A bill

 

TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY AMENDING SECTION 58-37-20, RELATING TO THE PUBLIC SERVICE COMMISSION, SO AS TO PROVIDE FOR DEMAND-SIDE PILOT PROGRAMS; BY AMENDING SECTION 58-37-120, RELATING TO APPLICATIONS FOR PERMIT, SO AS TO REQUIRE A PUBLIC COMMENT PERIOD FOR ANY APPLICATION FOR A PERMIT FOR AN ENERGY INFRASTRUCTURE PROJECT AND to REQUIRE NOTICE TO AFFECTED LANDOWNERS IF A PUBLIC UTILITY THAT PLANS TO CONSTRUCT, OR HAS ENTERED INTO AGREEMENTS TO CONSTRUCT, AN ENERGY INFRASTRUCTURE PROJECT THAT MAY RESULT IN THE USE OF EMINENT DOMAIN AND TO PRESCRIBE THE METHODS AND CONTENT OF THE NOTICE; BY ADDING SECTION 58-37-835 SO AS TO PROVIDE FOR THE TERMS AND CONDITIONS OF ELECTRIC SERVICE TO COMMERCIAL DATA CENTERS; BY ADDING SECTION 58-37-836 SO AS TO PROVIDE FOR REPORTS TO THE DEPARTMENT OF ENVIRONMENTAL SERVICES CONCERNING SURFACE AND GROUND WATER USED BY COMMERCIAL DATA CENTERS; BY AMENDING SECTION 12-36-2120, RELATING TO EXEMPTIONS FROM SALES TAX, SO AS TO PROVIDE THAT THE COMPUTER EQUIPMENT EXEMPTION IS AVAILABLE TO A TAXPAYER THAT ENTERED INTO A FEE IN LIEU AGREEMENT ON OR BEFORE MAY 30, 2025; TO PROVIDE THAT THE EXEMPTION FOR ELECTRICY USED BY A TECHNOLOGY INTENSIVE FACILITY IS NOT AVAILABLE TO A TAXPAYER THAT DID NOT CLAIM THE CREDIT PRIOR TO MAY 30, 2025; TO PROVIDE THAT TO CLAIM THE EXEMPTION FOR ORIGINAL OR REPLACEMENT COMPUTERS, COMPUTER EQUIPMENT, AND COMPUTER HARDWARE AND SOFTWARE PURCHASES USED IN A DATACENTER, THE TAXPAYER MUST HAVE NOTIFIED THE DEPARTMENTS OF REVENUE AND COMMERCE OF ITS INTENTION TO CLAIM THE CREDIT ON OR BEFORE MAY 30, 2025; AND TO PROVIDE THAT THE EXEMPTION FOR ORIGINAL OR REPLACEMENT COMPUTERS, COMPUTER EQUIPMENT, AND COMPUTER HARDWARE AND SOFTWARE PURCHASES USED IN A DATACENTER THE TAXPAYER MUST HAVE BEEN CERTIFIED BY THE DEPARTMENT OF COMMERCE PRIOR TO MAY 30, 2030.

 

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

 

SECTION 1.  Sections 58-37-20 (B) and (C) of the S.C. Code are amended to read:

 

    (B) The commission may shall approve any program filed by a public utility if the program is found to be cost-effective.  Furthermore, the commission may, in its discretion, approve demand-side pilot programs and any program filed by a public utility that is not cost-effective, so long as the proposed demand-side management program is targeted to low-income customers, provided that and the public utility's portfolio of demand-side management programs is cost-effective as a whole.

    (C) The South Carolina Public Service Commission must adopt procedures that require electrical utilities and public utilities providing gas services subject to the jurisdiction of the commission to plan for and invest in all reasonable, prudent, and available energy efficiency and demand-side resources that are cost-effective energy efficient technologies and energy conservation programs in an amount to be determined by the commission that achieve net energy savings of at least 0.66 percent of total retail sales as of May 15, 2027, or a higher level as determined by the commission. Energy efficiency shall be considered a component of the requirement for a utility to make every reasonable effort to minimize fuel costs as outlined in Section 58-27-865(F) and the commission may grant a proportional disallowance based on evidence in the record. If an electrical utility fails to meet the requirements of this section as determined by the commission, then the commission is authorized to appoint a third-party administrator to carry out the residential low-income energy efficiency duties pursuant to this section on behalf of the electrical utility if the commission determines that having such a third-party administrator is in the public interest and consistent with law. Such a program shall be funded through the existing energy efficiency rider mechanism with those funds transferred to the third-party administrator. Upon notice and hearings that the commission may require, the commission may issue rules, regulations, or orders pursuant to this chapter to implement applicable programs and measures under this section.  If adopted, these procedures must:  provide incentives and cost recovery for energy suppliers and distributors who invest in energy supply and end-use technologies that are cost-effective, environmentally acceptable, and reduce energy consumption or system or local coincident peak demand;  allow energy suppliers and distributors to recover costs and obtain a reasonable rate of return on their investment in qualified demand-side management programs sufficient to make these programs at least as financially attractive as construction of new generating facilities;  require the Public Service Commission to establish rates and charges that ensure that the net income of an electrical or gas utility regulated by the commission after implementation of specific cost-effective energy conservation measures is at least as high as the net income would have been if the energy conservation measures had not been implemented.

 

SECTION 2.  Section 58-37-120(A)(1) of the S.C. Code is amended to read:

 

    (A)(1) Any agency presented with an application for a permit for an energy infrastructure project shall promptly provide a public comment period if required by regulation and shall review and issue a decision on the application no later than six months after the date the application is received by the agency.  If the agency fails to undertake review of and take final action upon the application within the six-month review period, as defined in subsection (A)(3), then the application shall be deemed approved, and the agency shall promptly issue documentation of such approval.

 

SECTION 3.  Section 58-37-120 of the S.C. Code is amended by adding:

 

    (E) No later than sixty days prior to filing a permit application pursuant to this section, a public utility that plans to construct, or has entered into agreements to construct, an energy infrastructure project that may result in the use of eminent domain must provide written notice, via certified United States mail, to any property owners whose property may be acquired or condemned. The notice must clearly state the need for the project, its preferred and any alternative locations or routes, a phone number or email address that property owners may contact at the public utility, and an appropriate contact at the Office of Regulatory Staff. No later than thirty days after an application is filed, the public utility must hold a public meeting to solicit feedback from interested members of the affected community. As soon as practicable after an application is filed, the public utility must provide public notice of the meeting required pursuant to this section in a newspaper or other publication of general circulation in each county where the project is proposed to be located. Written notice must also be provided to all landowners whose property may be affected.

 

SECTION 4.  Chapter 27, Title 58 of the S.C. Code is amended by adding:

 

    Section 58-27-835. (A) For the purposes of this section:

       (1) "Commercial data center" means a facility, campus of facilities, or array of interconnected facilities in this State used by an entity or other business enterprise to operate, manage, or maintain a computer, group of computers, or other organized assembly of hardware and software for the primary purpose of storing, retrieving, or transmitting data and that has a peak demand of one hundred megawatts or greater.

       (2) "Electric service provider" means an electrical utility, consolidated political subdivisions, electric cooperatives, and the Public Service Authority.

    (B) Notwithstanding any other provision of law, an electric service provider shall require additional terms and conditions of electric service including, without limitation, rates, charges, minimum billing requirements, and longer terms of contract, designed to ensure all costs associated with serving or preparing to serve commercial data centers are recovered solely, or at least substantially, from commercial data centers. These terms and conditions shall include at least:

       (1) a contract term of at least fifteen years;

       (2) minimum billing requirements;

       (3) a requirement that the commercial data center, upon termination of its contract for electric service, pay any unrecovered costs incurred in serving or preparing to serve the commercial data center including, but not limited to, distribution, transmission, and generation costs associated with the provision of electric service to the commercial data center;

       (4) collateral from the commercial data center to be paid to the electric service provider in the event the commercial data center terminates its contract prior to the contract expiration date. The electric service provider must maintain this collateral in a separate account. In the event the account earns any interest, that interest amount must be applied towards the commercial data center's outstanding costs, less any administrative fees the electric service provider may have incurred due to the account; and

       (5) a requirement that the commercial data center, upon termination of its contract for electric service, pay any unrecovered costs incurred in serving or preparing to serve the commercial data center to the electric service provider. This must include, but not be limited to, distribution, transmission, and generation costs associated with the provision of electric service to the commercial data center.

    (C) Any contract pursuant to this section must be approved by the Public Service Commission. Before the commission approves a contract, it must determine that the contract meets the requirements of this section and that costs associated with increased fuel requirements, generation costs, and transmission costs that:

       (1) are substantially related to the provision of electric services to the commercial data center; and

       (2) would not have been incurred but for the electric demand of such commercial data center, shall be recovered solely by the electric service provider from the commercial data center.

    (D) The provisions of this section shall not apply to a commercial data center that is a customer of an electric service provider in this State as of May 15, 2025.

 

    Section 58-27-836. A commercial data center, as defined in Section 58-27-835, must report to the Department of Environmental Services annually by January thirty first the amount of surface water and ground water the commercial data center utilized withing the prior twelve months and the anticipated amount of surface water and ground water to be utilized during the next twelve months. The department may assess a civil penalty against the owner of a commercial data center of not more than ten thousand dollars for each day after January thirty first that the report is not filed with the department.

 

SECTION 5.  Section 12-36-2120(65)(a) of the S.C. Code is amended to read:

 

    (65)(a) computer equipment, as defined in subitem (c) of this item, used in connection with a technology intensive facility as defined in Section 12-6-3360(M)(14)(b), where:

           (i) the taxpayer invests at least three hundred million dollars in real or personal property or both comprising or located at the facility over a five-year period;

           (ii) the taxpayer creates at least one hundred new full-time jobs at the facility during that five-year period, and the average cash compensation of at least one hundred of the new full-time jobs is one hundred fifty percent of the per capita income of the State according to the most recently published data available at the time the facility's construction starts;  and

           (iii) at least sixty percent of the three hundred million dollars minimum investment consists of computer equipment; and

           (iv) the taxpayer entered into a fee-in-lieu agreement on or before May 30, 2025, and any subsequent renewal of the agreement;

 

SECTION 6.  Section 12-36-2120(66) of the S.C. Code is amended to read:

 

    (66) electricity used by a technology intensive facility as defined in Section 12-6-3360(M)(14)(b) and qualifying for the sales tax exemption provided pursuant to item (65) of this section on or before May 30, 2025, and the equipment and raw materials including, without limitation, fuel used by such qualifying facility to generate, transform, transmit, distribute, or manage electricity for use in such a facility. The running of the periods of limitation within which the department may assess taxes pursuant to Section 12-54-85 is suspended during the same time period it is suspended in item (65)(d) of this section;

 

SECTION 7.  Section 12-36-2120(79)(C)(1) of the S.C. Code is amended to read:

 

    (C)(1) To qualify for the exemption allowed by this item, a taxpayer, and the facility in the case of a seventy-five million dollar investment made by more than one taxpayer, shall, on or before May 30, 2025, notify the Department of Revenue and Department of Commerce, in writing, of its intention to claim the exemption. For purposes of meeting the requirements of subitems (B)(5)(ii) and (B)(5)(iii) , capital investment and job creation begin accruing once the taxpayer notifies each department. Also, the five-year period begins upon notification.

 

SECTION 8.  Section 12-36-2120(79)(G) of the S.C. Code is amended to read:

 

    (G) This subitem only applies to a datacenter that is certified by the Department of Commerce pursuant to subitem (D)(1) prior to January 1, 2032May 30, 2030. However, this item shall continue to apply to a taxpayer that is certified by December 31, 2031May 29, 2030, for an additional ten ten-year period. Upon the end of the ten ten-year period, this subitem is repealed;

 

SECTION 9.  This act takes effect upon approval by the Governor.

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