H.4950 Prudency Budget Amendment (Adoption)
Rep. James Smith (D-Columbia) introduced a “prudency” amendment to the House budget (amendment 38a) in order to provide a second vehicle to ensure this critical legal concept is codified this legislative session (note that H.4375 also addresses this concept).
This amendment defines imprudence and prudence in regard to utility contracts and cost decisions – establishing a clear standard or test for which expenses will be deemed “prudent” and therefore may be included in rates charged to customers. For example, many have argued that expenses on the VC Summer project were not prudent and, therefore, these costs should not be passed on to ratepayers. The Base Load Review Act, however, extended near permanent prudency to all VC Summer related costs.
This budget amendment, if adopted, will help to avoid another VC Summer nuclear debacle and moves SC away from the utility-friendly system that was created with the misguided passage of the BLRA in 2007. The BLRA was pushed through the legislature in 2007 to allow utilities to charge ratepayers for nuclear generation projects before they were completed. The law set up a system that guaranteed a rate of return for the utilities and put ratepayers at risk for a failed project.
- This is a Pro-Conservation Amendment to the Budget.
- The Pro-Conservation Vote was YES for adoption of the amendment
- The Amendment was adopted by the House on 5/2/18, but failed to make it in the final version of the budget.