Duke Power Co. v. South Carolina Public Service Com'n
| Decision Date | 16 October 1984 |
| Docket Number | No. 22211,22211 |
| Citation | 284 S.C. 81,326 S.E.2d 395 |
| Court | South Carolina Supreme Court |
| Parties | DUKE POWER COMPANY, Lewie E. Amick, Jr., Richard L. Wash and Mrs. Olan B. George, Appellants-Petitioners, of whom Duke Power Company is, Appellant-Respondent, v. SOUTH CAROLINA PUBLIC SERVICE COMMISSION, County of Greenwood, South Carolina, and Edward L. Petit, Jack C. Bourne and Jones F. Buchanan are, Respondents-Appellants, of whom County of Greenwood, South Carolina, Edward L. Petit, Jack C. Bourne and Jones F. Buchanan are, Respondents-Appellants. appeal of COUNTY of GREENWOOD, S.C., Edward L. Petit, Jack C. Bourne and Jones F. Buchanan, Respondents. . Heard |
Eugene C. Griffith, of Griffith, Mays, Foster & Kittrell, Newberry, for individual appellants-petitioners.
John E. Johnston, and Jack H. Tedards, Jr. of Leatherwood, Walker, Todd & Mann, Greenville, for respondents-appellants, Edward L. Petit, Jack C. Bourne, and Jones F. Buchanan.
Thomas E. McCutchen and Stewart P. Hayes of Whaley, McCutchen, Blanton & Rhodes, Columbia, for respondent-appellant Greenwood County.
Arthur G. Fusco and C. Dukes Scott, Columbia, for respondent-appellant South Carolina Public Service Comm.
This is a utility rate case involving the interpretation of a contract between Respondent Greenwood County and Appellant Duke Power Company and the constitutionality of the special enabling legislation. The trial judge held the contract enforceable against Duke and the Act constitutional. We affirm.
Greenwood County owned and operated a hydroelectric facility near Buzzard Roost on the Saluda River from 1940 until 1966. See Taylor v. Davenport, 281 S.C. 497, 316 Duke tendered an offer in a letter dated May 28, 1965. The offer provided generally that Duke would lease the hydroelectric facility at Buzzard Roost for forty years at $250,000 per year, and would purchase the remaining electric facilities owned by Greenwood County for about 13 million dollars. With regard to electric rates, Duke's offer specifically provided:
S.E.2d 389 (1984). In 1965, the Greenwood County Electric Power Commission recognized the need to increase its available supply of electric power in order to service the growing population of Greenwood County. A member of the South Carolina House from Greenwood County contacted Duke Power to determine whether Duke would be interested in purchasing the Greenwood system
... We now tender with this letter an offer which will:
* * *
E. Maintain the same, or lower, electric rates for all customers of the Greenwood Electric Systems.
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6. As to all customers other than municipalities and co-operatives, Duke Power Company systemwide rates will be applied to those Greenwood County customers whose bills would be lower on Duke rates. On those Greenwood customers whose bills would be higher on Duke rates, the Greenwood County rates will be left in effect. Thus, no customer will receive an increase in rates and 30% of the customers will receive reductions in rates, totaling about $41,000 annually. Duke rates would be applied to all new connections after consummation of the sale.
The statutes empowering Greenwood County to borrow funds to finance its electric system and creating the County Power Commission (Act No. 1095, 1934; Act No. 329, 1939) did not give the Commission power to sell the property. Therefore, the General Assembly enacted Act 1293 of 1966 for this purpose. Act 1293 provided for a referendum of Greenwood County voters to decide whether or not the system would be sold to Duke. The Act also provided, in pertinent part:
SECTION 4: The terms and conditions of the sale are as follows:
* * *
3. The rates to be charged for electric power for all connections which exist at the consummation of the sale shall be the lower of the rates charged by the Greenwood County Electric Power Commission and Duke Power Company and the same shall not be grounds for any claim alleging discrimination. The rates to be charged for electric power for connections after the date of the sale shall be the applicable rates of Duke Power Company. As used herein the word 'connections' shall be deemed to mean the physical connection of a residence or business establishment and shall have no reference to the person or business firm occupying the premises so connected, and the benefit of the lower rate shall continue although the person or firm occupying such premises may change from time to time.
The rate provisions in Act 1293 departed significantly from the terms of Duke's offer. The definition of "connections", contrary to Duke's usual practice, extended Duke's potential commitment to the special Greenwood rate by removing the possibility of attrition from the class due to change-overs in accounts. Duke agreed, however, to "live with" the alterations to its offer, and accepted the terms of the Act by letter dated March 4, 1966.
Act 1293 was approved by the Governor on March 11, 1966. An intense and highly emotional campaign then ensued in Greenwood County. The rate provisions of Duke's offer and the Act were emphasized to the voters. In a press release issued shortly before the referendum, a top Duke official stated:
The law provides that the rates to be charged county electric customers will be whichever is lower, the county rate or the Duke Power rate. We will abide by this law and Duke Power will assist in The referendum was held on April 12, 1966, and voters approved the sale by a margin of 4909 to 3211. The PSC approved Duke's application for a certificate of public convenience and necessity and for authority to lease and purchase the Greenwood facilities. Duke then applied for PSC approval of the special Greenwood rates. The PSC issued an order stating, in part:
defending to a successful conclusion any law suit brought by anyone contesting this provision ...
... WHEREAS, the Act providing for the referendum that authorized the sale of the electric system provided that after the transfer of the properties the lower of the Greenwood County or Duke Power Company rates would be used in billing the customers transferred from Greenwood to Duke.
NOW, THEREFORE, IT IS ORDERED, ADJUDGED AND DECREED That [the attached Greenwood rate schedules] ... are approved for billing those customers transferred from Greenwood County so long as bills under these rates are lower than bills under approved Duke Power Company rates ...
Duke, as a result, billed its Greenwood County customers under a dual rate structure for 15 years. It has transferred Greenwood rate customers to its system-wide rates whenever (1) bills under system-wide rates for a location became less than the Greenwood rates; (2) a location required a new physical connection; and (3) a location's electric demand increased to the point Duke deemed it a "new connection".
By 1981, the Duke rates had become 220% to 350% greater than the old Greenwood rates. Duke ratepayers, even in the same neighborhood, were charged 3 to 3 1/2 times the amount charged to Duke customers paying the Greenwood rate. Prior to this Action, some Duke ratepayers who had been lawfully transferred to the system-wide rates sued Duke. (Certain members of this class are individual appellants in this Action.) Duke then filed an application with the PSC for increased rates for the 3283 customers out of an original 9000 who were still paying the old rate. (Duke serves 15,158 customers in Greenwood County.) The PSC dismissed the application on the basis of Act 1293 of 1966.
Duke then brought this action in circuit court under Code §§ 1-23-380, 15-53-20, and 58-27-2310 for an order declaring that the PSC misconstrued Act 1293 and that the Act violated (1) the equal protection clauses of the U.S. and S.C. Constitutions; (2) Art. III, § 34 of the S.C. Constitution regarding special legislation; and (3) Code § 58-27-840 regarding discriminatory disparity in rates. The circuit court affirmed the PSC order, and we affirm.
Duke first asserts that its contract with the County should not be construed to perpetually freeze the old Greenwood rates and that the PSC retained jurisdiction to alter the contract's terms in the public interest. Code § 58-27-980. We disagree. Section 58-27-980 is overridden in this case by Act 1293. Laws giving specific treatment to a given situation take precedence over general laws on the subject, and later legislation takes precedence over earlier laws. See South Carolina Electric & Gas Co. v. South Carolina Public Service Authority, 215 S.C. 193, 54 S.E.2d 777 (1949). In addition, the legislature has power to regulate utility rates. Art. IX, § 1, S.C. Constitution. It has delegated certain authority to the PSC, Bookhart v. Central Electric Power Cooperative, Inc., 219 S.C. 414, 65 S.E.2d 781 (1951), but the General Assembly can withdraw PSC authority by subsequent acts. See Clarke v. South Carolina Public Service Authority, 177 S.C. 427, 181 S.E. 481 (1935). Act 1293 deprived the Commission of jurisdiction to set the original rates, to disturb the sale terms set by the General Assembly, or to determine that the rate differential resulted in unjust discrimination.
Furthermore, the record establishes that the parties to the contract did not intend that the Greenwood rates would Furthermore, Duke's conduct reveals that its own past interpretation of the agreement is consistent with that of the Court. Since 1966, Duke has recognized the dual rate structure in Greenwood County. In its many applications to the PSC for rate increases, Duke has not until the present action applied for a rate increase for the old Greenwood ratepayers.
remain in effect only for a limited time. When Duke entered into the contract, its officials believed that Duke rates would continue to decline rather...To continue reading
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