South Carolina Code 58-33-225. Project development applications; prudency determinations; disallowance of imprudent costs; deferral of costs of abandoned project
(B) At any time before the filing of an application or a combined application under this act related to a specific plant, a utility may file a project development application with the commission and the office of regulatory staff.
Terms Used In South Carolina Code 58-33-225
- 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
- application: means an application for a base load review order under the terms of this article. See South Carolina Code 58-33-220
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- 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
- 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 - Docket: A log containing brief entries of court proceedings.
- 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.
- General rate proceeding: means a proceeding under § 58-27-810 and other applicable provisions for the establishment of new electric rates and charges, and where orders in general rate proceedings are referenced in this article, these orders include rate orders issued in proceedings or combined proceedings under this article. See South Carolina Code 58-33-220
- imprudence: includes , but is not limited to, lack of caution, care, or diligence as determined by the commission in regard to any action or decision taken by the utility or one acting on its behalf including, but not limited to, its officers, board, agents, employees, contractors, subcontractors, consultants affecting the project, or any other person acting on behalf of or for the utility affecting the project. 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
- Preconstruction costs: means all costs associated with a potential nuclear plant incurred before issuance of a final certificate under the Utility Facility Siting and Environmental Protection Act, including, without limitation, the costs of evaluation, design, engineering, environmental and geotechnical analysis and permitting, contracting, other required permitting including early site permitting and combined operating license permitting, and initial site preparation costs and related consulting and professional costs, and shall include AFUDC associated with those costs. 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
- Project development application: means an application for a project development order. See South Carolina Code 58-33-220
- Project development order: means an order establishing the prudence of a utility's decision to incur preconstruction costs associated with a nuclear plant or potential nuclear plant. See South Carolina Code 58-33-220
- prudency: means a high standard of caution, care, and diligence in regard to any action or decision taken by the utility or one acting on its behalf including, but not limited to, its officers, board, agents, employees, contractors, subcontractors, consultants affecting the project, or any other person acting on behalf of or for the utility affecting the project. 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
- Testimony: Evidence presented orally by witnesses during trials or before grand juries.
- 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
(C) In a project development application, the utility shall:
(1) describe the plant being considered and shall designate:
(a) the anticipated generation capacity (or range of capacity) of the plant; and
(b) the projected annual capacity factors or range of factors of the plant;
(2) provide information establishing the need for the generation capacity represented by the potential plant and the need for generation assets with the indicative annual capacity factors of the potential plant;
(3) provide information establishing the reasonableness and prudence of the potential fuel sources and potential generation types that the utility is considering for the plant; and
(4) provide such other information as may be required to establish that the decision to incur preconstruction costs related to the potential nuclear plant is prudent considering the information known to the utility at the time and considering the other alternatives available to the utility for supplying its generation needs.
(D) The commission shall issue a project development order affirming the prudency of the utility’s decision to incur preconstruction costs for the nuclear plant specified in the application if the utility demonstrates by a preponderance of evidence that the decision to incur preconstruction costs for the plant is prudent. In issuing its project development order, the commission may not rule on the prudency or recoverability of specific items of cost, but shall rule instead on the prudency of the decision to incur preconstruction costs for the nuclear plant described in § 58-33-225(C)(1).
(E) Unless the record in a subsequent proceeding shows that individual items of cost were imprudently incurred, or that other decisions subsequent to the issuance of a project development order were imprudently made considering the information available to the utility at the time they were made, then all the preconstruction costs incurred for the potential nuclear plant must be properly included in the utility’s plant-in-service and must be recoverable fully through rates in future proceedings under this chapter.
(F) To the extent that a party in a general rate proceeding or revised rates proceeding establishes the imprudence of specific items of cost or of specific decisions made subsequent to the issuance of a project development order as set forth in § 58-33-225(E), then the commission may disallow the resulting costs but only to the extent that a prudent utility would have avoided those costs considering the information available to the utility at the time when they were incurred or the decisions at issue were made.
(G) If the utility decides to abandon the project after issuance of a prudency determination under this section, then the preconstruction costs related to that project may be deferred, with AFUDC being calculated on the balance, and may be included in rates in the utility’s next general rate proceeding or revised rates proceeding, provided that as to the decision to abandon the plant, the utility shall bear the burden of proving by a preponderance of the evidence that the decision was prudent. Without in any way limiting the effect of § 58-33-225(D), 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. Pending an order in the general rate proceeding or revised rates proceeding, the utility, at its discretion, may commence to amortize to cost of service the balance of the preconstruction costs related to the abandoned project over a period equal to the period during which the costs were incurred, or five years, whichever is greater.
(H) Prudency determinations under § 58-33-225(D) may not be challenged or reopened in any subsequent proceeding including proceedings under § 58-27-810 and other applicable provisions and § 58-33-220 and other applicable provisions of this article.
(I) At any time after an initial project development order has been issued, a utility may file an amended project development application seeking a determination of the prudency of the utility’s decision to continue to incur preconstruction costs considering changed circumstances or changes in the type or location of nuclear plant that the utility is pursuing or considering other characteristics or decisions related to the plant. The amended project development application must be considered in a separate docket; however, the testimony and other evidence of the prior docket must be considered to be part of the new docket.
(J) Pursuant to § 58-33-240, the commission shall enter an order granting or denying a project development order or amended project development order within six months of the filing of the application. 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.