S.C. Elec. & Gas Co. v. Whitfield, Civil Action No.: 3:18-cv-01795-JMC
Decision Date | 26 July 2018 |
Docket Number | Civil Action No.: 3:18-cv-01795-JMC |
Court | U.S. District Court — District of South Carolina |
Parties | SOUTH CAROLINA ELECTRIC & GAS COMPANY, Plaintiff, v. Swain E. WHITFIELD, in his official capacity as Chairman of the South Carolina Public Service Commission; Comer H. Randall, in his official capacity as Commissioner of the South Carolina Public Service Commission; John E. Howard, in his official capacity as Commissioner of the South Carolina Public Service Commission; Elliott F. Elam, Jr., in his official capacity as Commissioner of the South Carolina Public Service Commission; Elizabeth B. Fleming, in her official capacity as Commissioner of the South Carolina Public Service Commission; Robert T. Bockman, in his official capacity as Commissioner of the South Carolina Public Service Commission; and G. O'Neal Hamilton, in his official capacity as Commissioner of the South Carolina Public Service Commission, Defendants. |
Benjamin Palmer Carlton, Steven J. Pugh, Richardson Plowden and Robinson, George Craig Johnson, IS Leevy Johnson, Johnson Toal and Battiste, Columbia, SC, Ashley C. Parrish, Pro Hac Vice, King and Spalding LLP, Washington, DC, Brandon R. Keel, David L. Balser, Jonathan R. Chally, Julia C. Barrett, Pro Hac Vice, King and Spalding, Atlanta, GA, for Plaintiff.
John M. Reagle, Thomas Kennedy Barlow, Childs and Halligan, Columbia, SC, for Defendants.
ORDER AND OPINION
Plaintiff South Carolina Electric and Gas Company ("SCE & G") brings this action pursuant to 42 U.S.C. § 1983 alleging constitutional claims against the following Defendants in their official capacities as Commissioners of the South Carolina Public Service Commission ("PSC"): Swain E. Whitfield, Comer H. Randall, John E. Howard, Elliot F. Elam, Jr., Elizabeth B. Fleming, Robert T. Bockman, and G. O'Neal Hamilton (collectively, "Defendants"). (ECF No. 1.) Specifically, SCE & G alleges that its rights under the Due Process Clause of the Fourteenth Amendment to the United States Constitution; the Bill of Attainder Clause of Article 1, § 10 of the United States Constitution; and the Takings Clause of the Fifth and Fourteenth Amendments to the United States Constitution were violated when the South Carolina General Assembly passed 2018 South Carolina Laws Act 287 (H.B. 4375) ("Act 287"1 ) and 2018 South Carolina Laws Resolution 285 (S. 0954) ("Resolution 285").2 (ECF No. 1 at 1 ¶ 2 & 42 ¶ 216–47 ¶ 258.)
This matter is before the court by way of Motions to Dismiss pursuant to Rules 12(b)(1) and 12(b)(6) filed by Defendants and by South Carolina House of Representatives Speaker Jay Lucas ("Speaker Lucas") and South Carolina Senate President Pro Tempore Hugh K. Leatherman, Sr. ("President Leatherman") (together "Intervenor Defendants").3 (ECF Nos. 48, 50, 52.) SCE & G has not yet responded to Defendants and Intervenor Defendants' Motions; however, as explained below, the pleading deficiencies in SCE & G's Complaint cannot be remedied by arguments of counsel. Therefore, in light of the expedited schedule in this case, the court exercises its discretion to decide the matter without awaiting SCE & G's response. See , e.g. , Planned Parenthood of Kan. v. Mosier , Case No. 16-2284-JAR-GLR, 2016 WL 3597457, at *1 (D. Kan. July 5, 2016) (, )rev'd , on other grounds, 882 F.3d 1205 (10th Cir. 2018). For the reasons stated below, the court GRANTS IN PART AND DENIES IN PART the Motions to Dismiss.
This case arises out of SCE & G's attempt to construct two nuclear reactors known as VC Summer Units 2 and 3 (the "Project") in Jenkinsville, South Carolina, and the South Carolina General Assembly's passage of Act 287 and Resolution 285. (E.g. , ECF No. 1 at 17 ¶¶ 81, 82 & 43 ¶ 220.) The purpose of the Project was to increase SCE & G's base load capacity,4 and enable it to meet the electricity demands of its South Carolina customers. (See ECF No. 1 at 6 ¶ 19, 13 ¶¶ 56–59.) SCE & G alleges that the incentive for the Project occurred as a result of the South Carolina General Assembly's passage of the Base Load Review Act, S.C. Code Ann. § 58-33-210 et seq . (2015 5
) ("BLRA"), which became "effective upon signature of the Governor on May 3, 2007."6 S.C. Code Ann. § 58-33-210.
The PSC is granted the power to regulate, oversee, and approve "electric rates that SCE & G charges to retail electric ratepayers, and prudency determinations of SCE & G's actions under the BLRA." (ECF No. 1 at 5 ¶ 15 ( ).) As a result, all rates charged by a utility in the state of South Carolina must be approved by the PSC. See S.C. Code Ann. §§ 58-27-820, -830. Prior to the passage of Act 287 and Resolution 285, South Carolina law provided two processes for utility rate changes. Pursuant to 2006 S.C. Acts 318 (codified in and modifying Title 58, S.C. Code Ann. §§ 58-27-860, -870, -920, -930, and -33-310), a public utility desiring to change its rates began the process by filing a schedule of its proposed rates with the PSC. S.C. Code Ann. § 58-27-860. The PSC then held a public hearing on the proposed rates and within six (6) months granted, modified, or denied the proposed rate schedule. S.C. Code Ann. § 58-27-870(A), (E). A utility was barred from filing another proposed rate schedule for twelve (12) months after the filing of a proposed rate schedule. S.C. Code Ann. § 58-27-870(E). However, under S.C. Code Ann. § 58-27-920, the PSC could sua sponte issue new rates, subject to certain procedural protections for utilities, see S.C. Code Ann. § 58-27-930. Any final order of the PSC was appealable to the Supreme Court of South Carolina or the South Carolina Court of Appeals. S.C. Code Ann. §§ 58-33-310, 58-27-2310.
Pursuant to the BLRA, a utility undertaking the construction of a base load review plant, as defined in S.C. Code Ann. § 58-33-220(2), could petition the PSC for permission to charge revised rates to recoup construction costs of the plant.
S.C. Code Ann. § 58-33-280. The utility could petition for revised rates yearly, S.C. Code Ann. § 58-33-280(A), and the PSC was required to issue an order granting, modifying, or denying the proposed rates within four (4) months of the request, S.C. Code Ann. § 58-33-280(E). These proceedings were subject to the same procedural rules as other rate proceedings, including the right to appeal. See S.C. Code Ann. § 58-33-240(A). Thus, SCE & G alleges that under the BLRA, it could construct the Project and "recover its capital costs related to the plant through revised rate filings or general rate proceedings." (ECF No. 1 at 11 ¶ 44 (quoting S.C. Code Ann. § 58-33-275(C).)
SCE & G alleges that on May 30, 2008, it filed a Combined Application for Certificate of Environmental Compatibility, Public Convenience and Necessity7 (the "Application") with the PSC, pursuant to the BLRA. (ECF No. 1 at 14 ¶ 63.) SCE & G sought approval for construction of the Project based on a projected cost of $6.3 billion. (Id. ¶ 64.) On March 2, 2009, the PSC approved SCE & G's Application to construct the Project finding that its construction "is reasonable and prudent." (See ECF No. 1-3 at 6 ¶ 11; see also ECF Nos. 1-1, 1-2.) Thereafter, SCE & G alleges that from 2008 through 2016, the PSC approved revised rates related to recovery for the capital costs of the Project amounting to $445 million annually. (See ECF Nos. 1-5 to 1-12.) In or around July 31, 2017, SCE & G alleges that it was forced by specified circumstances to reach a decision that it could not complete the Project and "announced that it would cease construction of the Units and request recovery of its abandoned costs, an outcome expressly contemplated by the BLRA."8 (ECF No. 1 at 30 ¶ 156.)
SCE & G alleges that on August 1, 2017, it filed with the PSC a Petition for Prudency Determination Regarding Abandonment, Amendments to the Construction Schedule, Capital Cost Schedule and Other Terms of the BLRA Orders for the V.C. Summer Units 2 & 3 and Related Matters to abandon construction of the Project (the "Petition"). (Id. at 31 ¶ 157.) In the Petition, SCE & G alleges that it asked the PSC to "enter an order finding that SCE & G's decision to abandon the construction of the [V.C. Summer] Units was reasonable and prudent" and "sought authorization to calculate revised rates reflecting SCE & G's incurred construction costs and costs of abandonment, pursuant to the BLRA." (Id. ¶¶ 158–159.) On August 15, 2017, SCE & G alleges that it voluntarily withdrew its Petition "after legislative leadership demanded more time for legislators to review the project and threatened to bring the South Carolina General Assembly back into a special session for the specific purpose of preventing SCE & G from recovering its abandoned costs." (Id. ¶¶ 162–163.) After it announced its abandonment of the Project, SCE & G alleges that numerous members of the South Carolina political community expressed the desire "to punish SCE & G for its decision to abandon the nuclear facilities." (Id. at 34 ¶ 172; see generally ECF No. 1 at 32 ¶ 166–35 ¶ 174.)
With the passage of Act 287 and Resolution 285, the South Carolina General Assembly modified the process for establishing and appealing utility rates. Act 287 instructed the PSC to set utility rates for SCE & G at a level equal to their current rates less the increases previously granted under the BLRA within five (5) days of the passage of the Act. 2018 S.C. Acts ...
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