate level of stranded costs. This proceeding shall reflect events subsequent to the initial hearing and shall provide a stranded costs estimate to be used for the initial year of full implementation. Thereafter, true-up hearings regarding stranded costs must be held annually, or as determined by the commission, until the time period of recovery has elapsed or stranded costs have been recovered.
(3) Stranded costs recovery must begin at the time of the phase-in for those customers exercising customer choice. Other customers shall continue at existing rate levels.
(B) Electric utilities shall prudently, thoroughly, and aggressively mitigate stranded costs as of the effective date of this chapter.
(C)(1)(a) The commission shall approve and publish a recovery plan for each utility.
(b) All electricity suppliers shall provide or supply direct access to customers pursuant to this chapter and are eligible for stranded cost recovery according to the provisions of this section. The commission shall establish an appropriate timetable for the examination and determination of all electricity supplier's stranded costs.
(c) Any stranded costs not recovered under this chapter and the recovery plan, as modified and approved by the commission, within ten years shall not be recoverable by the public utility.
(2) Electricity suppliers shall cooperate with the commission in the implementation of this chapter as a condition for recovery of stranded costs. Approval of a recovery plan and collection and the
disbursement to the electrical supplier of any stranded costs is deemed a settlement of all the claims by an electricity supplier. No electricity supplier seeking to establish claims for recovery of stranded costs through any other means is eligible for recovery pursuant to a recovery plan or the collection of a stranded cost recovery charge. All electricity suppliers shall provide direct access to customers pursuant to this chapter and are eligible for stranded cost recovery according to the provisions of this section, and the commission shall establish an appropriate timetable for the examination and determination of all electricity suppliers' stranded costs.
(3) The commission shall make the final determination of permissible stranded cost recovery charges for each electricity supplier and for approval of the recovery plan, subject to its determination in a rate case proceeding that the charge and the plan are equitable, appropriate, balanced, and promote customer choice.
(D)(1) Electricity suppliers must be allowed to recover the net unmitigatable stranded costs associated with required environmental mandates currently approved for cost recovery and power acquisitions mandated by federal statutes.
(2) Electricity suppliers shall take all reasonable measures to prudently, thoroughly, and aggressively mitigate stranded costs. Mitigation measures may include, but are not limited to:
(a) reduction of expenses;
(b) renegotiation of existing contracts;
(c) refinancing of existing debt;
(d) sale, write-off, or write-down of uneconomic or surplus assets, including regulatory assets not directly related to the provision of electricity service.
(3) Power purchase contract obligations shall continue for the duration of the contract. Costs arising pursuant to the contracts or associated with any buy-out, buy-down, or renegotiation of the contracts shall be eligible for recovery through the Competitive Transition Charge.
(4) Stranded benefits must be used to offset stranded costs.
(5) Any recovery of stranded costs must be through a nonbypassable, nondiscriminatory, appropriately structured access charge that is fair to all customer classes, lawful, constitutional, limited in duration, and consistent with the promotion of fully competitive markets. Stranded cost recovery charges must be based on the energy consumption and class of each customer as determined by the commission.
(6) The commission is authorized to allow electricity suppliers to collect a Competitive Transition Charge. The burden of proof for any stranded cost recovery claim must be borne by the electricity supplier making the claim. The stranded cost recovery charge must be assessed as a separate line item on a customer's bill.
Section 58-28-170. (A) the commission shall promulgate regulations which ensure that reliable and safe electric service, with residential consumer service safeguards, is maintained or improved.
(B) all electric utilities and providers of electric power delivery and ancillary services shall have in place sufficient measures to preserve the integrity, safety, reliability, and quality of electric service in South Carolina. Market entrants shall have appropriate provisions for capacity reserves, spinning reserves, and other ancillary services while maintaining the integrity of the bulk transmission network.
Section 58-28-180. Nothing in this chapter shall be construed to interfere with the rights of parties under contract. Electric rates which by court decision or contract were frozen as of a particular date must remain at that level after the effective date of this chapter regardless of the electric power provider, unless the customer affected agrees otherwise.
Section 58-28-190. No electric distribution company is liable for damages to a current or future customer if the customer's chosen generation supplier or provider of unbundled services fails to deliver the service in accordance with the terms of its bilateral contract with the customer. This provision may not be applied to relieve liability arising from the electric distribution company's own actions or failure to act.
Section 58-28-200. The commission shall develop a plan in a timely manner following the effective date of this chapter to provide for the expedited review and resolution of disputes related to violations of the open access provisions of Section 58-28-90.
Section 58-28-210. Any existing jurisdictional uncertainties or disputes regarding electric distributors or suppliers shall not delay the implementation of this chapter.
Section 58-28-220. If any provision or application of this chapter to a person or circumstance is held invalid, the invalidity shall not affect other provisions, or applications of the chapter which shall be given effect without the invalid provision or application, and to this end, the provision of this chapter are declared severable."
SECTION 2. (A) Section 57 of Act 173 of 1987 is designated as Section 58-27-690 of the 1976 Code.
(B) Section 58-27-690 of the 1976 Code, as enacted by Section 57 of Act 173 of 1987 and amended by Section 1567 of Act 181 of 1993, is further amended to read:
"Section 58-27-690. Nothing in Title 28, Chapter 2 (Sections 28-2-10 et seq.), and Sections 1-11-110, 3-5-50, 3-5-100, 3-5-330, 4-17-20, 5-27-150, 5-31-420, 5-31-430, 5-31-440, 5-31-610, 5-35-10, 6-11-130, 6-23-290, 13-1-350, 13-11-80, 24-1-230, 28-3-20, 28-3-30, 28-3-140, 28-3-460, 46-19-130, 48-11-110, 48-15-30, 48-15-50, 48-17-30, 48-17-50, 49-17-1050, 49-19-1060, 49-19-1440, 50-13-1920, 50-19-1320, 51-1-560, 54-3-150, 55-9-80, 55-11-10, 57-3-700, 57-5-370, 57-5-380, 57-21-200, 57-25-190, 57-25-470, 57-25-680, 57-27-70, 58-9-2030, 58-15-410, 58-17-1200, 13-1-1330, 58-27-130, 58-31-50, 59-19-200, 59-105-40, 59-117-70, 59-123-90 shall modify, abridge, or repeal Sections 58-27-650, 58-27-670, 58-27-680, 58-27-1280, or 58-27-1360."
SECTION 3. Prior to July 15, 2000, the Public service Commission shall provide to the Governor and the General Assembly a report of its findings and implementation plan in anticipation of commencement of the implementation schedule for customer choice as provided by Chapter 28 of Title 58 of the 1976 Code, as enacted pursuant to Section 1 of this Act. The schedule for phase-in of direct access provided by Section 58-28-40 shall not commence unless approved by joint resolution of the General Assembly.
SECTION 4. Article 3 of Chapter 27 of Title 58 and Sections 58-27-610, 58-27-620, 58-27-630, 58-27-640, 58-27-650, 58-27-660, 58-27-670, and 58-27-680 of the 1976 Code are repealed ninety days after the effective date of Chapter 28 of Title 58, as enacted pursuant to Section 1 of this Act.
SECTION 5. Except as otherwise provided by this act, this act takes effect upon approval by the Governor.
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