City of Rock Hill v. Public Service Com'n of South Carolina

• Decision Date: 03 February 1992
• Docket Number: No. 23632,23632
• Citation: 417 S.E.2d 562,308 S.C. 175
• Court: South Carolina Supreme Court
• Parties: , Util. L. Rep. P 26,185 The CITY OF ROCK HILL, Respondent, v. The PUBLIC SERVICE COMMISSION OF SOUTH CAROLINA and York Electric Cooperative, Inc., Appellants. . Heard

Page 562

417 S.E.2d 562

308 S.C. 175, Util. L. Rep. P 26,185

The CITY OF ROCK HILL, Respondent, v. The PUBLIC SERVICE COMMISSION OF SOUTH CAROLINA and York Electric Cooperative, Inc., Appellants.

No. 23632.

Supreme Court of South Carolina.

Heard Feb. 3, 1992.

Decided April 13, 1992.

Melvin B. McKeown, Jr. of Spratt, McKeown & Bradford, York and F. David Butler, of Public Service Com'n of South Carolina, Columbia, for appellants.

James M. Brailsford, III, Columbia and Emil W. Wald of Spencer & Spencer, Rock Hill, for respondent.

TOAL, Justice:

The issue presented in this appeal is whether the lower court erred in ordering the Public Service Commission ("Commission") to unassign an area which was previously assigned to York Electric Cooperative, Inc. ("York"), in order to allow the City of Rock Hill ("City") to provide service to the area. We find, under the facts presented in this case, the Commission could not be compelled by the lower court to unassign the area. Accordingly, we REVERSE and REMAND to Commission.

FACTS

The facts are not disputed. In 1957, the City purchased a large tract of land outside its city limits. The property was developed by the City as an industrial park and municipal airport. In 1972, the Commission assigned a portion of this property to York, while some of the City's property was left unassigned. In 1984, the City sold a parcel of the property assigned to York to Elastomeric Products, Inc. ("EPI").

EPI requested electric service from the City. The City extended its existing lines to serve EPI and continues to provide electric service at this time. In extending service to EPI, the City relied upon the industrial consumer choice exception to the Territorial Assignment Act. ¹ In 1986, this Court held in Newberry v. Public Service Commission, 287 S.C. 404, 339 S.E.2d 124 (1986), the industrial consumer choice exception was repealed by implication to the extent it applied to municipalities because under § 5-7-60, a municipality may provide electrical service outside its corporate limits only in areas unassigned by the Commission or with the consent of the assigned supplier. Newberry, at 407, 339 S.E.2d at 126. Thus, under Newberry, the City's service to the EPI premise is illegal and ultra vires. Id.

As a result, York brought an action before the Commission seeking an order enjoining the City from continuing to provide electric service to EPI. The City brought a separate action requesting the Commission "unassign" the EPI area so the City could continue to provide service. The actions were consolidated and heard by the Commission on June 25, 1986. In its order, the Commission denied the City's request to unassign the area and issued an injunction prohibiting the City from continuing to provide electrical service to EPI. The order was amended to allow the City to continue to provide service until a successor provider of electricity had extended its facilities to the EPI site.

The Commission's order was appealed to the Circuit Court. Before the appeal was heard, the City annexed the portion of the city-owned property which completely surrounds the EPI property. The EPI property, however, was not annexed pursuant to EPI's request. The Circuit Court remanded the case back to the Commission for further consideration in light of the annexation. The Commission reaffirmed its previous order. The City again appealed to the Circuit Court, which reversed the Commission's order finding that York could not serve the EPI plant without extending lines over city property. Accordingly, the lower court determined that the City's right to consent to the use of its street and public property granted by the South Carolina Constitution would be undermined by the Commission's refusal to unassign the area so that the City could continue to provide service. The Court remanded the case to the Commission for an order withdrawing the EPI property from the territory assigned to York. This appeal followed.

LAW/ANALYSIS

Article VIII, § 15 of the South Carolina Constitution provides:

No law shall be passed by the General Assembly granting the right to construct and operate in a public street or on public property a street or other railway, telegraph, telephone or electric plant, or to erect water, sewer or gas works for public use, or to lay mains for any purpose, or to use the streets for any other such facility, without first obtaining the consent of the governing body of the municipality in control of the streets or public places proposed to be occupied for any such or like purpose.

We have interpreted this provision in several cases. In City of Abbeville v. Aiken Elec. Co-op., Inc., 287 S.C. 361, 338 S.E.2d 831 (1985), we held that a municipality did not have the right to oust an existing electric supplier when the assigned area was subsequently annexed. However, we also determined that expansion by the use of any city street or public property by the supplier within the annexed area without the municipality's consent was prohibited. Id. In Blue Ridge Electric v. City of Seneca, 297 S.C. 283, 376 S.E.2d 514 (1989), the issue presented was whether a municipality could service new customers in an area assigned to another electrical supplier once the area was annexed into the city. We held that denying the municipalities the right to serve in the annexed areas would be tantamount to leaving the assigned supplier with an exclusive territorial right since the municipality would be faced with the choice of denying the property owners power or consenting to the assigned supplier's use of the streets and public ways for expansion of their service. As this would create an irreconcilable conflict between the Act 431 and municipality's rights under Article VIII § 15, we determined a municipality could not be enjoined from serving new customers within the annexed property.

In subsequent cases, this Court held the city's right to consent included the power...