SC Electric Cooperative Consumer Protection & Wholesale Market Access Act

2025-2026 Bill 5525: SC Electric Cooperative Consumer Protection & Wholesale Market Access Act - South Carolina Legislature Online

South Carolina General Assembly
126th Session, 2025-2026
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H. 5525
STATUS INFORMATION
General Bill
Sponsors: Reps. C. Mitchell, Williams, Brewer, Atkinson, Luck and Hayes
Document Path: LC-0372HA26.docx
Introduced in the House on April 14, 2026
Currently residing in the House Committee on
Labor, Commerce and Industry
Summary: SC Electric Cooperative Consumer Protection & Wholesale Market Access Act
HISTORY OF LEGISLATIVE ACTIONS

Date

Body

Action Description with journal page number

4/14/2026

House

Introduced and read first time (
House Journal-page 17
)

4/14/2026

House

Referred to Committee on
Labor, Commerce and Industry
(
House Journal-page 17
)

View the latest
legislative information
at the website
VERSIONS OF THIS BILL
04/14/2026

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
.

W
hereas, the electric
distribution cooperatives in the State of South Carolina purchase electric
power and energy, transmission service, and certain related energy services
from Central Electric Power Cooperative, Inc. (Central), pursuant to wholesale
power contracts that extend through December 31, 2058; and

W
hereas, distribution cooperatives
are currently parties to wholesale power contracts that do not contain exit
provisions or exceptions to the distribution cooperative's all requirements
purchase obligation; and

W
hereas, the terms of
prior wholesale power contracts between the distribution cooperatives and
Central were extended in 2013 to December 31, 2030, and again extended to the
current term of December 31, 2058, to permit Central and the Public Service
Authority, also known as Santee Cooper, to recover the costs of the investment
in the construction of Units 2 and 3 at the V.C. Summer nuclear generating
station in Jenkinsville; and

W
hereas, under the
terms of loan agreements and other security agreements, the Rural Utilities
Service of the United States Department of Agriculture, a lender to Central,
has oversight and approval rights for reviewing the operations, compliance with
financial covenants, and the rates set by generation and transmission
cooperatives, but lacks sufficient staffing and resources to provide effective
oversight; and

W
hereas, Central has previously
provided exit cost calculations for distribution cooperatives pursuant to an
internally adopted policy that produced exit payments based on lost revenues
which were substantially inflated, including calculations based on lost
revenues that produced, in the aggregate, exit payments to Central that far
exceeded the book value of its assets and liabilities, and were not based upon
the distribution cooperative's existing obligations to the generation and
transmission cooperative
;
and

W
hereas, the Federal
Energy Regulatory Commission (FERC) has determined that the use of lost
revenues to calculate exit payments from distribution cooperatives is not in
the public interest and FERC's findings have been confirmed by a recent
appellate decision rendered by the Tenth Circuit Court of Appeals; and

W
hereas, Central's
utilization of the lost revenues methodology to calculate exit payments from distribution
cooperatives is not in the public interest; and

W
hereas, Central has
informed the distribution cooperatives that it does not have sufficient
electric capacity and energy to meet its obligations under the wholesale power contracts
and will not have

sufficient firm electric capacity and energy to meet
the projected requirements of its distribution cooperatives until 2031; and

W
hereas, Central's
inability to satisfy its supply obligations to the distribution cooperatives is
having, and will continue to have, a significant negative impact on the
economic development of the State of South Carolina; and

W
hereas, the South
Carolina Public Service Commission has the institutional expertise, authority,
and resources to provide effective regulatory oversight which serves the public
interest; and

W
hereas, the General
Assembly finds that Central's current governance structure, based upon one
member, one vote, is contrary to the public interest of the State of South
Carolina; and

W
hereas, the General
Assembly further finds that wholesale power delivery through long term
wholesale power contracts that do not contain exit provisions or exceptions to
the all requirements purchase obligation are contrary to the public interest of
the State of South Carolina. Now, therefore,

B
e it enacted by the
General Assembly of the State of South Carolina:

S
ECTION 1.
This act may be cited as the "South Carolina Electric Cooperative
Consumer Protection and Wholesale Market Access Act."

S
ECTION 2. The
General Assembly hereby finds and declares that electric distribution
cooperatives in South Carolina have an obligation to serve their member-consumers
at the lowest reasonable cost consistent with reliable service.

S
ECTION 3.
C
hapter 27, Title 58 of the S.C. Code is amended by
adding:

A
rticle 29

S
outh Carolina Electric Cooperative Consumer Protection
and Wholesale Market Access

S
ection
58-27-2900
.
T
he purposes of this article are to:

(
1) establish
a fair, transparent, and judicially enforceable process by which the commission
may oversee a distribution cooperative's modification or exit from a wholesale
power contract with a generation and transmission cooperative and ensure that
any resulting payment does not include lost revenues by the generation and
transmission cooperative; and

(
2) protect
South Carolina ratepayers from excessive, imprudent, unjustified, or
anticompetitive wholesale power costs incurred by generation and transmission cooperatives.

S
ection
58-27-2910
.
A
s used in this article:

(
1)
"Distribution cooperative" means an electric cooperative organized pursuant to Chapter
47, Title 33 that purchases wholesale power from a generation and transmission
cooperative for resale to its member-consumers.

(
2)
"Exit settlement" means either an agreement negotiated by a generation and
transmission cooperative and a distribution cooperative or an adjudicated
action pursuant to this article which establishes, at a minimum, the financial
terms, conditions, and obligations under which a wholesale power contract is materially
modified, amended, or terminated to enable the distribution cooperative to
terminate its membership in the generation and transmission cooperative.

(
3)
"Generation and transmission cooperative" means an electric cooperative
organized pursuant to Chapter 49, Title 33 that owns or leases electric
generation resources, purchases and resells electric power and energy, and
transmits wholesale electric power and energy to distribution cooperatives.

(
4)
"Major capital expenditure" means a single expenditure or series of related
expenditures by a generation and transmission cooperative for:

(
a)
the ownership, acquisition, construction, or long-term lease of an electric
generation resource in an aggregate amount of fifty million dollars or more; or

(
b)
additions, improvements, repairs, or modifications to any generation resource
leased or owned by a generation and transmission cooperative in the aggregate
amount of fifty million dollars or more.

(
5)
"Major power purchase agreement" means a valid and binding contract or
agreement, or series of related contracts or agreements, for the purchase or
procurement of electric power and energy by a generation and transmission cooperative
involving electric capacity of fifty megawatts or more.

(
6)
"Wholesale power contract" means a binding and valid contract between a generation
and transmission cooperative and a distribution cooperative for the provision
of wholesale electric power and energy, transmission services and other related
services, including any all requirements power supply agreement.

(
7)
"Santee Cooper" means the South Carolina Public Service Authority.

S
ection
58-27-2920
.
(
A) No generation and
transmission cooperative operating in this State shall undertake, commit to, or
execute any contract or agreement that constitutes a major capital expenditure
without first obtaining approval from the commission. The generation and
transmission cooperative shall file an application for a proposed major capital
expenditure with the commission. This application must include:

(
1)
a full description of the proposed generation resource or modifications,
additions, or improvements to an existing generation resource, including
capacity, fuel type, expected useful life, and projected cost;

(
2)
a detailed cost-benefit analysis demonstrating the necessity and economic
prudence of the expenditures as compared to other alternatives;

(
3)
the anticipated impact on wholesale rates charged to each distribution cooperative
over the useful life of the new generation resource or the modifications,
additions, or improvements to an existing generation resource; and

(
4)
such additional information as the commission may by rule require.

(
B)
No generation and transmission cooperative shall commit to or execute any major
power purchase agreement without prior approval by the commission. The generation
and transmission cooperative shall file an application with the commission demonstrating
that the proposed agreement is in the best interest of its distribution
cooperatives and their member-consumers, including a comparison of the proposed
contract terms to prevailing wholesale market prices or other alternatives.

(
C)
The commission shall approve a major capital expenditure or a major power purchase
agreement upon a finding that the proposed major capital expenditure or major
power purchase agreement is prudent and in the public interest. In making this
determination, the commission shall consider:

(
1)
the cost of available alternatives, including wholesale market alternatives;

(
2)
the projected impact on rates charged to distribution cooperatives over the
useful life of the major capital expenditure, or the length of the contract term
of the major power purchase agreement;

(
3)
the reliability and adequacy of the generation and transmission cooperative's
power supply resources over the useful life of the major capital expenditure or
major power purchase agreement; and

(
4)
the projected aggregate effect of existing and proposed financial commitments,
including debt incurred by the generation and transmission cooperative, on
rates charged to distribution cooperatives.

(
D) The
commission shall either approve or deny an application within one hundred
eighty days of the filing of a complete application.

S
ection
58-27-2930
.
(
A) All wholesale
rates, rate schedules, charges, and terms of service proposed by a generation
and transmission cooperative for electric service to its distribution
cooperatives shall be filed with the commission no less than ninety days before
the proposed effective date. No such rate shall take effect without prior
written approval of the commission.

(
B)
The commission shall approve a proposed wholesale rate upon a finding that the
rate is just, reasonable, and in the public interest. In evaluating a proposed
wholesale rate, the commission shall:

(
1)
review the actual and projected costs of power supply, capital investment,
operations, and administration of the generation and transmission cooperative;

(
2)
compare the proposed rate to prevailing rates charged by other utilities in the
region and wholesale market rates for comparable power supply services; and

(
3)
identify and disallow any cost that is the result of imprudent management,
unnecessary expenditure, or an expenditure not in the best interest of the
distribution cooperatives.

(
C)
The commission may, in its discretion, permit a proposed wholesale rate to take
effect on an interim basis, subject to refund, pending final commission action.

(
D) The
commission shall conduct a comprehensive review of the generation and
transmission cooperative's wholesale rates at least once every three years,
regardless of whether a new rate filing has been submitted. The generation and
transmission cooperative shall provide all financial records, cost studies, and
other information requested by the commission in connection with such review.

S
ection
58-27-2940
.
(
A) Any distribution
cooperative that is party to a wholesale power contract with a generation and
transmission cooperative shall have the right to petition the commission for an
adjudicated determination of an exit settlement. Such an exit settlement may
materially modify or terminate an existing wholesale power contract between a
generation and transmission cooperative and a distribution cooperative to
permit the distribution cooperative to terminate its membership with the
generation and transmission cooperative. This right shall exist notwithstanding
any provision of the wholesale power contract to the contrary.

(
B) A
distribution cooperative seeking an exit settlement shall file a petition with
the commission that includes:

(
1)
a description of the current wholesale power contract, including its service
obligation; length of the contract term, including any prior extensions or
proposed extensions; rates; pricing; and reliability provisions;

(
2)
a description of the power supply alternatives available to the petitioning distribution
cooperative including, but not limited to, proposed power purchase agreements,
other power supply arrangements, or generation resources;

(
3)
a calculation of the projected cost savings to the distribution cooperative resulting
from the proposed exit settlement;

(
4)
a proposed exit settlement including, but not limited to, a methodology for
calculating the petitioning distribution cooperative's equitable share of the
generation and transmission cooperative's outstanding contractual obligations,
stranded costs, debt retirement, and patronage capital; and

(
5)
such other information as the commission may by rule require.

(
C) Upon
receipt of a complete petition, the commission shall:

(
1)
provide notice to all affected parties, including the generation and
transmission cooperative and all other member distribution cooperatives, and provide
these parties the opportunity to submit written comments and to participate in
an evidentiary hearing;

(
2)
retain independent legal, economic, and engineering consultants to evaluate the
proposed exit settlement and the accuracy of any costs asserted by the
generation and transmission cooperative, the expenses of which must be paid by
the generation and transmission cooperative and the petitioning distribution
cooperative in an amount as ordered by the commission; and

(
3)
issue a final order within three hundred sixty-five days of receiving a
complete petition that either establishes the terms and conditions of an exit settlement
or denies the petition with written findings.

(
D)
In establishing an exit settlement, the commission shall apply the following
standards:

(
1)
the petitioning distribution cooperative's share of the generation and
transmission cooperative's obligations shall be calculated on an equitable,
cost-based methodology that reflects only legitimate, prudently incurred
obligations attributable to serving the petitioning distribution cooperative's electric
load;

(
2)
no exit cost shall include inflated, speculative, or punitive elements or
methodology including, but not limited to, lost revenues, and any proposed exit
costs not based on actual or projected costs of the generation and transmission
cooperative must be disallowed;

(
3)
any exit cost calculation published or proposed by the generation and
transmission cooperative shall be subject to independent review;

(
4)
consideration of the capacity value, market value, and remaining useful life of
generation assets in the determination of any stranded cost obligation whether
such obligation results in a payment by the distribution cooperative to the generation
and transmission cooperative or a payment by the generation and transmission cooperative
to the distribution cooperative; and

(
5)
the prohibition of any penalty, punitive surcharge, accelerated debt recovery
mechanism, or other condition designed to coerce a distribution cooperative
into foregoing or abandoning its right pursuant to this section.

(
E) A
generation and transmission cooperative shall not, directly or indirectly,
impose, accelerate, or threaten to impose any financial obligation, debt or
capital recovery mechanism, or rate surcharge on a distribution cooperative as
a result of the distribution cooperative exercising its rights pursuant to this
section. Any of these actions shall constitute an unfair trade practice subject
to commission enforcement under applicable law.

(
F)
Nothing in this section shall preclude a distribution cooperative and a generation
and transmission cooperative from reaching a mutually agreed upon exit settlement
at any time. Such an exit settlement shall be submitted to the commission for its
review and approval to ensure adherence to the standards established in subsection
(D).

(
G)
An exit settlement approved by the commission pursuant to this section shall be
binding upon all parties and shall be enforceable in any court of competent
jurisdiction in the State of South Carolina. The commission may assess civil
penalties against any party that fails to comply with an approved exit settlement
and the party failing to comply with such exit settlement shall be liable for
all reasonable costs incurred by the enforcing party.

S
ection
58-27-2950
. The South Carolina Office of Regulatory Staff shall represent the
interests of distribution cooperative ratepayers in all commission proceedings described
in this article.

S
ection
58-27-2960
.
(
A) A generation and
transmission cooperative shall not unilaterally:

(
1)
extend the length or impose any condition that has the practical effect of the
contract term of extending any wholesale power contract with a distribution
cooperative beyond its original term;

(
2)
propose to accelerate the recovery of capital costs without the commission's
prior written approval.

(
B)
The commission shall deny any extension that is not voluntarily agreed to by
the distribution cooperative and that would unreasonably restrict the
distribution cooperative's ability to exercise its rights under this article.

S
ection
58-27-2970
.
A
generation and transmission
cooperative shall file an annual comprehensive financial report with the
commission no later than June 1. This report must disclose:

(
1)
all capital expenditures made in the prior fiscal year and all projected
capital expenditures for the subsequent five fiscal years, itemized by project;

(
2)
all power purchase agreements entered into including, but not limited to, the
length of the contract term, type of product, firmness of supply, and the
contract price. Any contract price provided in the generation and transmission
cooperative's comprehensive financial report shall be a trade secret and shall
be protected from disclosure by the commission;

(
3)
executive compensation, board of trustees per diem payments, administrative
costs, and overhead allocations; and

(
4)
wholesale rates charged to distribution cooperatives compared to regional
utilities' rates for similar electric power services.

S
ection
58-27-2980
.
T
he commission is authorized to
promulgate such rules and regulations as are necessary to implement and
administer the provisions of this article, including rules and regulations
governing:

(
1)
the content and format of applications for approval of major capital
expenditures and major power purchase agreements;

(
2)
procedures for wholesale rate filings and commission review;

(
3)
procedures for adjudicated exit settlements, including discovery, evidentiary
hearings, and expert witness designation;

(
4)
methodologies for calculating equitable cost allocations with respect to an
exit settlement whether such cost allocations result in a payment by the
distribution cooperative to the generation and transmission cooperative or a
payment from the generation and transmission cooperative to the distribution
cooperative; and

(
5)
annual financial reporting requirements for generation and transmission
cooperatives.

T
he commission shall
initiate its rules and promulgation of regulations pursuant to this section no
later than ninety days after the effective date of this article.

S
ection
58-27-2990
.
N
othing in this article shall be
construed to:

(
1)
impair the obligation of any existing bond, note, or loan covenant of a
generation and transmission cooperative entered into prior to the effective
date of this article, except to the extent necessary to give full effect to an
exit settlement approved by the commission;

(
2)
require the renegotiation of any wholesale power contract in effect as of the
effective date of this article, except as may be ordered by the commission in
an exit settlement; or

(
3)
preclude the Rural Utilities Service of the United States Department of
Agriculture from exercising any authority it possesses pursuant to federal law
or any loan or security agreement.

S
ection
58-27-3000
. To the extent that any exit settlement requires the modification
of existing power supply or transmission agreements between the generation and
transmission cooperative and Santee Cooper, the commission shall coordinate
with Santee Cooper and may request that Santee Cooper provide such information
as is necessary for the commission to perform its duties pursuant to this
article. The commission shall have authority to require that the terms of any
agreement between Santee Cooper and a generation and transmission cooperative
that are incorporated into or otherwise affect wholesale rates charged to
distribution cooperatives be disclosed and made part of the record in any
commission proceeding pursuant to this article.

S
ECTION 4. If any section, subsection,
paragraph, subparagraph, sentence, clause, phrase, or word of this act is for
any reason held to be unconstitutional or invalid, such holding shall not
affect the constitutionality or validity of the remaining portions of this act,
the General Assembly hereby declaring that it would have passed this act, and
each and every section, subsection, paragraph, subparagraph, sentence, clause,
phrase, and word thereof, irrespective of the fact that any one or more other
sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases,
or words hereof may be declared to be unconstitutional, invalid, or otherwise
ineffective.

S
ECTION 5. This act takes effect upon approval
by the Governor and shall apply to all new wholesale power contracts, contract
extensions, major capital expenditures, and major power purchase agreements occurring
on or after the effective date of this act. However, the provisions of this act
governing rate filings shall apply to rate filings made on or after ninety days
after the effective date.

----XX----

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