South Carolina Code 58-33-280. Requests for approval of revised rates
(B) A utility must be allowed to recover through revised rates its weighted average cost of capital applied to all or, at the utility’s option, part of the outstanding balance of construction work in progress, calculated as of a date specified in the filing. Any construction work in progress not included in any specific filing for revised rates shall continue to earn AFUDC and may be included in rates through future filings. The revised rates filing shall include the most recent monitoring report filed under § 58-33-277(A) updated to reflect information current as of the date specified in the filing.
Terms Used In South Carolina Code 58-33-280
- AFUDC: means the allowance for funds used during construction of a plant calculated according to regulatory accounting principles. See South Carolina Code 58-33-220
- Amortization: Paying off a loan by regular installments.
- application: means an application for a base load review order under the terms of this article. See South Carolina Code 58-33-220
- Base load review order: means an order issued by the commission pursuant to § 58-33-270 establishing that if a plant is constructed in accordance with an approved construction schedule, approved capital costs estimates, and approved projections of in-service expenses, as defined herein, the plant is considered to be used and useful for utility purposes such that its capital costs are prudent utility costs and are properly included in rates. See South Carolina Code 58-33-220
- Combined application: means a base load review application which is combined with an application for a certificate under the Utility Facility Siting and Environmental Protection Act, or which involves a plant located outside of the State of South Carolina, and at the utility's option may be combined with an application for new electric rates under § 58-27-860. See South Carolina Code 58-33-220
- commission: means Public Service Commission. See South Carolina Code 58-33-20
- Construction work in progress: means capital costs as defined above associated with a base load plant which have been incurred but have not been included in the utility's plant-in-service. See South Carolina Code 58-33-220
- cost of capital: means the utility's average cost of debt and equity capital:
(a) incorporating the return on equity;
(b) incorporating the utility's current weighted average cost of debt;
(c) weighting (a) and (b) according to the utility's capital structure for ratemaking purposes, as established in the order in the utility's last general rate proceeding, updated to reflect the utility's current levels of debt and equity capital; and
(d) adjusting the result for the effect of income taxes. See South Carolina Code 58-33-220 - Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- In-service expenses: means reasonably projected expenses recognized under generally accepted principles of regulatory and financial accounting as a result of a plant commencing commercial operation, including:
(a) expenses associated with operating and maintaining a plant, as well as taxes and governmental charges applicable to the plant including taxes other than income taxes;
(b) depreciation and amortization expenses related to the plant;
(c) revenue requirements related to the utility's cost of capital applied to the investment in supplies, inventories, and working capital associated with the plant; and
(d) other costs determined by the commission to be appropriate for ratemaking purposes. See South Carolina Code 58-33-220 - plant: means a new coal or nuclear fueled electrical generating unit or units or facility that is designed to be operated at a capacity factor exceeding seventy percent annually, has a gross initial generation capacity of three hundred fifty megawatts or more, and is intended in whole or in part to serve retail customers of a utility in South Carolina, and for a coal plant, includes Best Available Control Technology, as defined by the United States Environmental Protection Agency, for the control of air emissions. See South Carolina Code 58-33-220
- Proceeding: means the proceeding to consider an application filed under this chapter. See South Carolina Code 58-33-220
- regulatory staff: means the executive director or the executive director and the employees of the Office of Regulatory Staff. See South Carolina Code 58-33-20
- Revised rates: means a revised schedule of electric rates and charges reflecting a change to the utility's then current nonfuel rates and charges to add incremental revenue requirements related to a base load plant as authorized in this article. See South Carolina Code 58-33-220
- Revised rates order: means an order issued by the commission approving, modifying, or denying the utility's request to charge revised rates under this article, which revised rates order an aggrieved party may contest in an adversarial hearing before the commission. See South Carolina Code 58-33-220
- Statute: A law passed by a legislature.
- Utility: means a person owning or operating equipment or facilities for generating, transmitting, or delivering electricity to South Carolina retail customers for compensation but it shall not include electric cooperatives, municipalities, the South Carolina Public Service Authority, or a person furnishing electricity only to himself, itself, its residents, employees, or tenants when the electricity is not resold or used by others. See South Carolina Code 58-33-220
- Utility Facility Siting and Environmental Protection Act: means § 58-33-10 and other applicable provisions of this chapter. See South Carolina Code 58-33-220
(C) Written comments to the commission and the Office of Regulatory Staff concerning the revised rates and the information supporting them shall be allowed within one month of the revised rates filing.
(D) The Office of Regulatory Staff shall review and audit the revised rates and the information supporting them to determine their compliance with the terms of this article. No later than two months after the date of the revised rates filing, the Office of Regulatory Staff shall serve on the commission and all intervenors and parties of record a report indicating the results of its review and audit and proposing any changes to the revised rates or the information supporting them that the Office of Regulatory Staff determines to be necessary to comply with the terms of this article.
(E) Written comments related to the report may be filed with the commission within one month from the date of the filing of the report. Comments must be served on the Office of Regulatory Staff and simultaneously mailed or electronically transmitted to the utility and to all intervenors and parties of record who previously appeared and filed comments. The Office of Regulatory Staff may revise its report considering comments filed.
(F) No later than four months after the date of the revised rates filing, the commission shall issue a revised rates order granting, modifying, or denying revised rates as filed by the utility. In the absence of such a revised rates order, the revised rates shall be considered to be approved as filed. If the commission fails to issue an order within the period prescribed in this section, a party may move that the commission issue an order granting or denying the application. If the commission fails to issue an order within ten days after the motion is served, the application will be considered granted.
(G) Where both Office of Regulatory Staff and the utility agree in writing on the revised rates to be implemented, the commission may give weight to the agreement in issuing its revised rates order but may consider additional factors at its discretion.
(H) If the utility is granted a rate increase in the revised rates order, the utility shall provide notice to its customers with the next billing. The utility may implement revised rates for bills rendered on or after a date selected by the utility, which may not be sooner than thirty days after revised rates are approved.
(I) Upon implementation of revised rates under this article, the utility will cease to accrue AFUDC on that component of its construction work in progress on which it is recovering its weighted average cost of capital through revised rates.
(J) Other provisions of this article notwithstanding:
(1) The utility may file a final set of revised rates for a plant to go into effect upon commercial operation of the plant, the filing to be made no sooner than seven months before the projected date that the plant is to commence commercial operations. In the final revised rates the utility may include recovery of the weighted average cost of capital applied to all or part of the capital costs associated with the plant. In all cases, the decision to seek recovery in revised rates of less than the full amount of its cost must be at the utility’s sole discretion. Rate adjustments to reflect the revenue requirements related to in-service expenses must be included in the final revised rates and shall be based on the utility’s most current budget estimates of those expenses for the succeeding twelve-month period at the time the final revised rates are filed or actual expenses, if available.
(2) If the commission rejects a revised rate filing on grounds that may be corrected in a subsequent filing, or if the utility withdraws a revised rate filing before a revised rates order is issued, the utility may file a subsequent request for revised rates at any time thereafter.
(3) The utility may seek to recover any capital costs, in-service expenses, or other costs not included in revised rates through future general rate proceedings.
(4) Revised rates shall not be allowed, under § 58-33-270(C) or under § 58-33-280, for coal plants located in South Carolina that were certificated for construction under the Utility Facility Siting and Environmental Protection Act before December 31, 2007, or for coal plants located outside of South Carolina if certificated under a state statute analogous to the Utility Facility Siting and Environmental Protection Act before December 31, 2007.
(K) Where a plant is abandoned after a base load review order approving rate recovery has been issued, the capital costs and AFUDC related to the plant shall nonetheless be recoverable under this article provided that the utility shall bear the burden of proving by a preponderance of the evidence that the decision to abandon construction of the plant was prudent. Without limiting the effect of § 58-33-275(A), recovery of capital costs and the utility’s cost of capital associated with them may be disallowed only to the extent that the failure by the utility to anticipate or avoid the allegedly imprudent costs, or to minimize the magnitude of the costs, was imprudent considering the information available at the time that the utility could have acted to avoid or minimize the costs. The commission shall order the amortization and recovery through rates of the investment in the abandoned plant as part of an order adjusting rates under this article.
(L) After completion of a plant that is subject to a base load review order, the Office of Regulatory Staff shall conduct an audit of the utility revenues, expenses, and rates consistent with the audits conducted of filings for new electric rates under § 58-27-860. The audit must be based on a twelve-month test period ending no later than December thirty-first of the calendar year following the year in which the plant entered commercial operation and must be filed with all parties to the base load review proceeding within four months of the conclusion of the test period.