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H 5525

SC Electric Cooperative Consumer Protection & Wholesale Market Access Act

2025-2026 Regular Session Introduced by Lucas Atkinson and 5 co-sponsors

Establishes PSC oversight and a clear process for approving major wholesale expenditures and PPAs by G&TCoops, including exit settlements for distribution co-ops.

Referred to Committee on Labor, Commerce and Industry
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Bill Summary · H 5525

Summary of Bill H 5525 (Session 2025-2026) – South Carolina Electric Cooperative Consumer Protection & Wholesale Market Access Act

Note: This summary presents the substantive provisions and potential impact based on the bill text provided. It is not legal analysis.

Purpose and Intent

  • Create a new, comprehensive framework to oversee and regulate major wholesale power arrangements between Generation and Transmission Cooperatives (G&TCoops) andDistribution Cooperatives in South Carolina.
  • Enhance protection for ratepayers by ensuring prudence, transparency, and judicially enforceable processes for major capital expenditures, major power purchase agreements, and exit settlements from wholesale contracts.
  • Strengthen Public Service Commission (PSC) oversight; assign regulatory staff advocate roles; and require regular financial reporting by G&TCoops.
  • Address concerns about long-term wholesale contracts that lack exit provisions, potential inflations in exit costs, and governance concerns related to Santee Cooper (the Rural Utilities Service’s oversight context and historical issues).

Key Provisions and Changes

Governance and Oversight

  • Establishes Article 29 in Chapter 27, Title 58 of the South Carolina Code.
  • PSC oversight for major capital expenditures and major power purchase agreements by G&TCoops.
  • Office of Regulatory Staff (ORS) to represent distribution cooperative ratepayers before the PSC.

Definitions

  • Clarifies terms for purposes of the article:
    • Distribution Cooperative: Electric co-op purchasing wholesale power from a G&TCoop for resale to members.
    • Exit Settlement: Agreement or adjudicated action to modify/terminate a wholesale contract to allow a distribution coop to exit the G&T coop.
    • Generation and Transmission Cooperative (G&TCoop): Electric cooperative owning/operating generation and transmitting wholesale power.
    • Major Capital Expenditure: Any single expenditure or series of expenditures of $50 million or more for new generation resources or substantial modifications.
    • Major Power Purchase Agreement: PPA or related contracts for 50 MW or more.
    • Santee Cooper: South Carolina Public Service Authority (the state utility entity involved historically with costs).

Major Capital Expenditures and Major PPAs (Approval Process)

  • G&TCoops cannot undertake major capital expenditures or major PPAs without PSC approval.
  • Filing requirements:
    • For major capital expenditures: description, capacity, life, cost, cost-benefit analysis, impact on wholesale rates, and other rule-required information.
    • For major PPAs: demonstration that the contract is in the best interest of distribution cooperatives and comparison to market prices or alternatives.
  • PSC standards for approval:
    • Prudent, in the public interest, considering alternatives, rate impacts, reliability, and aggregate financial commitments.
  • Timeframe: PSC must decide on a complete application within 180 days.

Wholesale Rates and Service Terms

  • Wholesale rates, rate schedules, charges, and terms of service must be filed with the PSC at least 90 days before proposed effective date; no rate may take effect without PSC written approval.
  • PSC review criteria:
    • Just, reasonable, and in the public interest.
    • Consider costs, regional analogs/market prices, and imprudently incurred costs to be disallowed.
  • Interim rates possible with refund pending final PSC action.
  • Triennial wholesale rate review: PSC to conduct a comprehensive rate review at least every three years, requiring full financial data and cost studies.

Exit Settlements and Distribution Cooperative Rights

  • Exit rights: A distribution cooperative can petition the PSC for an exit settlement to modify/terminate its wholesale contract and leave the G&T coop.
  • Petition requirements include: current contract details, alternative power supply options, projected cost savings, proposed equitable exit costs, and methodology for allocating obligations.
  • PSC process:
    • Notice to all affected parties; opportunity for comments and hearings.
    • Independent consultants (costs borne by involved parties) to evaluate costs.
    • Final order within 365 days of a complete petition.
  • Standards for exit settlements:
    • Equitable, cost-based allocations reflecting legitimate, prudently incurred obligations.
    • Prohibition of inflated or punitive exit costs (no use of “lost revenues” as a punitive measure).
    • Independent review of proposed exit cost calculations.
    • Consideration of asset value, remaining life, and market value.
    • No penalties to co-ops exercising exit rights; or coercive terms.
  • Exit settlements approved by PSC are binding and enforceable; civil penalties for noncompliance; costs of enforcement recoverable.

Representation and Reporting

  • ORS represents ratepayer interests in proceedings under this article.
  • G&TCoops must file an annual comprehensive financial report by June 1, including:
    • Capital expenditures by project (past year and five-year outlook).
    • All power purchase agreements (term, product type, firmness, price). Contract prices deemed trade secrets are protected.
    • Executive compensation, per diem, admin costs, and overhead.
    • Wholesale rates versus regional utilities' rates.

Prohibitions and Coordination

  • G&TCoops are prohibited from:
    • Unilaterally extending contract terms or adding conditions effectively extending contracts beyond original terms.
    • Accelerating recovery of capital costs without PSC approval.
  • PSC can deny extensions not voluntarily agreed to if they unduly restrict exit rights.
  • Coordination with Santee Cooper (for exit-related adjustments) and disclosure of related terms in PSC proceedings.

Implementation and Effective Date

  • Effective upon gubernatorial approval.
  • Applies to new wholesale contracts, extensions, major capital expenditures, and major PPAs entered into on or after the effective date.
  • Rate filing provisions apply to filings made on or after 90 days post-effective date.

Potential Impacts

  • Supporters’ view: Improves price transparency, ratepayer protection, and regulatory oversight; provides a clear process for exit from long-term wholesale arrangements; reduces opportunities for inflated exit costs; strengthens PSC oversight and independent review.
  • Potential concerns: G&TCoops may face longer approval timelines for major investments; rate stability could be affected if interim rates are used; some sensitive financial data (e.g., contract prices) may be treated as trade secrets.

Who Is Affected

  • Distribution Cooperatives in South Carolina (ratepayers who purchase wholesale power).
  • Generation and Transmission Cooperatives (G&TCoops) that supply wholesale power to distribution co-ops.
  • South Carolina Public Service Commission (PSC) as the approving/regulatory body.
  • South Carolina Office of Regulatory Staff (ORS) as advocate for ratepayers.
  • Santee Cooper (SC Public Service Authority) for coordination and information sharing in exit-related proceedings.

Procedural Timeline Highlights

  • PSC decision on major expenditures or PPAs: within 180 days of complete filing.
  • Exit settlements: PSC decision within 365 days of a complete petition.
  • Rate reviews: comprehensive review at least every 3 years; expedited interim action possible with refunds.
  • Annual reporting: due by June 1 each year for G&TCoops.

End of summary.

Compiled from official sources — confirm details with the bill’s official record.

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