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Question 1 of 30
1. Question
A large industrial manufacturing facility in South Carolina, a significant energy consumer, is proposing a modification to its existing energy supply contract with its sole electricity provider. This modification seeks to incorporate a new time-of-use (TOU) pricing structure with differentiated demand charges based on peak usage periods, aiming to incentivize off-peak consumption. According to South Carolina energy law and the regulatory framework governing public utilities, what is the primary procedural step the utility must undertake before this new TOU rate structure can be legally implemented for this industrial customer?
Correct
The South Carolina Public Service Commission (SCPSC) has the authority to regulate the rates, services, and facilities of public utilities operating within the state. This regulatory power is primarily derived from South Carolina Code of Laws Title 58, Chapter 3, which establishes the SCPSC and outlines its duties. When a utility seeks to implement a change in its rate structure, such as a demand charge adjustment for industrial customers, it must file an application with the SCPSC. The Commission then initiates a formal proceeding, often referred to as a rate case. This proceeding involves public notice, opportunities for intervention by interested parties (including consumer advocates and affected customer classes), and evidentiary hearings. During these hearings, the utility must present evidence to justify the proposed rate changes, demonstrating that they are just, reasonable, and not unduly discriminatory, as mandated by state law. The SCPSC’s decision is based on this evidence, considering factors like the utility’s cost of service, return on investment, and the impact on various customer classes. The Commission’s ultimate goal is to ensure that utility rates are sufficient to allow the utility to provide safe, reliable service while also protecting the public interest by preventing excessive or discriminatory charges. The principle of “just and reasonable” rates is a cornerstone of public utility regulation in South Carolina, as reflected in the statutes governing the SCPSC’s actions.
Incorrect
The South Carolina Public Service Commission (SCPSC) has the authority to regulate the rates, services, and facilities of public utilities operating within the state. This regulatory power is primarily derived from South Carolina Code of Laws Title 58, Chapter 3, which establishes the SCPSC and outlines its duties. When a utility seeks to implement a change in its rate structure, such as a demand charge adjustment for industrial customers, it must file an application with the SCPSC. The Commission then initiates a formal proceeding, often referred to as a rate case. This proceeding involves public notice, opportunities for intervention by interested parties (including consumer advocates and affected customer classes), and evidentiary hearings. During these hearings, the utility must present evidence to justify the proposed rate changes, demonstrating that they are just, reasonable, and not unduly discriminatory, as mandated by state law. The SCPSC’s decision is based on this evidence, considering factors like the utility’s cost of service, return on investment, and the impact on various customer classes. The Commission’s ultimate goal is to ensure that utility rates are sufficient to allow the utility to provide safe, reliable service while also protecting the public interest by preventing excessive or discriminatory charges. The principle of “just and reasonable” rates is a cornerstone of public utility regulation in South Carolina, as reflected in the statutes governing the SCPSC’s actions.
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Question 2 of 30
2. Question
Under the South Carolina Energy Freedom Act, a residential customer in Charleston installs a rooftop solar photovoltaic system. After meeting their own electricity needs for the month, the system exports 150 kilowatt-hours (kWh) of surplus electricity to the utility grid. The customer’s retail rate for electricity from their utility is $0.12 per kWh. What is the total credit the customer will receive on their next electricity bill for the exported surplus energy, assuming all regulatory requirements for net metering are met?
Correct
South Carolina law, specifically the South Carolina Energy Freedom Act (SC Code Ann. § 58-41-10 et seq.), outlines a framework for distributed generation, including solar energy systems. A key aspect of this legislation is the establishment of net metering policies. Net metering allows customers who generate their own electricity, typically from renewable sources like solar, to offset their electricity consumption by receiving credit for excess electricity they send back to the utility grid. The Act mandates that electric utilities in South Carolina offer net metering to eligible customers. Eligibility generally pertains to customers who own or operate a qualifying facility, which is a facility that uses renewable energy sources, has a generating capacity not exceeding a specified limit (often 2 MW for residential and small commercial customers), and is interconnected with the utility’s distribution system. The credit received for excess generation is typically at the customer’s retail rate, effectively reducing their monthly bill. This policy is designed to incentivize the adoption of renewable energy by ensuring customers are compensated fairly for the electricity they contribute to the grid. The South Carolina Public Service Commission (PSC) plays a crucial role in implementing and overseeing these regulations, including setting specific terms and conditions for net metering agreements. The Act aims to balance the interests of distributed generation customers with the need for grid reliability and fair cost allocation among all utility customers.
Incorrect
South Carolina law, specifically the South Carolina Energy Freedom Act (SC Code Ann. § 58-41-10 et seq.), outlines a framework for distributed generation, including solar energy systems. A key aspect of this legislation is the establishment of net metering policies. Net metering allows customers who generate their own electricity, typically from renewable sources like solar, to offset their electricity consumption by receiving credit for excess electricity they send back to the utility grid. The Act mandates that electric utilities in South Carolina offer net metering to eligible customers. Eligibility generally pertains to customers who own or operate a qualifying facility, which is a facility that uses renewable energy sources, has a generating capacity not exceeding a specified limit (often 2 MW for residential and small commercial customers), and is interconnected with the utility’s distribution system. The credit received for excess generation is typically at the customer’s retail rate, effectively reducing their monthly bill. This policy is designed to incentivize the adoption of renewable energy by ensuring customers are compensated fairly for the electricity they contribute to the grid. The South Carolina Public Service Commission (PSC) plays a crucial role in implementing and overseeing these regulations, including setting specific terms and conditions for net metering agreements. The Act aims to balance the interests of distributed generation customers with the need for grid reliability and fair cost allocation among all utility customers.
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Question 3 of 30
3. Question
A regulated electric cooperative in South Carolina, serving a predominantly rural residential customer base, seeks to implement a new tariff structure that significantly increases the per-kilowatt-hour charge for all residential consumption above a baseline usage tier. This proposed change aims to recover increased operational costs associated with grid modernization and renewable energy integration. What is the primary regulatory body in South Carolina responsible for reviewing and approving such a fundamental alteration to the cooperative’s established residential rate schedule, and what overarching principle guides its decision-making process in this instance?
Correct
The South Carolina Public Service Commission (SCPSC) has the authority to regulate the rates and services of public utilities operating within the state. When a utility proposes a change in its rate structure, such as an increase in the cost of electricity for residential customers, the SCPSC must conduct a formal rate case. This process involves extensive review of the utility’s financial records, operational costs, and projected revenue needs. The SCPSC evaluates whether the proposed rates are just and reasonable, ensuring that they allow the utility to earn a fair rate of return on its invested capital while also protecting consumers from excessive charges. The Commission’s decision-making process is guided by South Carolina statutes and its own regulations, which often require public hearings, expert testimony, and detailed economic analysis. The concept of “fair rate of return” is central, typically determined by considering the utility’s cost of capital, including both debt and equity financing, and allowing for a reasonable profit margin to attract investment. The SCPSC’s role is to balance the interests of the utility and its customers, ensuring reliable service at affordable prices. Therefore, any proposal to alter the fundamental cost of service for a significant customer class, like residential users, necessitates a thorough SCPSC review under its statutory mandate.
Incorrect
The South Carolina Public Service Commission (SCPSC) has the authority to regulate the rates and services of public utilities operating within the state. When a utility proposes a change in its rate structure, such as an increase in the cost of electricity for residential customers, the SCPSC must conduct a formal rate case. This process involves extensive review of the utility’s financial records, operational costs, and projected revenue needs. The SCPSC evaluates whether the proposed rates are just and reasonable, ensuring that they allow the utility to earn a fair rate of return on its invested capital while also protecting consumers from excessive charges. The Commission’s decision-making process is guided by South Carolina statutes and its own regulations, which often require public hearings, expert testimony, and detailed economic analysis. The concept of “fair rate of return” is central, typically determined by considering the utility’s cost of capital, including both debt and equity financing, and allowing for a reasonable profit margin to attract investment. The SCPSC’s role is to balance the interests of the utility and its customers, ensuring reliable service at affordable prices. Therefore, any proposal to alter the fundamental cost of service for a significant customer class, like residential users, necessitates a thorough SCPSC review under its statutory mandate.
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Question 4 of 30
4. Question
A regulated electric cooperative in South Carolina, seeking to construct a new transmission line to enhance grid reliability and accommodate anticipated load growth in the Upstate region, has submitted an application for a certificate of public convenience and necessity to the South Carolina Public Service Commission. The cooperative has presented extensive data on projected demand, engineering studies, and environmental impact assessments. What is the paramount legal standard the South Carolina Public Service Commission must apply when adjudicating this application for a certificate of public convenience and necessity?
Correct
The South Carolina Public Service Commission (SCPSC) has the authority to approve or deny applications for certificates of public convenience and necessity (CPCNs) for electric utilities. When evaluating such applications, the Commission considers various factors to ensure that the proposed project serves the public interest. These factors typically include the financial and technical qualifications of the applicant, the necessity and reasonableness of the proposed facility, the environmental impact, and the economic benefits to the state and its citizens. Specifically, under South Carolina Code Section 58-3-110, the Commission must find that the construction and operation of the facility are necessary for the provision of adequate service and that the applicant is capable of providing such service. The question asks about the primary basis for the SCPSC’s decision regarding a CPCN. While all the options represent considerations, the overarching legal mandate for granting a CPCN in South Carolina is the demonstration that the proposed facility is necessary for the provision of adequate service and that the applicant possesses the capability to deliver it, aligning with the public convenience and necessity standard. This involves a comprehensive review of the project’s feasibility, impact, and overall benefit to the state’s energy infrastructure and consumers. The SCPSC’s role is to balance the utility’s need to expand or upgrade its system with the public’s right to reliable, affordable, and environmentally responsible energy.
Incorrect
The South Carolina Public Service Commission (SCPSC) has the authority to approve or deny applications for certificates of public convenience and necessity (CPCNs) for electric utilities. When evaluating such applications, the Commission considers various factors to ensure that the proposed project serves the public interest. These factors typically include the financial and technical qualifications of the applicant, the necessity and reasonableness of the proposed facility, the environmental impact, and the economic benefits to the state and its citizens. Specifically, under South Carolina Code Section 58-3-110, the Commission must find that the construction and operation of the facility are necessary for the provision of adequate service and that the applicant is capable of providing such service. The question asks about the primary basis for the SCPSC’s decision regarding a CPCN. While all the options represent considerations, the overarching legal mandate for granting a CPCN in South Carolina is the demonstration that the proposed facility is necessary for the provision of adequate service and that the applicant possesses the capability to deliver it, aligning with the public convenience and necessity standard. This involves a comprehensive review of the project’s feasibility, impact, and overall benefit to the state’s energy infrastructure and consumers. The SCPSC’s role is to balance the utility’s need to expand or upgrade its system with the public’s right to reliable, affordable, and environmentally responsible energy.
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Question 5 of 30
5. Question
Consider a developer proposing to construct a 50-megawatt utility-scale solar photovoltaic facility in rural South Carolina. The project requires interconnection with the state’s transmission grid. What primary regulatory pathways must the developer successfully navigate to obtain approval for both the physical placement of the facility and its connection to the electrical network, adhering to South Carolina’s energy laws and PSC directives?
Correct
South Carolina’s regulatory framework for utility-scale solar energy projects, particularly concerning siting and interconnection, is governed by a combination of state statutes and Public Service Commission (PSC) regulations. The South Carolina Distributed Energy Resource Program (SC DER Program), established through legislation like the Energy Freedom Act (South Carolina Code of Laws Title 58, Chapter 40), outlines the procedures and requirements for such projects. Specifically, Section 58-40-30 addresses the siting of solar energy facilities, emphasizing the need for local government review and approval, often through zoning ordinances or special permits, in addition to state-level regulatory oversight. Interconnection standards are primarily dictated by the PSC’s rules, which often align with or reference the Institute of Electrical and Electronics Engineers (IEEE) standards, such as IEEE 1547, to ensure safe and reliable grid integration. The PSC also reviews and approves interconnection agreements between utilities and project developers. The concept of “just and reasonable” rates, a fundamental principle in utility regulation, also applies to the terms and conditions of interconnection, ensuring they do not unduly burden either the utility or the customer-generator. Therefore, a developer must navigate both local land use regulations and state PSC requirements for siting and interconnection.
Incorrect
South Carolina’s regulatory framework for utility-scale solar energy projects, particularly concerning siting and interconnection, is governed by a combination of state statutes and Public Service Commission (PSC) regulations. The South Carolina Distributed Energy Resource Program (SC DER Program), established through legislation like the Energy Freedom Act (South Carolina Code of Laws Title 58, Chapter 40), outlines the procedures and requirements for such projects. Specifically, Section 58-40-30 addresses the siting of solar energy facilities, emphasizing the need for local government review and approval, often through zoning ordinances or special permits, in addition to state-level regulatory oversight. Interconnection standards are primarily dictated by the PSC’s rules, which often align with or reference the Institute of Electrical and Electronics Engineers (IEEE) standards, such as IEEE 1547, to ensure safe and reliable grid integration. The PSC also reviews and approves interconnection agreements between utilities and project developers. The concept of “just and reasonable” rates, a fundamental principle in utility regulation, also applies to the terms and conditions of interconnection, ensuring they do not unduly burden either the utility or the customer-generator. Therefore, a developer must navigate both local land use regulations and state PSC requirements for siting and interconnection.
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Question 6 of 30
6. Question
Consider a residential property in Charleston, South Carolina, where the owner wishes to install a solar photovoltaic system exclusively for personal use and intends for it to operate in an “islanding” mode, meaning it will not be connected in parallel with the local utility’s distribution grid under any circumstances. What is the primary regulatory consideration under South Carolina law that the owner and installer must address with the utility, even for a system designed to be entirely off-grid?
Correct
The South Carolina Public Service Commission (SCPSC) has established regulations concerning the interconnection of distributed generation systems with the electric grid. Specifically, Rule 103-105 of the South Carolina Code of Regulations governs the terms and conditions for such interconnections. This rule aims to ensure safe, reliable, and equitable integration of customer-owned generation, such as solar photovoltaic systems, into the utility’s distribution network. Key aspects include technical requirements for equipment, safety protocols, metering arrangements, and the process for application and approval. When a customer proposes to install a system that is not intended to operate in parallel with the utility’s grid, but rather as a standalone or off-grid system, the SCPSC’s regulations still have implications, particularly regarding the safety and design of the system to prevent any potential backfeed or interference with the grid should it become reconnected or if there are grid-adjacent components. While Rule 103-105 primarily addresses parallel interconnection, the underlying principles of grid safety and preventing unintended connections are paramount. Therefore, even for a system designed to be isolated, the utility will still require adherence to certain safety standards and may need to approve the system’s design to ensure it does not pose a risk to utility personnel or equipment, or to the public, if the system’s components are in proximity to the grid. The concept of “islanding” is central here, where a distributed generator continues to operate even when the main grid is down. For parallel systems, this is a safety concern requiring anti-islanding protection. For systems intended to be off-grid, the focus is on ensuring that no connection is made that could inadvertently energize the grid during an outage. The SCPSC’s oversight extends to ensuring that all installations that could potentially interact with the grid, even indirectly, meet safety benchmarks. This involves reviewing the system’s configuration and protective measures to prevent any unauthorized or unsafe grid connection.
Incorrect
The South Carolina Public Service Commission (SCPSC) has established regulations concerning the interconnection of distributed generation systems with the electric grid. Specifically, Rule 103-105 of the South Carolina Code of Regulations governs the terms and conditions for such interconnections. This rule aims to ensure safe, reliable, and equitable integration of customer-owned generation, such as solar photovoltaic systems, into the utility’s distribution network. Key aspects include technical requirements for equipment, safety protocols, metering arrangements, and the process for application and approval. When a customer proposes to install a system that is not intended to operate in parallel with the utility’s grid, but rather as a standalone or off-grid system, the SCPSC’s regulations still have implications, particularly regarding the safety and design of the system to prevent any potential backfeed or interference with the grid should it become reconnected or if there are grid-adjacent components. While Rule 103-105 primarily addresses parallel interconnection, the underlying principles of grid safety and preventing unintended connections are paramount. Therefore, even for a system designed to be isolated, the utility will still require adherence to certain safety standards and may need to approve the system’s design to ensure it does not pose a risk to utility personnel or equipment, or to the public, if the system’s components are in proximity to the grid. The concept of “islanding” is central here, where a distributed generator continues to operate even when the main grid is down. For parallel systems, this is a safety concern requiring anti-islanding protection. For systems intended to be off-grid, the focus is on ensuring that no connection is made that could inadvertently energize the grid during an outage. The SCPSC’s oversight extends to ensuring that all installations that could potentially interact with the grid, even indirectly, meet safety benchmarks. This involves reviewing the system’s configuration and protective measures to prevent any unauthorized or unsafe grid connection.
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Question 7 of 30
7. Question
Considering the regulatory landscape for electricity providers in South Carolina, which entity’s rates and services are subject to the direct oversight and approval of the South Carolina Public Service Commission under its general jurisdictional authority?
Correct
The South Carolina Public Service Commission (SCPSC) regulates the rates and services of public utilities, including electric cooperatives, investor-owned utilities, and natural gas providers within the state. The regulatory framework is designed to ensure that utilities provide safe, reliable, and adequate service at just and reasonable rates. A key aspect of this regulation involves the process of rate cases, where utilities petition the SCPSC for approval to change their rates. The SCPSC evaluates these requests based on evidence presented by the utility, intervenors (such as consumer advocacy groups or large industrial customers), and staff. The commission’s decision-making process considers factors such as the utility’s cost of service, return on equity, capital structure, and prudency of expenditures. For electric cooperatives, which are member-owned, the regulatory oversight by the SCPSC differs in certain aspects compared to investor-owned utilities, particularly concerning their corporate structure and governance. However, the fundamental principles of rate regulation and service standards still apply. The question probes the specific jurisdiction of the SCPSC over different types of electric providers in South Carolina, highlighting a common point of inquiry in energy law regarding regulatory scope.
Incorrect
The South Carolina Public Service Commission (SCPSC) regulates the rates and services of public utilities, including electric cooperatives, investor-owned utilities, and natural gas providers within the state. The regulatory framework is designed to ensure that utilities provide safe, reliable, and adequate service at just and reasonable rates. A key aspect of this regulation involves the process of rate cases, where utilities petition the SCPSC for approval to change their rates. The SCPSC evaluates these requests based on evidence presented by the utility, intervenors (such as consumer advocacy groups or large industrial customers), and staff. The commission’s decision-making process considers factors such as the utility’s cost of service, return on equity, capital structure, and prudency of expenditures. For electric cooperatives, which are member-owned, the regulatory oversight by the SCPSC differs in certain aspects compared to investor-owned utilities, particularly concerning their corporate structure and governance. However, the fundamental principles of rate regulation and service standards still apply. The question probes the specific jurisdiction of the SCPSC over different types of electric providers in South Carolina, highlighting a common point of inquiry in energy law regarding regulatory scope.
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Question 8 of 30
8. Question
A major electric cooperative in South Carolina is planning to construct a new solar farm coupled with a battery energy storage system to meet increasing demand and integrate renewable energy sources. Before commencing construction, what is the primary regulatory hurdle the cooperative must overcome with the South Carolina Public Service Commission to ensure cost recovery for this substantial capital investment?
Correct
The South Carolina Public Service Commission (SCPSC) has regulatory authority over public utilities, including electric cooperatives, investor-owned utilities, and municipal power systems, within the state. This authority extends to approving rate structures, service standards, and major infrastructure projects. When an electric utility proposes a significant capital expenditure, such as the construction of a new power generation facility or substantial transmission line upgrades, it must typically seek a Certificate of Public Convenience and Necessity (CPCN) from the SCPSC. This process involves demonstrating that the proposed project is in the public interest, necessary for reliable service, and that the utility has considered alternatives and cost-effectiveness. The SCPSC’s review considers factors such as the projected demand for electricity, the environmental impact of the facility, the financial prudence of the investment, and the potential impact on customer rates. Failure to obtain a CPCN for projects requiring one can result in penalties and the disallowance of the costs from rate recovery. The specific requirements for a CPCN application are detailed in South Carolina Code of Laws, Title 58, Chapter 3, concerning public utilities and the SCPSC’s own regulations. The core principle is to ensure that utility investments align with the public good and are managed responsibly.
Incorrect
The South Carolina Public Service Commission (SCPSC) has regulatory authority over public utilities, including electric cooperatives, investor-owned utilities, and municipal power systems, within the state. This authority extends to approving rate structures, service standards, and major infrastructure projects. When an electric utility proposes a significant capital expenditure, such as the construction of a new power generation facility or substantial transmission line upgrades, it must typically seek a Certificate of Public Convenience and Necessity (CPCN) from the SCPSC. This process involves demonstrating that the proposed project is in the public interest, necessary for reliable service, and that the utility has considered alternatives and cost-effectiveness. The SCPSC’s review considers factors such as the projected demand for electricity, the environmental impact of the facility, the financial prudence of the investment, and the potential impact on customer rates. Failure to obtain a CPCN for projects requiring one can result in penalties and the disallowance of the costs from rate recovery. The specific requirements for a CPCN application are detailed in South Carolina Code of Laws, Title 58, Chapter 3, concerning public utilities and the SCPSC’s own regulations. The core principle is to ensure that utility investments align with the public good and are managed responsibly.
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Question 9 of 30
9. Question
Consider a scenario where a major electric utility operating in South Carolina proposes a significant adjustment to its retail electricity rates, citing increased fuel costs and necessary infrastructure upgrades to enhance grid resilience. Following the submission of the proposal, the South Carolina Public Service Commission initiates its statutory review. What is the primary legal standard the Commission must apply when evaluating the proposed rate adjustment to determine its validity and impact on consumers and the utility’s financial health?
Correct
The South Carolina Public Service Commission (SCPSC) regulates the rates and services of public utilities, including electric cooperatives, investor-owned utilities, and natural gas providers, within the state. When a utility proposes a rate increase, the SCPSC must conduct a formal hearing process to determine if the proposed rates are just and reasonable. This process involves reviewing the utility’s cost of service, including operating expenses, capital investments, and a fair rate of return on its rate base. The SCPSC has the authority to approve, deny, or modify the proposed rates based on the evidence presented. Section 58-27-1210 of the South Carolina Code of Laws, for instance, outlines the procedures for rate adjustments by electric utilities. The commission’s decision is guided by principles of ensuring adequate service to the public while allowing the utility to earn a reasonable profit to maintain its financial stability and attract capital. The burden of proof typically rests with the utility to demonstrate the necessity and reasonableness of the requested rate increase. Other stakeholders, such as consumer advocacy groups, can intervene in these proceedings to present their own evidence and arguments. The commission’s final order must be supported by findings of fact and conclusions of law.
Incorrect
The South Carolina Public Service Commission (SCPSC) regulates the rates and services of public utilities, including electric cooperatives, investor-owned utilities, and natural gas providers, within the state. When a utility proposes a rate increase, the SCPSC must conduct a formal hearing process to determine if the proposed rates are just and reasonable. This process involves reviewing the utility’s cost of service, including operating expenses, capital investments, and a fair rate of return on its rate base. The SCPSC has the authority to approve, deny, or modify the proposed rates based on the evidence presented. Section 58-27-1210 of the South Carolina Code of Laws, for instance, outlines the procedures for rate adjustments by electric utilities. The commission’s decision is guided by principles of ensuring adequate service to the public while allowing the utility to earn a reasonable profit to maintain its financial stability and attract capital. The burden of proof typically rests with the utility to demonstrate the necessity and reasonableness of the requested rate increase. Other stakeholders, such as consumer advocacy groups, can intervene in these proceedings to present their own evidence and arguments. The commission’s final order must be supported by findings of fact and conclusions of law.
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Question 10 of 30
10. Question
Consider a scenario where a major electric utility operating within South Carolina submits a comprehensive rate case application to the South Carolina Public Service Commission, seeking to recover significant investments in new generation facilities and infrastructure upgrades. Following extensive evidentiary proceedings, including expert testimony and public comment, the Commission determines that while some of the proposed investments are prudent and necessary for future service reliability, others are deemed excessive or not sufficiently demonstrated to be in the public interest. Based on these findings, the Commission issues an order that allows for a partial recovery of the requested revenue increase, reflecting a lower rate of return than initially proposed by the utility. Which of the following actions by the South Carolina Public Service Commission most accurately reflects its statutory authority in this situation under South Carolina energy law?
Correct
The South Carolina Public Service Commission (SCPSC) has the authority to approve or reject utility rate adjustments. When a regulated electric utility, such as South Carolina Electric & Gas (SCE&G) or Duke Energy Carolinas, proposes an increase in its base rates, it must file an application with the SCPSC. This application is subject to a formal review process, which includes public hearings, expert testimony from the utility, consumer advocates, and other interested parties, and detailed analysis of the utility’s proposed revenue requirement. The SCPSC evaluates the reasonableness of the utility’s operating expenses, capital investments, and the rate of return allowed on its rate base. The commission’s decision is guided by principles of ensuring safe, reliable, and adequate service at just and reasonable rates, as stipulated by South Carolina law, particularly the South Carolina Code of Laws, Title 58, Chapter 3. If the SCPSC finds that the proposed rate increase is not justified by the evidence presented, it has the statutory power to deny the application or approve a lesser increase than what the utility requested. The commission’s final order can be appealed to the South Carolina courts.
Incorrect
The South Carolina Public Service Commission (SCPSC) has the authority to approve or reject utility rate adjustments. When a regulated electric utility, such as South Carolina Electric & Gas (SCE&G) or Duke Energy Carolinas, proposes an increase in its base rates, it must file an application with the SCPSC. This application is subject to a formal review process, which includes public hearings, expert testimony from the utility, consumer advocates, and other interested parties, and detailed analysis of the utility’s proposed revenue requirement. The SCPSC evaluates the reasonableness of the utility’s operating expenses, capital investments, and the rate of return allowed on its rate base. The commission’s decision is guided by principles of ensuring safe, reliable, and adequate service at just and reasonable rates, as stipulated by South Carolina law, particularly the South Carolina Code of Laws, Title 58, Chapter 3. If the SCPSC finds that the proposed rate increase is not justified by the evidence presented, it has the statutory power to deny the application or approve a lesser increase than what the utility requested. The commission’s final order can be appealed to the South Carolina courts.
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Question 11 of 30
11. Question
Consider a scenario where a regulated electric utility in South Carolina, serving the Upstate region, seeks a rate adjustment from the South Carolina Public Service Commission. The utility proposes a new rate structure designed to recover its operating costs and earn a specific rate of return on its invested capital. The Commission, in its review process, must evaluate the utility’s proposed rate of return. Which of the following principles most accurately reflects the SCPSC’s fundamental responsibility when approving a rate of return for such a utility, as outlined in South Carolina law and regulatory practice?
Correct
The South Carolina Public Service Commission (SCPSC) has specific guidelines for determining the appropriate rate of return for regulated utilities, which directly impacts how much revenue a utility can earn. This determination is a crucial aspect of rate-making, ensuring that utilities can attract capital while also protecting consumers from excessive charges. The SCPSC employs a methodology that considers various factors to establish a fair rate of return. This process typically involves analyzing the utility’s cost of capital, which includes the cost of debt and the cost of equity. For the cost of equity, the SCPSC often utilizes models such as the Capital Asset Pricing Model (CAPM) or similar risk-premium approaches. The cost of debt is generally based on the utility’s current borrowing costs. The overall rate of return is then a weighted average of these components, reflecting the utility’s capital structure. The commission’s decision is guided by statutory mandates to ensure that rates are just and reasonable, allowing the utility to provide safe, adequate, and reliable service and to maintain its financial integrity. The SCPSC’s jurisdiction extends to investor-owned electric utilities, natural gas utilities, telephone companies, and water and sewer utilities operating within South Carolina. The commission’s authority is derived from state statutes, primarily Title 58 of the South Carolina Code of Laws. The rate-making process itself involves extensive evidentiary hearings where utilities present their case for desired rates, and intervenors, such as consumer advocates or industrial users, present their positions. The SCPSC then issues an order that sets the approved rates, including the authorized rate of return.
Incorrect
The South Carolina Public Service Commission (SCPSC) has specific guidelines for determining the appropriate rate of return for regulated utilities, which directly impacts how much revenue a utility can earn. This determination is a crucial aspect of rate-making, ensuring that utilities can attract capital while also protecting consumers from excessive charges. The SCPSC employs a methodology that considers various factors to establish a fair rate of return. This process typically involves analyzing the utility’s cost of capital, which includes the cost of debt and the cost of equity. For the cost of equity, the SCPSC often utilizes models such as the Capital Asset Pricing Model (CAPM) or similar risk-premium approaches. The cost of debt is generally based on the utility’s current borrowing costs. The overall rate of return is then a weighted average of these components, reflecting the utility’s capital structure. The commission’s decision is guided by statutory mandates to ensure that rates are just and reasonable, allowing the utility to provide safe, adequate, and reliable service and to maintain its financial integrity. The SCPSC’s jurisdiction extends to investor-owned electric utilities, natural gas utilities, telephone companies, and water and sewer utilities operating within South Carolina. The commission’s authority is derived from state statutes, primarily Title 58 of the South Carolina Code of Laws. The rate-making process itself involves extensive evidentiary hearings where utilities present their case for desired rates, and intervenors, such as consumer advocates or industrial users, present their positions. The SCPSC then issues an order that sets the approved rates, including the authorized rate of return.
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Question 12 of 30
12. Question
A manufacturing company in Greenville, South Carolina, has invested in a substantial solar photovoltaic array on its facility’s rooftops. The primary intention behind this installation is to significantly reduce the plant’s monthly electricity bills by directly powering its operations. While the system is capable of feeding any surplus electricity generated back into the local utility grid under a standard net metering arrangement, this secondary function is not the main driver of the investment. According to South Carolina’s property tax laws pertaining to energy generation property, what is the most accurate classification of this solar array’s eligibility for property tax exemption?
Correct
South Carolina law, specifically the South Carolina Energy Conservation and Energy Efficiency Act (S.C. Code Ann. § 12-37-220(B)(19) as amended), provides for certain exemptions and incentives for renewable energy property. When a solar energy system is installed for the purpose of generating electricity for a commercial facility, the determination of whether the system qualifies for property tax exemption hinges on its primary function and how it is integrated with the existing electrical infrastructure. The statute outlines that property used for the generation of electricity from solar energy is exempt from property tax if it is primarily for the purpose of supplying electricity to the facility itself, rather than for sale into the grid as a primary revenue source. In this scenario, the solar array is designed to offset the energy consumption of the manufacturing plant, reducing its reliance on grid-supplied electricity. The excess generation, if any, is sold back to the utility under a net metering agreement, which is secondary to the primary purpose of on-site consumption. Therefore, the solar energy system qualifies for the property tax exemption as its principal use is for the direct benefit of the commercial facility’s energy needs, aligning with the legislative intent to encourage on-site renewable energy generation for industrial and commercial users in South Carolina.
Incorrect
South Carolina law, specifically the South Carolina Energy Conservation and Energy Efficiency Act (S.C. Code Ann. § 12-37-220(B)(19) as amended), provides for certain exemptions and incentives for renewable energy property. When a solar energy system is installed for the purpose of generating electricity for a commercial facility, the determination of whether the system qualifies for property tax exemption hinges on its primary function and how it is integrated with the existing electrical infrastructure. The statute outlines that property used for the generation of electricity from solar energy is exempt from property tax if it is primarily for the purpose of supplying electricity to the facility itself, rather than for sale into the grid as a primary revenue source. In this scenario, the solar array is designed to offset the energy consumption of the manufacturing plant, reducing its reliance on grid-supplied electricity. The excess generation, if any, is sold back to the utility under a net metering agreement, which is secondary to the primary purpose of on-site consumption. Therefore, the solar energy system qualifies for the property tax exemption as its principal use is for the direct benefit of the commercial facility’s energy needs, aligning with the legislative intent to encourage on-site renewable energy generation for industrial and commercial users in South Carolina.
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Question 13 of 30
13. Question
Consider a scenario where a major electric utility operating within South Carolina proposes to implement a novel critical peak pricing (CPP) rate structure. This program is designed to incentivize significant reductions in customer electricity usage during specific, pre-identified periods of high system demand, which are communicated to customers with short notice. Under South Carolina’s energy regulatory framework, what is the primary procedural requirement for this utility to legally implement such a demand-side management program that alters standard rate schedules and customer obligations?
Correct
South Carolina law, specifically the South Carolina Energy Conservation and Load Management Act (S.C. Code Ann. § 58-41-10 et seq.), empowers the Public Service Commission (PSC) to regulate electric utilities. A key aspect of this regulation involves the approval of utility rate structures and service rules. When a utility proposes a significant change, such as implementing a demand-response program that directly impacts customer billing and load management, it must seek formal approval from the PSC. This process ensures that such programs are just, reasonable, and in the public interest, aligning with the state’s energy policy objectives. The PSC’s authority extends to reviewing the technical feasibility, economic impact, and customer benefit of proposed programs. Therefore, any program that alters the fundamental relationship between energy consumption and cost, like a critical peak pricing initiative, necessitates this regulatory oversight. The commission’s role is to balance the utility’s need for operational efficiency and revenue stability with the consumer’s right to fair and predictable service.
Incorrect
South Carolina law, specifically the South Carolina Energy Conservation and Load Management Act (S.C. Code Ann. § 58-41-10 et seq.), empowers the Public Service Commission (PSC) to regulate electric utilities. A key aspect of this regulation involves the approval of utility rate structures and service rules. When a utility proposes a significant change, such as implementing a demand-response program that directly impacts customer billing and load management, it must seek formal approval from the PSC. This process ensures that such programs are just, reasonable, and in the public interest, aligning with the state’s energy policy objectives. The PSC’s authority extends to reviewing the technical feasibility, economic impact, and customer benefit of proposed programs. Therefore, any program that alters the fundamental relationship between energy consumption and cost, like a critical peak pricing initiative, necessitates this regulatory oversight. The commission’s role is to balance the utility’s need for operational efficiency and revenue stability with the consumer’s right to fair and predictable service.
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Question 14 of 30
14. Question
When Santee Cooper, an electric cooperative operating within South Carolina, seeks to implement a revised rate structure affecting its residential customers, what is the primary procedural obligation the South Carolina Public Service Commission must fulfill before approving such a change, ensuring adherence to state regulatory principles?
Correct
The South Carolina Public Service Commission (SCPSC) oversees the regulation of public utilities, including electric cooperatives, to ensure fair rates and reliable service. When an electric cooperative, such as Santee Cooper, proposes a significant rate adjustment, the SCPSC must follow a defined procedural framework. This framework typically involves public notice, opportunities for public comment, and formal hearings where evidence is presented by the utility and potentially intervenes. The commission’s decision-making process is guided by statutory mandates and regulations that require the utility to demonstrate the reasonableness and necessity of the proposed rates, often through a cost-of-service study or other financial analyses. The SCPSC evaluates whether the proposed rates are just and reasonable, taking into account the utility’s operating costs, capital investments, and a fair rate of return. The commission’s authority is derived from South Carolina Code of Laws Title 58, Chapter 3, which establishes its powers and responsibilities in regulating public utilities. The ultimate goal is to balance the financial viability of the utility with the affordability of services for consumers. The specific process for rate adjustments is detailed in the SCPSC’s Rules of the Commission, particularly those pertaining to rate cases. The commission’s final order can approve, deny, or modify the proposed rates based on the evidence presented.
Incorrect
The South Carolina Public Service Commission (SCPSC) oversees the regulation of public utilities, including electric cooperatives, to ensure fair rates and reliable service. When an electric cooperative, such as Santee Cooper, proposes a significant rate adjustment, the SCPSC must follow a defined procedural framework. This framework typically involves public notice, opportunities for public comment, and formal hearings where evidence is presented by the utility and potentially intervenes. The commission’s decision-making process is guided by statutory mandates and regulations that require the utility to demonstrate the reasonableness and necessity of the proposed rates, often through a cost-of-service study or other financial analyses. The SCPSC evaluates whether the proposed rates are just and reasonable, taking into account the utility’s operating costs, capital investments, and a fair rate of return. The commission’s authority is derived from South Carolina Code of Laws Title 58, Chapter 3, which establishes its powers and responsibilities in regulating public utilities. The ultimate goal is to balance the financial viability of the utility with the affordability of services for consumers. The specific process for rate adjustments is detailed in the SCPSC’s Rules of the Commission, particularly those pertaining to rate cases. The commission’s final order can approve, deny, or modify the proposed rates based on the evidence presented.
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Question 15 of 30
15. Question
Consider a scenario where a major electric utility operating in South Carolina proposes a substantial rate adjustment to recover costs associated with a new large-scale solar farm and associated transmission upgrades. The utility submits its application to the South Carolina Public Service Commission (SCPSC) detailing the project’s capital expenditures and projected operational savings. Which of the following best describes the SCPSC’s primary legal and regulatory responsibility in evaluating this proposal under South Carolina law?
Correct
The South Carolina Public Service Commission (SCPSC) has broad authority to regulate public utilities within the state. This includes the power to approve or deny rate increases, ensure the safety and reliability of service, and oversee the development of energy infrastructure. The SCPSC’s regulatory framework is primarily established by Title 58 of the South Carolina Code of Laws, particularly Chapter 3, which outlines the powers and duties of the Commission. When a utility proposes a change in its rates or services that significantly impacts consumers, the Commission must conduct a formal proceeding. This proceeding typically involves public hearings, the submission of evidence by the utility and intervenors (such as consumer advocacy groups or industrial users), and a thorough review of the utility’s financial health, operational efficiency, and the reasonableness of the proposed changes. The Commission’s decisions are based on ensuring that rates are just and reasonable and that service is adequate, efficient, and reliable, all while considering the financial viability of the utility. The process is designed to balance the interests of both the utility and the ratepayers, ensuring that the utility can provide necessary services while protecting consumers from excessive charges. The Commission’s orders are subject to judicial review, but its initial decisions carry significant weight in the state’s energy landscape. The concept of “least cost planning” is also a crucial element in the Commission’s oversight, requiring utilities to demonstrate that their proposed investments and resource acquisition strategies are the most economical means of meeting projected energy demand.
Incorrect
The South Carolina Public Service Commission (SCPSC) has broad authority to regulate public utilities within the state. This includes the power to approve or deny rate increases, ensure the safety and reliability of service, and oversee the development of energy infrastructure. The SCPSC’s regulatory framework is primarily established by Title 58 of the South Carolina Code of Laws, particularly Chapter 3, which outlines the powers and duties of the Commission. When a utility proposes a change in its rates or services that significantly impacts consumers, the Commission must conduct a formal proceeding. This proceeding typically involves public hearings, the submission of evidence by the utility and intervenors (such as consumer advocacy groups or industrial users), and a thorough review of the utility’s financial health, operational efficiency, and the reasonableness of the proposed changes. The Commission’s decisions are based on ensuring that rates are just and reasonable and that service is adequate, efficient, and reliable, all while considering the financial viability of the utility. The process is designed to balance the interests of both the utility and the ratepayers, ensuring that the utility can provide necessary services while protecting consumers from excessive charges. The Commission’s orders are subject to judicial review, but its initial decisions carry significant weight in the state’s energy landscape. The concept of “least cost planning” is also a crucial element in the Commission’s oversight, requiring utilities to demonstrate that their proposed investments and resource acquisition strategies are the most economical means of meeting projected energy demand.
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Question 16 of 30
16. Question
When a major South Carolina electric utility proposes to construct a new natural gas-fired power plant to meet projected demand, what is the primary regulatory body and process within South Carolina that the utility must engage with to ensure the prudent and reasonable costs of this new facility can be recovered from its retail customers through adjusted rates?
Correct
The South Carolina Public Service Commission (SCPSC) has specific regulations regarding the recovery of costs for new generating facilities. Under South Carolina law, particularly the provisions governing utility rate making and the recovery of capital expenditures for new power plants, utilities must seek approval from the SCPSC to recover these costs through customer rates. This process typically involves demonstrating that the investment was prudent, necessary, and in the public interest. The SCPSC evaluates such requests through formal proceedings, often involving detailed evidentiary hearings where the utility presents its case for cost recovery. Other regulatory bodies, such as the Federal Energy Regulatory Commission (FERC), have jurisdiction over wholesale power sales and interstate transmission, but the direct recovery of capital costs for generation facilities from retail customers within South Carolina falls under the purview of the SCPSC. Environmental impact statements are crucial for project approval but do not directly dictate the mechanism for cost recovery from ratepayers. Similarly, while bond issuance is a common financing method, it is the SCPSC’s approval of the rate structure that allows for the recovery of those bond-related expenses. The South Carolina Energy Freedom Act, while promoting renewable energy, primarily addresses renewable energy targets and net metering, not the general framework for recovering costs of traditional generating assets from the SCPSC.
Incorrect
The South Carolina Public Service Commission (SCPSC) has specific regulations regarding the recovery of costs for new generating facilities. Under South Carolina law, particularly the provisions governing utility rate making and the recovery of capital expenditures for new power plants, utilities must seek approval from the SCPSC to recover these costs through customer rates. This process typically involves demonstrating that the investment was prudent, necessary, and in the public interest. The SCPSC evaluates such requests through formal proceedings, often involving detailed evidentiary hearings where the utility presents its case for cost recovery. Other regulatory bodies, such as the Federal Energy Regulatory Commission (FERC), have jurisdiction over wholesale power sales and interstate transmission, but the direct recovery of capital costs for generation facilities from retail customers within South Carolina falls under the purview of the SCPSC. Environmental impact statements are crucial for project approval but do not directly dictate the mechanism for cost recovery from ratepayers. Similarly, while bond issuance is a common financing method, it is the SCPSC’s approval of the rate structure that allows for the recovery of those bond-related expenses. The South Carolina Energy Freedom Act, while promoting renewable energy, primarily addresses renewable energy targets and net metering, not the general framework for recovering costs of traditional generating assets from the SCPSC.
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Question 17 of 30
17. Question
Consider a scenario where a major South Carolina electric utility proposes a significant rate adjustment to recover the capital costs of a newly completed nuclear power facility. The utility has submitted extensive documentation to the South Carolina Public Service Commission (SCPSC) detailing the project’s planning, construction, and projected operational expenses. During the SCPSC’s review, evidence emerges suggesting that certain construction phases experienced substantial cost overruns due to what appears to be suboptimal project management and a failure to adequately explore alternative construction methodologies that might have been more cost-effective. Which of the following actions by the SCPSC would most directly reflect its statutory mandate to ensure just and reasonable rates in South Carolina, given these circumstances?
Correct
The South Carolina Public Service Commission (SCPSC) has the authority to approve or reject rate adjustments proposed by regulated utilities. When a utility seeks to recover costs associated with new generation facilities, such as a hypothetical nuclear power plant in South Carolina, the SCPSC must conduct a thorough review. This review typically involves assessing the prudence of the utility’s decisions throughout the project’s lifecycle, including planning, construction, and operation. The SCPSC’s decision-making process is guided by statutes like the South Carolina Code of Laws, particularly Title 58, which governs public utilities. Section 58-5-240 of the South Carolina Code of Laws, for instance, addresses the commission’s role in approving major utility projects and their associated costs. The commission considers various factors, including whether the costs incurred were reasonable and necessary, if the project serves the public interest, and if the proposed rate increase is justified based on the investment and projected operational expenses. The commission may disallow certain costs if they are found to be imprudent or not in the public interest. For example, if a utility incurred significant cost overruns due to mismanagement or failed to explore less expensive alternatives, the SCPSC could order that a portion of those costs not be passed on to ratepayers. The ultimate goal is to ensure that utility rates are just and reasonable, reflecting the actual cost of providing service while protecting consumers from excessive charges. The specific outcome of such a review, whether full cost recovery, partial recovery, or denial, depends on the detailed evidence presented by the utility and the commission’s findings regarding prudence and public necessity.
Incorrect
The South Carolina Public Service Commission (SCPSC) has the authority to approve or reject rate adjustments proposed by regulated utilities. When a utility seeks to recover costs associated with new generation facilities, such as a hypothetical nuclear power plant in South Carolina, the SCPSC must conduct a thorough review. This review typically involves assessing the prudence of the utility’s decisions throughout the project’s lifecycle, including planning, construction, and operation. The SCPSC’s decision-making process is guided by statutes like the South Carolina Code of Laws, particularly Title 58, which governs public utilities. Section 58-5-240 of the South Carolina Code of Laws, for instance, addresses the commission’s role in approving major utility projects and their associated costs. The commission considers various factors, including whether the costs incurred were reasonable and necessary, if the project serves the public interest, and if the proposed rate increase is justified based on the investment and projected operational expenses. The commission may disallow certain costs if they are found to be imprudent or not in the public interest. For example, if a utility incurred significant cost overruns due to mismanagement or failed to explore less expensive alternatives, the SCPSC could order that a portion of those costs not be passed on to ratepayers. The ultimate goal is to ensure that utility rates are just and reasonable, reflecting the actual cost of providing service while protecting consumers from excessive charges. The specific outcome of such a review, whether full cost recovery, partial recovery, or denial, depends on the detailed evidence presented by the utility and the commission’s findings regarding prudence and public necessity.
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Question 18 of 30
18. Question
Consider a developer proposing to construct a 100-megawatt utility-scale solar photovoltaic facility in rural South Carolina. Before breaking ground, what essential regulatory step must the developer complete to legally commence construction and operation of this facility within the state, according to South Carolina energy law?
Correct
The South Carolina Public Service Commission (SCPSC) has specific regulations regarding the siting and approval of electric power generation facilities, particularly those powered by renewable energy sources like solar. Under South Carolina law, specifically the Energy Freedom Act (S.C. Code Ann. § 58-40-10 et seq.), the Commission oversees the approval process for such facilities. The Act requires that an applicant seeking to construct a new electric power generation facility, including large-scale solar farms, must obtain a Certificate of Public Convenience and Necessity (CPCN) from the SCPSC. This process involves demonstrating that the proposed facility is needed, will be constructed in a manner that minimizes environmental impact, and is in the public interest. A key component of this demonstration is the submission of an application that includes detailed site selection studies, environmental impact assessments, and evidence of public need or benefit. The Commission then reviews this application, often holding public hearings, to determine whether to grant the CPCN. Failure to obtain a CPCN before commencing construction can lead to significant penalties. The Commission’s authority stems from its mandate to ensure reliable, safe, and affordable energy for the citizens of South Carolina, balancing economic development with environmental stewardship and consumer protection.
Incorrect
The South Carolina Public Service Commission (SCPSC) has specific regulations regarding the siting and approval of electric power generation facilities, particularly those powered by renewable energy sources like solar. Under South Carolina law, specifically the Energy Freedom Act (S.C. Code Ann. § 58-40-10 et seq.), the Commission oversees the approval process for such facilities. The Act requires that an applicant seeking to construct a new electric power generation facility, including large-scale solar farms, must obtain a Certificate of Public Convenience and Necessity (CPCN) from the SCPSC. This process involves demonstrating that the proposed facility is needed, will be constructed in a manner that minimizes environmental impact, and is in the public interest. A key component of this demonstration is the submission of an application that includes detailed site selection studies, environmental impact assessments, and evidence of public need or benefit. The Commission then reviews this application, often holding public hearings, to determine whether to grant the CPCN. Failure to obtain a CPCN before commencing construction can lead to significant penalties. The Commission’s authority stems from its mandate to ensure reliable, safe, and affordable energy for the citizens of South Carolina, balancing economic development with environmental stewardship and consumer protection.
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Question 19 of 30
19. Question
A regulated electric utility operating within South Carolina is developing its next ten-year integrated resource plan (IRP) to submit to the Public Service Commission of South Carolina (PSCSC). The utility is considering a portfolio of new generation resources, including a large-scale solar photovoltaic project, a natural gas combined-cycle plant, and an expansion of its existing hydroelectric capacity. In addition to these supply-side options, the utility is also evaluating enhanced energy efficiency programs and a pilot demand response initiative. Which of the following best describes the primary legal and regulatory objective the utility must demonstrate to the PSCSC for approval of its proposed IRP, as guided by the South Carolina Energy Independence Act of 2007 and subsequent regulations?
Correct
South Carolina law, specifically the South Carolina Energy Independence Act of 2007, established the framework for integrated resource planning (IRP) for electric utilities. An IRP is a comprehensive, long-term plan that electric utilities must submit to the Public Service Commission of South Carolina (PSCSC) for approval. The purpose of an IRP is to ensure that a utility can meet the projected electricity needs of its customers in a reliable, cost-effective, and environmentally responsible manner. The process involves forecasting future demand, evaluating a range of generation and demand-side management resources, and selecting the optimal mix of resources to meet those needs over a specified planning horizon, typically 10 to 20 years. Key elements include assessing existing resources, identifying potential new resources (such as renewable energy, natural gas, coal, nuclear), and considering energy efficiency and demand response programs. The PSCSC reviews the IRP to ensure it aligns with state energy policies, promotes economic development, and protects consumer interests. The Act also mandated specific renewable energy portfolio standards and energy efficiency targets for utilities, which are integral components of the IRP process. Utilities must demonstrate how their proposed resource mix will achieve these goals.
Incorrect
South Carolina law, specifically the South Carolina Energy Independence Act of 2007, established the framework for integrated resource planning (IRP) for electric utilities. An IRP is a comprehensive, long-term plan that electric utilities must submit to the Public Service Commission of South Carolina (PSCSC) for approval. The purpose of an IRP is to ensure that a utility can meet the projected electricity needs of its customers in a reliable, cost-effective, and environmentally responsible manner. The process involves forecasting future demand, evaluating a range of generation and demand-side management resources, and selecting the optimal mix of resources to meet those needs over a specified planning horizon, typically 10 to 20 years. Key elements include assessing existing resources, identifying potential new resources (such as renewable energy, natural gas, coal, nuclear), and considering energy efficiency and demand response programs. The PSCSC reviews the IRP to ensure it aligns with state energy policies, promotes economic development, and protects consumer interests. The Act also mandated specific renewable energy portfolio standards and energy efficiency targets for utilities, which are integral components of the IRP process. Utilities must demonstrate how their proposed resource mix will achieve these goals.
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Question 20 of 30
20. Question
A regulated electric cooperative in South Carolina, serving a predominantly rural customer base, submits a formal request to the Public Service Commission seeking an adjustment to its existing rate structure. The cooperative argues that escalating fuel costs and necessary infrastructure upgrades to enhance grid resilience necessitate an increase in revenue. During the ensuing regulatory proceeding, the cooperative presents extensive documentation detailing its operational expenditures, projected capital investments, and a proposed average rate increase of 8.5%. The Commission’s staff conducts an independent audit of the cooperative’s financial records and operational efficiency. Following a public hearing where consumer advocates also present testimony, the Commission deliberates on the evidence. What is the primary determinant for the South Carolina Public Service Commission in approving or denying the proposed rate adjustment for the electric cooperative?
Correct
The South Carolina Public Service Commission (SCPSC) regulates electric utilities within the state. When a utility proposes a rate increase, the SCPSC must ensure that the proposed rates are just and reasonable, reflecting the actual cost of providing service and allowing for a fair rate of return on the utility’s investment. This process involves a detailed review of the utility’s operating expenses, capital investments, and revenue requirements. The SCPSC can approve, deny, or modify the proposed rates based on this review. South Carolina Code Annotated Section 58-27-120 grants the commission the authority to fix and establish just and reasonable rates for electric utilities. Furthermore, the commission’s decisions are guided by principles of prudent management and the need to ensure reliable service for consumers. The specific percentage of the rate increase is not determinative; rather, it is the commission’s finding of reasonableness and necessity based on evidence presented during a formal hearing process that dictates the outcome. The commission’s role is to balance the interests of the utility in maintaining financial stability and the interests of consumers in paying fair and affordable rates. The SCPSC must consider factors such as the utility’s cost of capital, operating efficiency, and the economic conditions affecting consumers in South Carolina.
Incorrect
The South Carolina Public Service Commission (SCPSC) regulates electric utilities within the state. When a utility proposes a rate increase, the SCPSC must ensure that the proposed rates are just and reasonable, reflecting the actual cost of providing service and allowing for a fair rate of return on the utility’s investment. This process involves a detailed review of the utility’s operating expenses, capital investments, and revenue requirements. The SCPSC can approve, deny, or modify the proposed rates based on this review. South Carolina Code Annotated Section 58-27-120 grants the commission the authority to fix and establish just and reasonable rates for electric utilities. Furthermore, the commission’s decisions are guided by principles of prudent management and the need to ensure reliable service for consumers. The specific percentage of the rate increase is not determinative; rather, it is the commission’s finding of reasonableness and necessity based on evidence presented during a formal hearing process that dictates the outcome. The commission’s role is to balance the interests of the utility in maintaining financial stability and the interests of consumers in paying fair and affordable rates. The SCPSC must consider factors such as the utility’s cost of capital, operating efficiency, and the economic conditions affecting consumers in South Carolina.
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Question 21 of 30
21. Question
A renewable energy developer proposes to construct a 150-megawatt solar photovoltaic facility in rural South Carolina. The developer has secured land options and conducted preliminary environmental assessments. To proceed with the project, what is the essential regulatory authorization the developer must obtain from the state of South Carolina, and what key principle guides the issuing body’s decision-making process?
Correct
South Carolina law, particularly under the purview of the Public Service Commission (PSC), governs the development and operation of electric power generation facilities. When considering the siting of a new utility-scale solar farm in South Carolina, an applicant must navigate a complex regulatory landscape. The primary statutory framework for determining the need and appropriate location for such infrastructure is found within Title 58 of the South Carolina Code of Laws, specifically concerning public utilities and their certificates of public convenience and necessity. The PSC is tasked with ensuring that proposed projects are not only technically feasible and economically sound but also serve the public interest, considering factors such as environmental impact, land use compatibility, and the overall reliability and affordability of electricity supply. The process involves a detailed application that demonstrates compliance with state and federal regulations, including environmental reviews and public input. The PSC’s decision-making authority is rooted in its mandate to balance the interests of the utility, its ratepayers, and the broader public, including environmental stewardship and economic development. This involves a thorough evaluation of alternatives and a demonstration that the proposed facility aligns with the state’s energy policies and goals, as articulated through various legislative acts and PSC directives. The certificate of public convenience and necessity is the key authorization required before construction can commence, signifying that the project meets the necessary legal and regulatory thresholds for public utility operations within South Carolina.
Incorrect
South Carolina law, particularly under the purview of the Public Service Commission (PSC), governs the development and operation of electric power generation facilities. When considering the siting of a new utility-scale solar farm in South Carolina, an applicant must navigate a complex regulatory landscape. The primary statutory framework for determining the need and appropriate location for such infrastructure is found within Title 58 of the South Carolina Code of Laws, specifically concerning public utilities and their certificates of public convenience and necessity. The PSC is tasked with ensuring that proposed projects are not only technically feasible and economically sound but also serve the public interest, considering factors such as environmental impact, land use compatibility, and the overall reliability and affordability of electricity supply. The process involves a detailed application that demonstrates compliance with state and federal regulations, including environmental reviews and public input. The PSC’s decision-making authority is rooted in its mandate to balance the interests of the utility, its ratepayers, and the broader public, including environmental stewardship and economic development. This involves a thorough evaluation of alternatives and a demonstration that the proposed facility aligns with the state’s energy policies and goals, as articulated through various legislative acts and PSC directives. The certificate of public convenience and necessity is the key authorization required before construction can commence, signifying that the project meets the necessary legal and regulatory thresholds for public utility operations within South Carolina.
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Question 22 of 30
22. Question
Consider a scenario where a major electric utility operating in South Carolina proposes a new rate rider to recover costs associated with a significant grid modernization initiative, including the deployment of advanced metering infrastructure and enhanced cybersecurity measures. This initiative is intended to improve service reliability and operational efficiency. According to the principles established by the Electric Reliability Investment Act (ERIA) and the regulatory framework overseen by the South Carolina Public Service Commission (SCPSC), what is the primary procedural requirement for the utility to gain approval for this rate rider?
Correct
The South Carolina Public Service Commission (SCPSC) has regulatory authority over investor-owned electric utilities in the state, including the approval of rate structures and the oversight of utility operations to ensure reliable and affordable service. The Electric Reliability Investment Act (ERIA), codified in South Carolina law, specifically addresses the framework for utility investments in infrastructure and generation, aiming to balance cost recovery for utilities with consumer protection. Under ERIA, utilities can propose rate adjustments through various mechanisms, including base rate cases and, relevant here, through performance-based rate adjustments or riders designed to incentivize specific outcomes, such as grid modernization or reliability improvements. When a utility proposes a new rate schedule or rider, the SCPSC conducts a thorough review process. This process involves evaluating the prudence of the proposed investments, the reasonableness of the costs, and the impact on customer rates. The commission’s decision is based on evidence presented by the utility, intervenors (such as consumer advocacy groups), and its own staff. The SCPSC must ensure that any approved rate adjustments are just and reasonable and in the public interest, aligning with the state’s energy policy objectives. The specific mechanism for recovery, such as a fuel adjustment clause or a capital investment rider, is determined by the commission based on the nature of the investment and the statutory provisions governing such recovery. The ERIA provides a statutory basis for the commission to consider and approve these mechanisms, ensuring that utilities can recover prudently incurred costs for investments that enhance the reliability and efficiency of the electric grid.
Incorrect
The South Carolina Public Service Commission (SCPSC) has regulatory authority over investor-owned electric utilities in the state, including the approval of rate structures and the oversight of utility operations to ensure reliable and affordable service. The Electric Reliability Investment Act (ERIA), codified in South Carolina law, specifically addresses the framework for utility investments in infrastructure and generation, aiming to balance cost recovery for utilities with consumer protection. Under ERIA, utilities can propose rate adjustments through various mechanisms, including base rate cases and, relevant here, through performance-based rate adjustments or riders designed to incentivize specific outcomes, such as grid modernization or reliability improvements. When a utility proposes a new rate schedule or rider, the SCPSC conducts a thorough review process. This process involves evaluating the prudence of the proposed investments, the reasonableness of the costs, and the impact on customer rates. The commission’s decision is based on evidence presented by the utility, intervenors (such as consumer advocacy groups), and its own staff. The SCPSC must ensure that any approved rate adjustments are just and reasonable and in the public interest, aligning with the state’s energy policy objectives. The specific mechanism for recovery, such as a fuel adjustment clause or a capital investment rider, is determined by the commission based on the nature of the investment and the statutory provisions governing such recovery. The ERIA provides a statutory basis for the commission to consider and approve these mechanisms, ensuring that utilities can recover prudently incurred costs for investments that enhance the reliability and efficiency of the electric grid.
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Question 23 of 30
23. Question
Consider a scenario where a major electric utility operating in South Carolina seeks to recover costs associated with a significant, federally mandated infrastructure upgrade to its transmission grid. The utility files a formal application with the South Carolina Public Service Commission (SCPSC) requesting a rate increase to cover these costs and a reasonable rate of return on the new investment. During the regulatory review process, various stakeholders, including a consumer advocacy group and a large industrial customer, present arguments questioning the prudence of certain expenditures and proposing alternative, less costly solutions. The SCPSC must evaluate the utility’s request in light of these arguments and existing South Carolina statutes. Which of the following principles most accurately reflects the SCPSC’s primary responsibility in adjudicating this rate case, balancing the utility’s need for recovery with consumer protection under South Carolina energy law?
Correct
The South Carolina Public Service Commission (SCPSC) has the authority to regulate public utilities within the state, including electric cooperatives, investor-owned utilities, and natural gas providers. The regulatory framework in South Carolina is primarily governed by Title 58 of the South Carolina Code of Laws. Specifically, Chapter 27 deals with electric utilities, Chapter 33 addresses natural gas utilities, and Chapter 29 covers telephone utilities, but the principles of utility regulation extend to all. When a utility proposes a change in its rates or service terms, it must file an application with the SCPSC. The SCPSC then reviews this application through a formal process that often includes public hearings, testimony from intervenors (such as consumer advocacy groups or large industrial customers), and expert analysis of the utility’s proposed costs and revenues. The commission’s decision is based on whether the proposed rates are just and reasonable and in the public interest, ensuring that the utility can recover its prudently incurred costs while earning a fair rate of return on its invested capital, but not an excessive profit. The SCPSC’s regulatory authority is rooted in the state’s police power to protect the public welfare and ensure the provision of essential services. The determination of a “fair rate of return” is a complex process involving the calculation of the utility’s cost of capital, considering both debt and equity financing, and is often a point of contention in rate cases. The SCPSC’s final order dictates the approved rates and service conditions.
Incorrect
The South Carolina Public Service Commission (SCPSC) has the authority to regulate public utilities within the state, including electric cooperatives, investor-owned utilities, and natural gas providers. The regulatory framework in South Carolina is primarily governed by Title 58 of the South Carolina Code of Laws. Specifically, Chapter 27 deals with electric utilities, Chapter 33 addresses natural gas utilities, and Chapter 29 covers telephone utilities, but the principles of utility regulation extend to all. When a utility proposes a change in its rates or service terms, it must file an application with the SCPSC. The SCPSC then reviews this application through a formal process that often includes public hearings, testimony from intervenors (such as consumer advocacy groups or large industrial customers), and expert analysis of the utility’s proposed costs and revenues. The commission’s decision is based on whether the proposed rates are just and reasonable and in the public interest, ensuring that the utility can recover its prudently incurred costs while earning a fair rate of return on its invested capital, but not an excessive profit. The SCPSC’s regulatory authority is rooted in the state’s police power to protect the public welfare and ensure the provision of essential services. The determination of a “fair rate of return” is a complex process involving the calculation of the utility’s cost of capital, considering both debt and equity financing, and is often a point of contention in rate cases. The SCPSC’s final order dictates the approved rates and service conditions.
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Question 24 of 30
24. Question
When an electric cooperative operating within South Carolina proposes adjustments to its service rates, what is the primary role of the South Carolina Public Service Commission (SCPSC) concerning these proposed changes, considering the cooperative’s member-owned and non-profit operational structure?
Correct
The South Carolina Public Service Commission (SCPSC) regulates the rates and services of public utilities in South Carolina, including electric cooperatives. While electric cooperatives are member-owned and operate on a non-profit basis, they are still subject to certain regulatory oversight. The SCPSC’s authority over electric cooperatives is primarily derived from South Carolina Code of Laws Title 58, Chapter 27, which governs electric utilities. Specifically, Section 58-27-1310 grants the Commission the power to regulate the rates and charges of electric utilities. However, the extent of this regulation for cooperatives differs from investor-owned utilities. The key distinction lies in the cooperative’s member-owned structure and its non-profit operational model. The SCPSC’s role is to ensure that rates are just and reasonable, and that services are adequate, while also acknowledging the cooperative’s unique governance. The PSC does not directly set cooperative rates in the same manner as for investor-owned utilities, but it has oversight and can approve or reject proposed rate adjustments based on their reasonableness and impact on members. The cooperative’s board of directors has significant authority in setting rates, but these proposed changes are typically filed with and reviewed by the SCPSC. The SCPSC’s jurisdiction ensures that the cooperative’s operations align with public interest standards for utility provision, even within its cooperative framework. This oversight is crucial for maintaining fair pricing and service quality for all members.
Incorrect
The South Carolina Public Service Commission (SCPSC) regulates the rates and services of public utilities in South Carolina, including electric cooperatives. While electric cooperatives are member-owned and operate on a non-profit basis, they are still subject to certain regulatory oversight. The SCPSC’s authority over electric cooperatives is primarily derived from South Carolina Code of Laws Title 58, Chapter 27, which governs electric utilities. Specifically, Section 58-27-1310 grants the Commission the power to regulate the rates and charges of electric utilities. However, the extent of this regulation for cooperatives differs from investor-owned utilities. The key distinction lies in the cooperative’s member-owned structure and its non-profit operational model. The SCPSC’s role is to ensure that rates are just and reasonable, and that services are adequate, while also acknowledging the cooperative’s unique governance. The PSC does not directly set cooperative rates in the same manner as for investor-owned utilities, but it has oversight and can approve or reject proposed rate adjustments based on their reasonableness and impact on members. The cooperative’s board of directors has significant authority in setting rates, but these proposed changes are typically filed with and reviewed by the SCPSC. The SCPSC’s jurisdiction ensures that the cooperative’s operations align with public interest standards for utility provision, even within its cooperative framework. This oversight is crucial for maintaining fair pricing and service quality for all members.
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Question 25 of 30
25. Question
A hypothetical electric cooperative, “Palmetto Rural Power,” operating exclusively within South Carolina, proposes to acquire the service territory of a small, financially distressed investor-owned utility in an adjacent county. This acquisition would involve taking over all existing transmission and distribution infrastructure and customer accounts within that specific geographic area. Under South Carolina energy law, what is the primary regulatory body responsible for approving such a significant alteration to the electric cooperative’s service territory and operational footprint?
Correct
The South Carolina Public Service Commission (SCPSC) has regulatory authority over electric utilities operating within the state. When an electric utility proposes a significant change to its service territory, such as acquiring or divesting a substantial portion of its customer base or infrastructure, it must seek approval from the SCPSC. This process ensures that such changes are in the public interest, considering factors like service reliability, rate impacts, and environmental considerations. South Carolina Code of Laws Title 58, Chapter 3, specifically addresses the powers and duties of the Public Service Commission, including its jurisdiction over utility service territories and the approval of mergers, consolidations, and acquisitions of utility assets. The SCPSC’s oversight is designed to prevent anticompetitive practices and ensure that the public receives adequate and reasonably priced electric service. Therefore, any proposed alteration to an electric utility’s established service territory, particularly one involving the transfer of significant assets or customer loads, necessitates formal application and approval by the SCPSC.
Incorrect
The South Carolina Public Service Commission (SCPSC) has regulatory authority over electric utilities operating within the state. When an electric utility proposes a significant change to its service territory, such as acquiring or divesting a substantial portion of its customer base or infrastructure, it must seek approval from the SCPSC. This process ensures that such changes are in the public interest, considering factors like service reliability, rate impacts, and environmental considerations. South Carolina Code of Laws Title 58, Chapter 3, specifically addresses the powers and duties of the Public Service Commission, including its jurisdiction over utility service territories and the approval of mergers, consolidations, and acquisitions of utility assets. The SCPSC’s oversight is designed to prevent anticompetitive practices and ensure that the public receives adequate and reasonably priced electric service. Therefore, any proposed alteration to an electric utility’s established service territory, particularly one involving the transfer of significant assets or customer loads, necessitates formal application and approval by the SCPSC.
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Question 26 of 30
26. Question
A major electric utility operating exclusively within South Carolina proposes to introduce a new rate structure for its large industrial customers that includes a significant demand charge component. This proposed change aims to better align the utility’s revenue with the peak capacity demands of these customers. What is the primary legal mechanism through which this utility must seek authorization to implement this new rate structure in South Carolina?
Correct
The South Carolina Public Service Commission (SCPSC) has the authority to regulate the rates, services, and practices of public utilities operating within the state. When a utility proposes a change to its rate structure, such as implementing a demand-charge component for industrial customers, it must file an application with the SCPSC. This application is subject to a formal review process, which includes public notice, opportunities for public comment, and evidentiary hearings. The SCPSC evaluates the proposed rates based on various factors, including the cost of service, the reasonableness of the proposed charges, the impact on different customer classes, and the overall financial health and operational efficiency of the utility. The SCPSC’s decision-making is guided by principles of ensuring just and reasonable rates, preventing discrimination among customers, and promoting reliable utility service. In this scenario, the SCPSC’s approval is a prerequisite for the utility to lawfully implement the new rate structure. Without this approval, the utility cannot unilaterally impose the demand charge on its industrial customers. The Public Utility Regulatory Policies Act (PURPA) of 1978, while influencing utility regulation, does not grant utilities the authority to bypass state regulatory bodies for rate changes. Similarly, general business practices or internal company policies do not supersede the regulatory authority of the SCPSC. The Federal Energy Regulatory Commission (FERC) primarily regulates wholesale electricity sales and interstate transmission, not retail rate structures set by state commissions for intrastate utility operations.
Incorrect
The South Carolina Public Service Commission (SCPSC) has the authority to regulate the rates, services, and practices of public utilities operating within the state. When a utility proposes a change to its rate structure, such as implementing a demand-charge component for industrial customers, it must file an application with the SCPSC. This application is subject to a formal review process, which includes public notice, opportunities for public comment, and evidentiary hearings. The SCPSC evaluates the proposed rates based on various factors, including the cost of service, the reasonableness of the proposed charges, the impact on different customer classes, and the overall financial health and operational efficiency of the utility. The SCPSC’s decision-making is guided by principles of ensuring just and reasonable rates, preventing discrimination among customers, and promoting reliable utility service. In this scenario, the SCPSC’s approval is a prerequisite for the utility to lawfully implement the new rate structure. Without this approval, the utility cannot unilaterally impose the demand charge on its industrial customers. The Public Utility Regulatory Policies Act (PURPA) of 1978, while influencing utility regulation, does not grant utilities the authority to bypass state regulatory bodies for rate changes. Similarly, general business practices or internal company policies do not supersede the regulatory authority of the SCPSC. The Federal Energy Regulatory Commission (FERC) primarily regulates wholesale electricity sales and interstate transmission, not retail rate structures set by state commissions for intrastate utility operations.
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Question 27 of 30
27. Question
A residential customer in Greenville, South Carolina, wishes to install a 10-kilowatt rooftop solar photovoltaic system. The customer has submitted a complete interconnection application to the local electric utility, which has reviewed the system’s technical specifications. Under South Carolina’s regulatory framework for distributed generation, what is the primary responsibility of the electric utility upon receiving a compliant interconnection application for a system of this size, assuming no adverse impacts on the grid are identified during the initial review?
Correct
South Carolina law, specifically the South Carolina Public Service Commission (SCPSC) regulations and the South Carolina Energy Freedom Act (often referenced in discussions about renewable energy deployment and utility regulation), governs the integration of distributed generation resources into the state’s electricity grid. When a customer-generator proposes to connect a solar photovoltaic system to the utility’s distribution system, the utility must adhere to established interconnection standards and processes. These standards are designed to ensure the safety, reliability, and operational integrity of the grid. The SCPSC has promulgated rules, such as those found in R.16-154, which outline the technical requirements, application procedures, and cost responsibilities for interconnection. These rules often differentiate between small generator interconnection agreements (typically for systems under a certain capacity, often 2 MW) and larger ones. For systems below a specified threshold, simplified application processes and standardized agreements are usually employed, minimizing the administrative burden on both the customer and the utility. The utility’s responsibility includes reviewing the proposed interconnection to assess its impact on the local distribution system, ensuring compliance with national electric safety codes (like the National Electrical Code), and verifying that the system’s design meets established technical parameters for voltage, frequency, and protection. The customer-generator, in turn, is responsible for the cost of any necessary upgrades to the utility’s system that are solely attributable to the interconnection, as determined by the utility and subject to SCPSC oversight. The process aims to facilitate the safe and orderly addition of distributed energy resources while maintaining grid stability.
Incorrect
South Carolina law, specifically the South Carolina Public Service Commission (SCPSC) regulations and the South Carolina Energy Freedom Act (often referenced in discussions about renewable energy deployment and utility regulation), governs the integration of distributed generation resources into the state’s electricity grid. When a customer-generator proposes to connect a solar photovoltaic system to the utility’s distribution system, the utility must adhere to established interconnection standards and processes. These standards are designed to ensure the safety, reliability, and operational integrity of the grid. The SCPSC has promulgated rules, such as those found in R.16-154, which outline the technical requirements, application procedures, and cost responsibilities for interconnection. These rules often differentiate between small generator interconnection agreements (typically for systems under a certain capacity, often 2 MW) and larger ones. For systems below a specified threshold, simplified application processes and standardized agreements are usually employed, minimizing the administrative burden on both the customer and the utility. The utility’s responsibility includes reviewing the proposed interconnection to assess its impact on the local distribution system, ensuring compliance with national electric safety codes (like the National Electrical Code), and verifying that the system’s design meets established technical parameters for voltage, frequency, and protection. The customer-generator, in turn, is responsible for the cost of any necessary upgrades to the utility’s system that are solely attributable to the interconnection, as determined by the utility and subject to SCPSC oversight. The process aims to facilitate the safe and orderly addition of distributed energy resources while maintaining grid stability.
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Question 28 of 30
28. Question
In South Carolina, what is the primary regulatory framework governing the interconnection of a new 750 kilowatt solar photovoltaic system with the state’s electric distribution grid, and what key document formalizes the terms of this connection for the system owner and the utility?
Correct
The South Carolina Public Service Commission (SCPSC) has specific regulations regarding the interconnection of distributed generation (DG) systems with the electric grid. These regulations aim to ensure grid reliability, safety, and fair cost allocation. For systems up to 1 megawatt (MW), South Carolina law, particularly through the SCPSC’s Rules and Regulations, establishes a streamlined process often referred to as “small generator interconnection.” This process typically involves technical review and adherence to specific standards to ensure the DG system does not adversely impact the utility’s distribution system. The interconnection agreement is a crucial document outlining the terms and conditions under which the DG system can connect and operate in parallel with the grid. It covers aspects like technical requirements, safety procedures, and liability. The SCPSC’s oversight ensures that these agreements are consistent with state energy policy and public utility law, promoting the safe and effective integration of renewable and distributed energy resources. The commission’s authority extends to approving interconnection tariffs and resolving disputes that may arise between utilities and DG system owners.
Incorrect
The South Carolina Public Service Commission (SCPSC) has specific regulations regarding the interconnection of distributed generation (DG) systems with the electric grid. These regulations aim to ensure grid reliability, safety, and fair cost allocation. For systems up to 1 megawatt (MW), South Carolina law, particularly through the SCPSC’s Rules and Regulations, establishes a streamlined process often referred to as “small generator interconnection.” This process typically involves technical review and adherence to specific standards to ensure the DG system does not adversely impact the utility’s distribution system. The interconnection agreement is a crucial document outlining the terms and conditions under which the DG system can connect and operate in parallel with the grid. It covers aspects like technical requirements, safety procedures, and liability. The SCPSC’s oversight ensures that these agreements are consistent with state energy policy and public utility law, promoting the safe and effective integration of renewable and distributed energy resources. The commission’s authority extends to approving interconnection tariffs and resolving disputes that may arise between utilities and DG system owners.
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Question 29 of 30
29. Question
In South Carolina, when an electric cooperative seeks to implement a revised rate schedule impacting residential customers, what is the primary regulatory body responsible for approving or modifying such a proposal, and what is the foundational legal principle guiding its decision-making process regarding the reasonableness of the proposed rates?
Correct
The South Carolina Public Service Commission (SCPSC) regulates the rates, services, and practices of public utilities operating within the state, including electric cooperatives. When a utility proposes a change in its rate structure, it must file an application with the SCPSC. This application is subject to a thorough review process. The SCPSC has the authority to approve, deny, or modify the proposed rates. South Carolina Code Annotated Section 58-5-240 outlines the process for rate adjustments, requiring utilities to provide justification for any proposed changes. The commission’s decision-making process involves public hearings, expert testimony, and consideration of the utility’s cost of service, the impact on consumers, and the overall public interest. The statute also provides for a period of investigation by the commission before a final order is issued, ensuring that proposed rates are just and reasonable. The commission’s authority extends to setting new rates if existing ones are deemed insufficient or excessive.
Incorrect
The South Carolina Public Service Commission (SCPSC) regulates the rates, services, and practices of public utilities operating within the state, including electric cooperatives. When a utility proposes a change in its rate structure, it must file an application with the SCPSC. This application is subject to a thorough review process. The SCPSC has the authority to approve, deny, or modify the proposed rates. South Carolina Code Annotated Section 58-5-240 outlines the process for rate adjustments, requiring utilities to provide justification for any proposed changes. The commission’s decision-making process involves public hearings, expert testimony, and consideration of the utility’s cost of service, the impact on consumers, and the overall public interest. The statute also provides for a period of investigation by the commission before a final order is issued, ensuring that proposed rates are just and reasonable. The commission’s authority extends to setting new rates if existing ones are deemed insufficient or excessive.
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Question 30 of 30
30. Question
A regional electric cooperative operating solely within South Carolina proposes to restructure its commercial rate schedule to include a significant demand charge component, aiming to better align costs with high-usage customers. Following submission of the proposed tariff to the South Carolina Public Service Commission, what is the primary legal mechanism through which the Commission evaluates and determines the acceptability of this new rate structure, considering South Carolina’s regulatory framework for public utilities?
Correct
The South Carolina Public Service Commission (SCPSC) regulates the rates and services of public utilities, including electric cooperatives, within the state. When a utility proposes a change in its rate structure, such as implementing a demand charge for a specific customer class, it must file an application with the SCPSC. This application is subject to a formal review process, often involving public hearings, expert testimony, and the submission of detailed financial and operational data. The SCPSC’s decision on whether to approve, deny, or modify the proposed rate is guided by various legal standards and principles, including ensuring that rates are just, reasonable, and not unduly discriminatory. South Carolina Code of Laws Title 58, Chapter 3, specifically addresses the powers and duties of the Commission in regulating utilities. The Commission’s authority extends to approving or rejecting proposed rate schedules to ensure they meet statutory requirements and serve the public interest. The process involves scrutinizing the utility’s cost of service, revenue requirements, and the impact of the proposed rates on different customer classes. The Commission’s final order would detail its findings and the rationale for its decision, which can be appealed through the state’s judicial system.
Incorrect
The South Carolina Public Service Commission (SCPSC) regulates the rates and services of public utilities, including electric cooperatives, within the state. When a utility proposes a change in its rate structure, such as implementing a demand charge for a specific customer class, it must file an application with the SCPSC. This application is subject to a formal review process, often involving public hearings, expert testimony, and the submission of detailed financial and operational data. The SCPSC’s decision on whether to approve, deny, or modify the proposed rate is guided by various legal standards and principles, including ensuring that rates are just, reasonable, and not unduly discriminatory. South Carolina Code of Laws Title 58, Chapter 3, specifically addresses the powers and duties of the Commission in regulating utilities. The Commission’s authority extends to approving or rejecting proposed rate schedules to ensure they meet statutory requirements and serve the public interest. The process involves scrutinizing the utility’s cost of service, revenue requirements, and the impact of the proposed rates on different customer classes. The Commission’s final order would detail its findings and the rationale for its decision, which can be appealed through the state’s judicial system.