A BILL TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY ENACTING THE "SOUTH CAROLINA ELECTRIC COOPERATIVE CONSUMER PROTECTION AND WHOLESALE MARKET ACCESS ACT" BY ADDING ARTICLE 29 TO CHAPTER 27, TITLE 58 SO AS TO PROVIDE DEFINITIONS, ESTABLISH REQUIREMENTS FOR GENERATION AND TRANSMISSION COOPERATIVES FOR MAJOR CAPITAL EXPENDITURE CONTRACTS OR AGREEMENTS, AND ESTABLISH AN OVERSIGHT AND APPROVAL PROCESS BY THE PUBLIC SERVICE COMMISSION; TO REQUIRE GENERATION AND TRANSMISSION COOPERATIVES TO FILE PROPOSED RATES AND TERMS OF SERVICE TO DISTRIBUTION COOPERATIVES FOR APPROVAL BY THE PUBLIC SERVICE COMMISSION AND TO REQUIRE TRIENNIAL WHOLESALE RATE REVIEWS BY THE PUBLIC SERVICE COMMISSION; TO ESTABLISH THAT DISTRIBUTION COOPERATIVES HAVE A RIGHT TO PETITION THE PUBLIC SERVICE COMMISSION FOR EXIT SETTLEMENTS FROM WHOLESALE POWER CONTRACTS WITH A GENERATION AND TRANSMISSION COOPERATIVE AND TO PROVIDE PROCESSES AND STANDARDS FOR EXIT SETTLEMENTS; TO PROHIBIT GENERATION AND TRANSMISSION COOPERATIVES FROM TAKING CERTAIN UNILATERAL ACTIONS WITHOUT THE PUBLIC SERVICE COMMISSION'S APPROVAL; TO REQUIRE THE OFFICE OF REGULATORY STAFF TO REPRESENT DISTRIBUTION COOPERATIVES' INTERESTS BEFORE THE PUBLIC SERVICE COMMISSION IN PROCEEDINGS DESCRIBED IN THIS ARTICLE; TO REQUIRE GENERATION AND TRANSMISSION COOPERATIVES TO FILE AN ANNUAL FINANCIAL REPORT WITH THE PUBLIC SERVICE COMMISSION; TO AUTHORIZE THE PUBLIC SERVICE COMMISSION TO PROMULGATE RELATED RULES AND REGULATIONS; TO ADDRESS HOW THE ARTICLE MAY NOT BE CONSTRUED; AND TO REQUIRE SANTEE COOPER'S COOPERATION IN CERTAIN CIRCUMSTANCES.
H5525 creates the “South Carolina Electric Cooperative Consumer Protection and Wholesale Market Access Act,” a new regulatory framework for electric cooperatives in South Carolina. The bill is aimed at generation and transmission cooperatives, such as Central Electric Power Cooperative, and would place major decisions about large capital projects and major power purchase agreements under Public Service Commission (PSC) approval. It also requires wholesale rates, rate schedules, charges, and terms of service to be filed with and approved by the PSC before taking effect, with a comprehensive wholesale rate review at least every three years.
The bill gives distribution cooperatives a statutory right to petition the PSC for an “exit settlement” from existing wholesale power contracts, including contracts that otherwise do not contain exit provisions. In those proceedings, the PSC would determine the financial terms for modifying or terminating the contract, using an equitable, cost-based methodology and expressly prohibiting exit-cost calculations based on lost revenues or punitive charges. The bill also bars generation and transmission cooperatives from unilaterally extending contract terms or accelerating capital cost recovery without PSC approval, and it requires annual financial reporting, disclosure of executive compensation and capital spending, and PSC rulemaking to implement the new article.
If enacted, the bill would significantly expand state oversight of electric cooperative wholesale contracting and rate-setting by the Public Service Commission. It would add a new article to Title 58, Chapter 27 of the South Carolina Code, create new filing and approval requirements for major expenditures and power purchase agreements, authorize PSC enforcement of exit settlements, and direct the Office of Regulatory Staff to represent distribution cooperative ratepayers in these proceedings. The bill would apply prospectively to new wholesale contracts, contract extensions, major capital expenditures, and major power purchase agreements, while rate-filing provisions would apply after a 90-day delay.
The bill’s stated findings and structure reflect a strongly reform-oriented and consumer-protection sentiment. The text frames the measure as necessary to protect ratepayers, improve transparency, and address concerns about long-term wholesale contracts, alleged inflated exit-cost methodologies, and insufficient supply planning. No committee transcript or vote record is provided, so there is no recorded floor or committee debate to indicate broader legislative support or opposition beyond the bill’s own framing.
The main points of contention are likely to be the PSC’s expanded authority, the new right for distribution cooperatives to exit long-term wholesale contracts, and the bill’s rejection of lost-revenue-based exit fees. Generation and transmission cooperatives would likely object to the loss of contractual flexibility, the limits on unilateral extensions and capital recovery, and the disclosure and reporting burdens. By contrast, distribution cooperatives and their member-consumers are the apparent beneficiaries, while the bill also signals concern about Santee Cooper-related agreements, Rural Utilities Service oversight, and the economic consequences of current cooperative supply arrangements.