(A) An electrical utility may propose programs and customer incentives to encourage or promote demand-side management programs whereby a customer uses a customer-sited distributed energy resource, as defined in Section 58-39-120(C), or combination of such resources, to: (1) reduce the customer's electric consumption or demand from the electric grid, or (2) beneficially shape the customer's electric consumption or demand in a manner that reduces the customer's contribution to the electrical utility's system or local coincidental peak demand, subject to the associated load to utility management for reliability or economic purposes, or reduce future electrical utility system costs to serve its customers. Programs authorized pursuant to this section may also include distributed energy resources that draw additional power from the electric grid including, but not limited to, electric heat pumps with programmable or utility controlled thermostats, electric heat pump water heaters controlled through utility programs, smart home panels, advanced inverters, and energy storage devices located on the customer's side of the meter, provided that any programs or customer incentives otherwise meet the requirements of this section. These programs may also include a combination of resources, including renewable energy microgrids, to provide economic benefits to the utility system or to help address specific transmission or distribution issues that would otherwise require significant capital investment. (B) In evaluating a program or customer incentive proposed pursuant to this section to assure reasonableness, promotion of the public interest, and consistency with the objectives of Sections 58-27-845 and 58-37-20, the commission must apply the procedure approved pursuant to Section 58-37-20. An electrical utility must use standard utility practices for determining the percentage of customers that would or would not have adopted a distributed energy resource without any incentive allowed under this section to install and utilize the distributed energy resource as part of the associated demand-side management program. The electrical utility must designate the expected useful life of the distributed energy resource and evaluate the costs and benefits of demand-side measures over their useful lives in the program application based on industry-accepted standards. All initial program costs, benefits, and participation assumptions used in the electrical utility's cost-effectiveness evaluations must be reviewed by the commission to assure the electrical utility has presented a reasonable basis for its calculation. Electrical utilities must update the cost-effectiveness analysis based on the actual program costs, benefits, and participation as soon as practicably possible based on standard evaluation, measurement, and verification protocols, and the electrical utility's cost recovery must be reconciled accordingly. (C) For demand-side programs or customer incentives proposed in this section, the electrical utility may recover costs through the procedures in Section 58-37-20. The prohibition in Section 58-40-20(I) against recovery of lost revenues associated with distributed energy resources pursuant to Chapter 39, Title 58 is inapplicable to recovery of net lost revenues associated with a distributed energy resource that is installed as a result of a demand-side program incentive pursuant to this section or Section 58-37-20. (D) The commission may approve any program filed pursuant to this section if the commission finds the program to be cost effective pursuant to Section 58-37-10(3). For any demand-side programs or customer incentives submitted under this section with projected annual customer incentive amounts less than five million dollars per year for each of the first two program years, the commission must issue an order as expeditiously as practicable on the written submissions of the electrical utility but may require an evidentiary hearing where novel or complex issues of fact require special review by the commission. Nothing in this section prevents the commission from ordering an electrical utility to modify or terminate a program approved pursuant to this section based on the results of standard evaluation, measurement, and verification protocols. (E) The Energy Office must develop and publish materials intended to inform and educate the public regarding programs available to a customer pursuant to this section. The Energy Office must maintain a list of approved vendors who are qualified and in good standing to provide services associated with these programs. Editor's Note 2025 Act No. 41, SECTION 1, provides as follows: "SECTION 1. This act may be cited as the 'South Carolina Energy Security Act.' " 2025 Act No. 41, SECTION 13.B, provides as follows: "B. All other sections of Chapter 37 may be cited as Article 1, entitled 'Planning for Energy Supply.'" 2025 Act No. 41, SECTION 33, provides as follows: "SECTION 33. (A) To foster economic development and future jobs in this State resulting from the supply chains associated with the same while supporting the significant and growing energy and capacity needs of the State, enhance grid resiliency, and maintain reliability, the General Assembly finds that the State of South Carolina should take steps necessary to encourage the development of a diverse mix of long-lead, clean generation resources that may include nuclear and advanced nuclear, biomass as defined in Section 12-63-20(B)(2) of the S.C. Code, hydrogen-capable resources, fusion energy, and other technologies, and should preserve the option of efficiency development of such long-lead resources with timely actions to establish or maintain eligibility for or capture available tax or other financial incentives or address operational needs. "(B) For an electrical utility to capture available tax or other financial or operational incentives for South Carolina ratepayers in a timely manner, the commission may find that actions by an electrical utility in pursuit of the directives in Section 58-37-35(A) are in the public interest, provided that the commission determines that such proposed actions are in the public interest and reasonably balance economic development and industry retention benefits, capacity expansion benefits, resource adequacy and diversification and potential risks, costs, and benefits to ratepayers and otherwise comply with all other legal requirements applicable to the electrical utility's proposed action. For the South Carolina Public Service Authority, the Office of Regulatory Staff and the Public Service Authority's board of directors shall apply the same principles described in this subsection in evaluating and approving actions proposed by the management of the Public Service Authority to achieve the objectives of this section." 2025 Act No. 41, SECTION 41, provides as follows: "SECTION 41. (A) Five years after the effective date of this act, the Office of the Regulatory Staff shall prepare a report, to be filed with the Public Utilities Review Committee and the General Assembly, to address the implementation of Article 24, Chapter 27, Title 58 as it relates to the following areas: "(1) assessing the functioning of the procedures established by section with recommendation for any changes required to ensure their efficient functioning, to promote regulatory efficiency, and to make further the establishment of just, reasonable, and fair rates; "(2) assessing the effect of rates on ratepayers of all classes; "(3) assessing the reliability of the electric system and whether investments made by electric utilities increased reliability compared to any change in electric utility rates experienced by ratepayers within the same timeframe; and "(4) any other information requested by the General Assembly to be included within the report. "(B) The Office of Regulatory Staff may engage a qualified, independent third party to assist in preparation of the report. "(C) All expenses and charges incurred by the Office of Regulatory Staff in the performance of its duties within this section may be defrayed by assessments made by the Comptroller General against the regulated electrical utilities regulated and based upon twenty-five percent of the gross revenues collected by such electrical utilities from their business done wholly within this State in the manner set out in Section 58-4-60 for other corporations." 2025 Act No. 41, SECTION 42, provides as follows: "SECTION 42. Upon passage of this act, Dominion Energy shall evaluate the process for converting the Wateree Generating Station from coal-fired generation to biomass-fired generation. Biomass-fired generation includes, but is not limited to, generation from the firing of wood pellets and wood chips. Dominion Energy must make a report concerning the conversion process to the Public Service Commission and General Assembly by no later than January 13, 2026."
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