A bill

 

TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY ADDING ARTICLE 12 TO CHAPTER 5, TITLE 58 SO AS TO REQUIRE A PUBLIC UTILITY PROVIDING NATURAL GAS DISTRIBUTION SERVICES TO RESIDENTIAL CUSTOMERS TO ESTABLISH AND MAINTAIN NATURAL GAS PRICE RESERVES, AND TO PROVIDE FOR FUNDING USAGE AND COST RECOVERY; AND TO REQUIRE AN ANNUAL REPORT TO THE PUBLIC SERVICE COMMISSION.

 

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

 

SECTION 1.  Chapter 5, Title 58 of the S.C. Code is amended by adding:

 

Article 12

 

Natural Gas Price Reserve

 

    Section 58-5-1210. For purposes of this article:

    (1) "Extraordinary gas costs" means wholesale gas costs that exceed historical seasonal averages by a threshold established by regulation, including costs arising from spot market or daily index pricing.

    (2) "Natural gas price reserve" means a restricted fund established for the sole purpose of mitigating the rate impact of extraordinary natural gas costs for residential customers.

    (3) "Public utility" has the same meaning as provided in Section 58-5-10.

 

    Section 58-5-1220. (A) Notwithstanding any other provision of law, a public utility providing natural gas distribution service to residential customers must establish and maintain a natural gas price reserve. This natural gas price reserve shall be funded by modest per-therm surcharges during nonemergency periods, excess margins realized during favorable pricing years, and revenues derived from natural gas capacity releases. Funds in a natural gas price reserve may only be used to offset extraordinary natural gas costs, and may be utilized over multiple billing cycles, in order to reduce immediate rate shock to residential customers.

    (B) Costs for a natural gas price reserve must not be recovered from residential customers in a single billing cycle unless funds in the natural gas price reserve are insufficient and the Public Service Commission makes written findings explaining the necessity of immediate recovery of costs.

 

    Section 58-5-1230. A public utility providing natural gas distribution must submit an annual report to the Public Service Commission that details the natural gas price reserve's:

    (1) amount of funds utilized and reasons regarding the usage of those funds;

    (2) fund balance; and

    (3) impact on residential customer rates.

 

SECTION 2.  This act takes effect upon approval by the Governor.

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