Justia South Carolina Supreme Court Opinion Summaries

Daufuskie Island Utility Company (DIUC) again appealed decisions by the Public Service Commission (PSC) regarding DIUC's 2015 application for ratemaking. In the PSC's first two decisions, it granted only part of the 109% rate increase requested by DIUC. DIUC appealed both decisions, and both times, the South Carolina Supreme Court reversed and remanded to the PSC for further consideration. On the final remand, the parties entered a settlement agreement allowing DIUC to recover rates equivalent to the 109% rate increase it initially requested in 2015. However, the parties continued to disagree over the propriety of DIUC's additional request to retroactively recover the 109% rate increase from the date of the PSC's first order, rather than from the date of the PSC's acceptance of the settlement agreement. The PSC rejected DIUC's request for the "reparations surcharge," finding it would amount to impermissible retroactive ratemaking. The propriety of the reparations surcharge was the only matter at issue in this appeal. The Supreme Court found the General Assembly did not authorize the PSC to grant utilities relief via a reparations surcharge, and the PSC therefore correctly rejected DIUC's request. The Court found DIUC chose not to avail itself of South Carolina Code section 58-5-240(D)'s statutory remedy prior to this final appeal. Accordingly, the PSC's decision was affirmed and the Court "end[ed] this lengthy ratemaking process." View "Daufuskie v. SC Office of Regulatory Staff" on Justia Law

The issue presented for the South Carolina Supreme Court in this case involved two consolidated cross-appeals from the Public Service Commission's (PSC) determinations regarding ratemaking applications filed by Duke Energy Carolinas, LLC (DEC) and Duke Energy Progress, LLC (DEP) (collectively, Duke). Each Duke entity owned one coal-fired power plant in South Carolina and seven coal-fired power plants in North Carolina, for a total of sixteen affected plants. In their ratemaking applications, the two Duke entities sought recovery for expenses related to their plants in both states, with those costs shared proportionately between their North and South Carolina customers. The PSC allowed in part and disallowed in part the requested expenses. On appeal, Duke contended the PSC erred in disallowing: (1) environmental compliance costs associated with North Carolina law; (2) litigation costs incurred by Duke in defending itself from various lawsuits; and (3) carrying costs on specified deferred accounts. In the cross-appeal, the South Carolina Energy Users Committee (SCEUC) contended the PSC erred in allowing DEC recovery of costs associated with a now-abandoned nuclear project in Cherokee County because of the South Carolina General Assembly's repeal of the Base Load Review Act (BLRA). After review, the Supreme Court affirmed the PSC's decisions in full because its decisions were supported by substantial evidence in the record, were not arbitrary or capricious, and were not controlled by an error of law. View "Duke Energy Carolinas v. SC Office of Regulatory Staff" on Justia Law

The South Carolina Public Service Commission (PSC) was a quasi-judicial body established by the South Carolina General Assembly, to which the legislature delegated "power and jurisdiction to supervise and regulate the rates and service of every public utility in this State and to fix just and reasonable standards, classifications, regulations, practices, and measurements of service to be furnished, imposed, or observed, and followed by every public utility in this State." Part of this power includes the authority "to create incentives for utilities to improve their business practices." The PSC's order on appeal here was primarily focused on providing incentives to the utility to improve its business practices. Appellant, Blue Granite Water Co. (Blue Granite), was a utility that provided water and sewer services. Blue Granite was formerly known as Carolina Water Service (CWS). CWS changed its name to Blue Granite as part of a rebranding campaign, in part because the utility had earned an unfavorable reputation throughout the state. In rejecting Blue Granite's request for an approximate 50% rate increase, and in an effort to incentivize Blue Granite to improve its business practices, the PSC set a lower return on equity (ROE) than requested and allowed only certain portions of Blue Granite's requested costs, citing to the utility's known, poor reputation and service problems. On appeal, Blue Granite contended the PSC's attempts to incentivize the utility actually unfairly punished the company in violation of law. The South Carolina Supreme Court reversed in part and affirmed in part. As to the issues involving the ROE, storm costs, and bond, the Court found the PSC's decision was not unfairly punitive, not arbitrary or capricious, and not clearly erroneous. However, as to the Greenville office expenses, the Court found the PSC's decision to completely deny yearly rental expenses was arbitrary and capricious. The Court therefore remanded this case back to the PSC for additional proceedings. View "In re Application of Blue Granite" on Justia Law

At issue in this case was a Public Service Commission order setting rates an electric utility had to pay to solar and other qualifying renewable energy producers for electricity the utility will then sell to its customers. The South Carolina Supreme Court dismissed the appeal because two of the appellants lacked standing to appeal, and the appeal was moot as to the remaining appellant. View "SC Coastal Conservation League v. Dominion Energy" on Justia Law

An industrial park was built in an unincorporated area in Laurens County, South Carolina, between the City of Laurens (Laurens) and the City of Fountain Inn (Fountain Inn). Both municipalities provided natural gas service beyond their respective borders, and each sought to serve the industrial customers in the new industrial park. However, Laurens -through its subsidiary, the Laurens Commission of Public Works (LCPW) - claimed Fountain Inn could not compete for the industrial customers' business because LCPW had established a designated service area and therefore was the sole authorized natural gas provider to the industrial park. Fountain Inn believed the industrial park was not part of a designated service area, and thus LCPW did not have an exclusive right to provide natural gas to customers in the industrial park. In support of its claim, LCPW asserted it had satisfied the requirements of S.C. Code section 5-7-60 (2004) by providing natural gas in the general vicinity for twenty years pursuant to a 1992 boundary line that was informally agreed to by Laurens and Fountain Inn. Agreeing with LCPW that it had properly created a designated service area, the circuit court enjoined Fountain Inn from providing natural gas service to the industrial park, and the court of appeals affirmed. Because there was no reasonable interpretation of section 5-7-60 that would permit LCPW to claim a designated service area over the industrial park, the South Carolina Supreme Court reversed. View "Commissioners of Public Works v. City of Fountain Inn" on Justia Law

Daufuskie Island Utility Company, Inc. (DIUC) filed an application with the Public Service Commission for a rate increase for the water and sewer service it provides to residents of Daufuskie Island in Beaufort County. During a hearing on the merits of the application, the commission approved a purported settlement agreement between the Office of Regulatory Staff (ORS) and three property owners' associations: Haig Point Club and Community Association Inc., Melrose Property Owner's Association, Inc., and Bloody Point Property Owner's Association. DIUC appealed, and the South Carolina Supreme Court reversed, finding the agreement "was not a true settlement" because DIUC did not agree to it. The case was thereafter remanded the case to the commission for a new hearing on all issues. On remand, the commission held a second hearing on the merits and issued a second order. DIUC appealed the second order, arguing the commission erred in disallowing certain rate case expenses and refusing to include items of capital in DIUC's rate base. DIUC argued ORS and the commission applied a higher standard of scrutiny on remand in retaliation against DIUC for successfully seeking reversal of the commission's initial order. At oral argument on this second appeal, when pressed by the Court to respond to DIUC's "retaliation" argument, appellate counsel for ORS conceded a heightened standard had been employed. In reversing the Commission, the Supreme Court determined the arbitrary, higher standard of scrutiny affected substantial rights of DIUC. The commission's findings of fact and conclusions of law therefore had to be reversed. The matter was remanded again for a new hearing. View "Daufuskie Island v. SC Office of Regulatory Staff" on Justia Law

Petitioner Daufuskie Island Utility Company ("DIUC") appeals an order of the South Carolina Public Service Commission ("Commission") granting only thirty-nine percent of the additional revenue requested in its application. DIUC applied to the Commission for approval of a new rate schedule which would provide a 108.9% revenue increase. Due to the substantial increase in its tax liability and its inability to seek further revenue increases until July 2014, DIUC entered into an agreement with Beaufort County to pay the back taxes for years 2012, 2013, 2014, and the projected tax for 2015. Critical to this case was the ownership of an elevated water tank, well, water pump, system pipes, and other DIUC equipment located on a site which was sold at a tax sale in 2010 (“Elevated Tank Site”). Due to a clerical error, tax on the property was not paid, and DIUC did not discover the property had been sold until 2012. Although the tax deed purported to convey the property "all and singular . . . with the appurtenances," DIUC presented testimony from the Beaufort County Treasurer, Maria Walls, that the tax deed did not convey "the elevated water tank, the well, the water pump, system pipes, or other DIUC property located on the Elevated Tank[] Site." Despite providing no evidence to the contrary to support its recommendation, ORS proposed excluding the value of the utility equipment located on the property when calculating DIUC's rate base and property taxes. A hearing on the merits of DIUC's application was held in October 2015. The day before the hearing, several intervening property owner associations (POAs) filed a Settlement Agreement they had entered with ORS for the Commission's consideration. Pursuant to the Agreement, ORS and the POAs stipulated to each party's testimony and exhibits in the record, and the parties agreed to accept all of ORS's adjustments and recommendations, with the exception of the bad debt expense for which they agreed to adopt DIUC's proposal.5 At the hearing, DIUC objected to the admission of the Settlement Agreement, arguing it was irrelevant and prejudicial because it bolstered ORS's recommendations without providing any new or additional evidence to support them. Over DIUC's objection, the Commission admitted the Agreement, reasoning it was more probative than prejudicial. The South Carolina Supreme Court found the Commission erred in admitting evidence of the POA settlement; and the Commission’s findings and conclusions with respect to DIUC’s property taxes were not supported by substantial evidence. The Court remanded for a new hearing. View "Daufuskie Island v. Regulatory Staff" on Justia Law