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Committee backs electric rate-stabilization proposal to smooth utility rate swings, with ORS oversight
Summary
Senators advanced S.446, an electric rate-stabilization act modeled after the state’s gas program that would allow utilities to adjust rates more frequently to reflect investment and revenue changes, while requiring prudency reviews for very large new generating facilities.
The Senate Judiciary Committee advanced S.446, the Electric Rate Stabilization Act (ERSA), which would permit electric utilities to request periodic rate adjustments to reflect changes in investment, revenues and expenses rather than waiting for multi-year rate cases.
Breeden, committee staff, told members the proposal closely follows South Carolina’s natural-gas rate-stabilization framework with added customer protections. Under the bill as explained to the committee, utilities would file surveillance reports each quarter showing changes in expenses, revenue and rate-base investments. If a utility’s return on equity varied by 0.5 percentage points above or below the baseline set in the most recent general-rate order, the utility or the commission could seek a rate adjustment. ORS and other parties could participate; the subcommittee amendment clarifies that parties may conduct discovery and participate in the proceedings.
Breeden said ERSA would add protections not present in the gas statute: any new electric generating facility larger than 250 megawatts would undergo a full prudency review once completed, utilities would file a full rate case at least once every five years to reestablish baselines, and the Office of Regulatory Staff (ORS) would be authorized additional auditor positions paid for by participating utilities. The staff presentation emphasized safeguards designed to protect consumers — for example, final orders would remain subject to party petitions and evidentiary hearings.
Tiger Wells of Duke Energy and other utility witnesses told the committee that more frequent, smaller adjustments reduce rate shock and allow for timelier recovery of prudently incurred costs while preserving ORS oversight and the right of parties to challenge filings. Committee members discussed workload and staffing for ORS; witnesses and staff said the bill permits ORS to add auditors for participating utilities and to seek additional resources if needed.
The committee adopted the subcommittee amendment clarifying participation and discovery, and it reported the bill favorably to the floor. No roll-call tally was recorded on the transcript; actions on the measure were taken by voice vote.
