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Senate Amendment 8
H 3309 - Session 126 (2025-2026)
Electrical Utilities
Senator Davis proposes the following amendment (LC-3309.HA0055S):
Amend the bill, as and if amended, by adding an appropriately numbered SECTION to read:
SECTION X.Section 58-27-865 of the S.C. Code is amended by adding:
(H)(1) The General Assembly finds it is in the public interest to establish a fuel cost sharing and electricity production cost efficiency mechanism in order to better align electrical utility and ratepayer interests in the management of fuel and efficient production of electricity.
(2) For purposes of this subsection:
(a) "total annual fuel cost" means the actual expenditures incurred by an electrical utility in the previous twelve months on fuel costs as defined and determined pursuant to subsection (A).
(b) "total baseline total annual fuel cost" means the total annual fuel cost for the twelve months immediately prior to the period that is the subject of the total annual fuel cost determination.
(c) "fuel sharing incentive" means an incentive mechanism that shares the economic risk associated with fuel costs between the electrical utility and its ratepayers.
(3)(a) For any fuel cost recovery adjustment approved on or after January 1, 2026, an electrical utility shall include in its initial filing, a proposed fuel sharing incentive within the rate adjustment filings used for the recovery of fuel costs for electricity production. The commission shall review the proposed fuel sharing incentive and shall approve a fuel sharing incentive that aligns the economic interests of electrical utilities and ratepayers by sharing the risk of high fuel costs and fuel cost volatility.
(b) The fuel sharing incentive amount shall be calculated as ten percent (10%) percent of the difference between the total annual fuel costs and the baseline total annual fuel costs. The fuel sharing incentive, positive or negative, shall be subtracted from the annual total annual fuel cost to be recovered annually from ratepayers. The amount of cumulative annual fuel sharing incentive recovered within a single year shall be capped at an amount equal to a 100 basis point pretax return on the electrical utility's rate base as established by the commission in the electrical utility's most recent base rate proceeding.
(i) The dollar value beyond the annual cap in subparagraph (3)(b) shall be accounted for in the deferred balance of the rate adjustment mechanism used for the recovery of purchased fuel costs.
(ii) For the purpose of calculating the fuel sharing incentive, the total baseline total annual fuel cost may, upon a showing of reasonableness by the electrical utility or any other party, be adjusted upward or downward, proportionately, to account for increases or decreases in annual retail kilowatt hour sales.
(c) The calculation of the symmetric sharing amount shall be provided in work papers in executable format with all cell formulas intact.
(d) The commission may examine the implementation of the fuel sharing incentive in any prudence review process for the rate adjustment mechanism used for the recovery of purchased fuel costs.
(4) The electrical utility's filing for the rate adjustment mechanism used for the recovery of purchased fuel costs shall provide the quantities of, and actual invoice costs of, specific fuel commodity supplies, segregated by electric production facility, that the electrical utility purchased in order to generate electricity for each month of the calendar year subject to the prudence review. Each electrical utility shall describe and explain the following:
(a) the volumes and costs associated with fixed-price, long-term supply contracts;
(b) the volumes and costs associated with storage injections and withdrawals, including both physical and contract storage; and
(c) the volumes and costs associated with associated with financial hedging.
(5) The electrical utility's filing for the rate adjustment mechanism used for the recovery of fuel costs shall also provide for relevant twelve-month period for which actual costs are under review:
(a) the benchmark total annual fuel costs and actual total annual fuel costs;
(b) the annual fuel sharing incentive amounts; and
(c) the calculation of cap on the annual cumulative fuel sharing incentive amount.
Renumber sections to conform.
Amend title to conform.