A bill

 

TO AMEND THE SOUTH CAROLINA CODE OF LAWS SO AS TO ENACT THE "SOUTH CAROLINA RATEPAYER PROTECTION AND LARGE LOAD CUSTOMER INFRASTRUCTURE ACCOUNTABILITY ACT" BY ADDING CHAPTER 44 TO TITLE 58 SO AS TO PROVIDE DEFINITIONS, PROHIBIT INCREMENTAL COSTS RESULTING FROM LARGE LOAD CUSTOMERS TO BE RECOVERED FROM CUSTOMERS IN ANOTHER CUSTOMER CLASS; TO ESTABLISH CONTRACT REQUIREMENTS BETWEEN LARGE LOAD CUSTOMERS AND ELECTRICAL UTILITIES; TO ESTABLISH REVIEW STANDARDS FOR THE PUBLIC SERVICE COMMISSION; AND TO REQUIRE ANNUAL REPORTS FROM LARGE LOAD CUSTOMERS; BY ADDING SECTION 13-1-80 SO AS TO ESTABLISH REQUIREMENTS REGARDING INCENTIVES THAT MAY BE OFFERED TO POTENTIAL LARGE LOAD CUSTOMERS; BY ADDING SECTION 6-29-550 SO AS TO ESTABLISH REQUIREMENTS REGARDING PUBLIC NOTICE, PUBLIC HEARINGS, AND LOCAL GOVERNMENTAL CERTIFICATIONS CONCERNING PLANNING AND ZONING PRIOR TO THE RECEIPT OF CERTAIN PERMITS OR INCENTIVES; AND BY ADDING SECTION 49-1-100 SO AS TO REQUIRE POTENTIAL LARGE LOAD CUSTOMERS TO PROVIDE PLANS REGARDING WATER RESOURCES AND ANNUAL REPORTING REQUIREMENTS TO THE DEPARTMENT OF ENVIRONMENTAL SERVICES AND TO REQUIRE THE DEPARTMENT OF ENVIRONMENTAL SERVICES TO VERIFY WATER USAGE CONTINGENCY PLAN ADHERENCE IN THE EVENT OF A DROUGHT.

 

Whereas, large electric loads could require new generation, transmission, and distribution, creating the risk of cost-shifting to an electrical utility's existing customers; and

 

Whereas, the General Assembly has a compelling interest to ensure rate payer neutrality and prevent stranded costs; and

 

Whereas, any governmental incentive offered to entities with large electric loads must be transparent, performance-based, and auditable; and

 

Whereas, projects should not impose disproportionate environmental burdens on already overburdened communities; and

 

Whereas, the State welcomes investment but requires investment to be self-supporting and accountable. Now, therefore,

 

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

 

SECTION 1.  This act may be cited as the "South Carolina Ratepayer Protection and Large Load Customer Infrastructure Accountability Act."

 

SECTION 2.  Title 58 of the S.C. Code is amended by adding:

 

CHAPTER 44

 

South Carolina Ratepayer Protection and Large Load Customer Infrastructure Accountability Act

 

    Section 58-44-10.  For purposes of this chapter:

    (1) "Commission" means the Public Service Commission.

    (2) "Data center" means any facility over five thousand square feet that houses computer systems, servers, networking equipment, or storage systems, whether for commercial, governmental, or private use, and includes colocation centers and modular or containerized data units located on the same parcel.

    (3) "Electrical utility" has the same meaning as provided in Section 58-27-10(7) as well as the South Carolina Public Service Authority.

    (4) "Large load customer" means any electrical customer with a projected peak demand of a minimum of 50MW or as otherwise established by a Public Service Commission rule.

    (5) "Qualifying utility infrastructure" means any infrastructure for the generation, transmission, or distribution of electricity. This includes, but is not limited to, substations, interconnection facilities, and network upgrades.

    (6) "Ratepayer neutrality" means no incremental costs attributable to a large load customer's project are borne by nonparticipating customer classes.

    (7) "Stranded costs" means unrecovered investments made by the electrical utility to serve the large load customer's project resulting from the project's termination or reduction of the project's electrical demand.

 

    Section 58-44-20.  An electrical utility shall not recover any incremental costs incurred to serve a large load customer from customers in another customer class.

 

    Section 58-44-30.  (A) Prior to receiving electrical service, a large load customer must enter into a contract with the electrical utility that must be approved by the commission. The contract provisions must include, but not be limited to:

        (1) identification of all new facilities and all upgrades to its existing facilities in order for the electrical utility to meet the large load customer's electrical needs;

       (2) an agreement that the large load customer will either:

           (a) participate in the electrical utility's demand response program so that the large load customer's electrical use may be curtailed during emergencies; or

           (b) pay an increased amount for firm service to reflect additional reliability costs;

        (3) establishment of a minimum electric service threshold, for a period of no less than twenty years, in an amount to allow the electrical utility to recover the costs for all new electric facilities and related upgrades in order for the electrical utility to meet the large load customer's electrical needs; and

        (4) a requirement that in the event that the large load customer terminates its electric service or reduces its anticipated electric demand before the electrical utility recovers its costs associated with serving the large load customer, the large load customer shall pay the remaining amount to the electrical utility.

    (B) An electrical utility shall not offer or otherwise provide a discounted electric rate to a large load customer in a manner that would shift costs related to the large load customer to customers in other electric rate classes.

    (C) The commission shall not approve any contract, interconnection agreement, or electric rate that could permit customers of another class to pay for the costs related to any large load customer. In addition, the commission shall not approve any contract or rate unless it finds the proposed potential large load customer's project will provide a public net benefit to the State including, but not limited to, employment impact, infrastructure resilience, and community burden mitigation.

    (D) The commission shall require a financial security to be provided by the large load customer, in an amount to be determined by the commission.

 

    Section 58-44-40. (A) In reviewing any contract, rate, interconnection agreement, or service arrangement for a large load customer pursuant to this chapter, the commission may apply tiered review standards and conditions based on the characteristics and impacts of the large load customer's proposed project.

    (B) In determining whether to apply tiered standards or additional conditions, the commission may consider factors including, but not limited to:

       (1) the projected employment impact, including job quantity, job categories, and average wages;

       (2) the volatility or variability of the large load customer's projected electrical demand;

       (3) the duration and firmness of the large load customer's load commitment;

       (4) the extent of on-site electric generation, backup generation, or reliance on emergency power systems;

       (5) the anticipated water usage, cooling methods, or other resource demands;

       (6) the magnitude of new generation, transmission, or distribution infrastructure required to serve the project;

       (7) the project's location relative to overburdened or environmentally sensitive communities; and

       (8) any other factor the commission determines is necessary to protect ratepayer neutrality, grid reliability, or the public interest.

    (C) Based upon the commission's evaluation, the commission may impose reasonable and nondiscriminatory conditions including, but not limited to:

       (1) enhanced financial security requirements;

       (2) modified minimum service thresholds or contract durations;

       (3) additional reporting or audit requirements;

       (4) participation in demand response or curtailment programs; or

       (5) limitations on cost recovery mechanisms.

    (D) Nothing in this section shall be construed to prohibit or discourage economic development; however, no approval shall be granted unless the commission finds that the proposed service arrangement protects existing ratepayers from cost-shifting and stranded costs.

 

    Section 58-44-50.  (A)No later than July first of each year, each large load customer shall provide a report to the commission which shall include the large load customer's:

       (1) peak MW;

       (2) annual MWh;

       (3) number of demand response and curtailment events;

       (4) on-site general run time, specifying emergency and testing events; and

       (5) for data centers, the number of gallons of water withdrawn for cooling.

If the large load customer received any incentive from state or local government, the report must also include the number of employees, job categories, and wages.

    (B) The commission must post each report on its website.

 

SECTION 3.  Article 1, Chapter 1, Title 13 of the S.C. Code is amended by adding:

 

    Section 13-1-80. (A)(1) The department shall not offer any incentive to a potential large load customer, as defined in Section 58-44-10, nor work with any other entity to provide an incentive, unless the potential large load customer provides proof of:

           (a) compliance with Chapter 44, Title 58; and

           (b) mitigation of community impacts, as determined by the Department of Environmental Services.

       (2) If the potential large load customer provides proof of the requirements in item (1) and incentives are offered to the potential large load customer by any entity based in whole or in part for future employment, wages, or training commitments, those commitments must be made in writing and must be measurable for future review of implementation.

    (B) A potential large load customer may not receive, nor may any entity provide, an incentive to a potential large load customer until the potential large load customer has complied with its obligations pursuant to Section 49-1-100 and Chapter 44, Title 58, as applicable. However, this subsection shall not prevent a prospective incentive from being offered based upon a future condition or requirement to be fulfilled by the potential large load customer as permitted by law.

    (C) In the event a large load customer receives an incentive from any entity based upon future conditions or requirements and the large load customer fails to adhere to those conditions or requirements, the large load customer shall either reimburse or pay the monetary value of the incentive to the department. The department must conduct audits to evaluate the large load customer's fulfillment of conditions or requirements for incentives as needed but on no less than a biennial basis.

 

SECTION 4.  Article 3, Chapter 29, Title 6 of the S.C. Code is amended by adding:

 

    Section 6-29-550.  (A) A potential large load customer, as defined in Section 58-44-10, shall not receive any permits or incentives from a local governing authority prior to a public hearing on the potential project. There must be at least thirty days' notice of the time and place of this public hearing, and notice must be given in a newspaper having general circulation in the jurisdiction and on the local governing authority's website. Notice must also be mailed to property owners within a one-mile radius of the proposed site for the large load customer's project. If only one public hearing is held, it must be held at a time and in a manner to encourage maximum public participation. The following information regarding the potential large load customer must be provided to the public prior to the public meeting including, but not limited to, the large load customer's:

       (1) anticipated electric load;

        (2) back-up electric generation plan;

        (3) anticipated water usage;

        (4) traffic impacts; and

        (5) construction plans.

    (B) In addition to the provisions of subsection (A), a potential large load customer shall not receive any permits or incentives without the local governing authority first certifying that the project shall be compatible with the local governing authority's comprehensive planning and zoning requirements.

 

SECTION 5.  Chapter 1, Title 49 of the S.C. Code is amended by adding:

 

    Section 49-1-100.  (A) In addition to any other permitting requirements, a potential large load customer, as defined in Section 58-44-10, shall submit to the Department of Environmental Services its plans regarding water resources. This shall include, but not be limited to:

       (1) the amount of water to be consumed per month;

       (2) plans to mitigate water consumption;

       (3) a list of all chemicals to be utilized for any water or wastewater treatment by the potential large load customer; and

       (4) a contingency plan for water usage in the event of a drought.

This information shall be available to the public and the Department of Environmental Services shall hold at least one public hearing regarding water usage plans by the potential large load customer prior to issuing any permits.

    (B)(1) A large load customer must submit an annual report regarding its water usage to the Department of Environmental Services by January first. The Department of Environmental Services may confirm that the large load customer's water usage is in accordance with its report at any time, but shall conduct a confirmation at least once every three years.

       (2) In the event that the county in which the large load customer is located is in a drought status, the Department of Environmental Services must verify that the large load customer is adhering to its contingency plan for water usage.

 

SECTION 6.  This act takes effect upon approval by the Governor and shall apply to all applications and requests by potential large load customers regarding electric rates and any permits made on or after that date.

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