Duke Power Co. v. PUBLIC SERVICE COM'N, 25241.

• Decision Date: 24 January 2001
• Docket Number: No. 25241.,25241.
• Citation: 541 S.E.2d 250,343 S.C. 554
• Parties: DUKE POWER COMPANY, n/k/a Duke Power, a division of Duke Energy Corporation, Appellant, v. The PUBLIC SERVICE COMMISSION OF SOUTH CAROLINA, and Blue Ridge Electric Cooperative, Inc., Respondents.
• Court: South Carolina Supreme Court

343 S.C. 554

541 S.E.2d 250

DUKE POWER COMPANY, n/k/a Duke Power, a division of Duke Energy Corporation, Appellant, v. The PUBLIC SERVICE COMMISSION OF SOUTH CAROLINA, and Blue Ridge Electric Cooperative, Inc., Respondents.

No. 25241.

Supreme Court of South Carolina.

Heard October 3, 2000.

Decided January 24, 2001.

Rehearing Denied February 21, 2001.

Richard L. Whitt, of Austin, Lewis & Rogers, of Columbia, and Jefferson D. Griffith, III, of Duke Power, of Charlotte, North Carolina, for appellant.

F. David Butler, of the Public Service Commission, and Steven W. Hamm and Mary Sowell League, of Richardson, Plowden, Carpenter & Robinson, all of Columbia, for respondents.

BURNETT, Justice:

This is an appeal from an order of the Circuit Court affirming the order of the Public Service Commission (Commission) ordering Duke Power Company n/k/a Duke Power, a division of Duke Energy Corporation (Duke) to cease and desist from attempting to provide power to the Nason Corporation (Nason), a new construction located within territory assigned to Blue Ridge Electric Cooperative, Inc. (Blue Ridge). We affirm.

FACTS

In April 1969, Duke constructed a 44kv power line that ran from Westminster to Walhalla. The line was built temporarily on a 100kv double circuit line and was named the Darby Line. That same year, the General Assembly enacted the Territorial Assignment Act (Act), S.C.Code Ann. § 58-27-610 through -670 (1976), effective July 1, 1969. The Act required the Commission to assign

beginning as soon as practicable after January 1, 1970, to electric suppliers, all areas, by adequately defined boundaries which may be by reference to boundaries drawn on maps or otherwise, that are outside the corporate limits of municipalities, and that are more than three hundred feet from the lines of all electric suppliers as such lines exist on the dates of the assignments; provided, that the Commission may leave unassigned any area in which the Commission, in its discretion, determines the absence of assignment is justified by public convenience and necessity.

§ 58-27-640. Pursuant to this section, Duke, Blue Ridge, and Haywood Electric Membership Corporation submitted to the Commission a joint application for the assignment of electric service areas in Oconee County. The application included a map of Oconee County (Exhibit A) designating areas to be assigned to the applicants and areas to be left unassigned. The Commission approved the application and incorporated the map into its order (1972 Order). The order was a form order used by the Commission statewide. It stated, in its entirety:

This matter comes before the Commission on Joint Application of Duke Power Company, Blue Ridge Electric Cooperative, Inc. and Haywood Electric Membership Corporation, under the provision of Section 24-15 of the Code of Laws of South Carolina for the assignment of electric service areas in Oconee County, South Carolina.

The verified Application and attached map, Exhibit A, indicate the areas in Oconee County to be assigned to each applicant and the areas to be left unassigned. The Commission is of the opinion, and so finds, that the approval of this Application is in the public interest and that each of the applicants is able to provide adequate service in the territory assigned NOW, THEREFORE, IT IS ORDERED, ADJUDGED AND DECREED that the Application is approved, and the areas in Oconee County situated more than three hundred (300') feet from the lines of any electric supplier and outside the corporate limits of any municipality are assigned to the respective applicants or designated unassigned, all as shown on Exhibit A incorporated herein by reference and made a part of this Order as fully as if set out herein.

Duke's Darby line ran through territory assigned to Blue Ridge.

In October 1973, Duke added a 100kv circuit to the existing towers and constructed a new 44kv line along the same right of way to replace the 44kv line that had been temporarily strung on the towers. This new line was named the Bear Swamp 44kv line. Poles for the Bear Swamp line have 1974 "birthmarks."¹ In 1981, Duke began serving its first and only customer off the Bear Swamp line pursuant to a statutory exception permitting out-of-territory service to industrial customers with an initial load greater than 750 kilowatts. See S.C.Code Ann. § 58-27-620(2) (1976).

In 1996, Nason decided to build a new plant in Oconee County and asked Duke to be its electrical supplier. Duke began constructing new underground lines with which to serve Nason, and Blue Ridge filed an Emergency Petition for Rule to Show Cause and Petition for Immediate Cease and Desist Order with the Commission. After a hearing on the merits, the Commission granted the requested cease and desist order against Duke. The Commission subsequently filed a second order denying Duke's motion to reconsider. Duke appealed to the Circuit Court, which affirmed the Commission's orders.

DISCUSSION

Did the Circuit Court err in affirming the Commission's finding Duke has no right to serve the customer in question?

Duke asks us to reverse the Commission's determination, affirmed by the Circuit Court, that it has no right to serve the Nason plant. We agree with the Circuit Court and Commission that Duke may not serve a customer located wholly within territory assigned to Blue Ridge.

This Court employs a deferential standard of review when reviewing a decision of the Public Service Commission and will affirm that decision when substantial evidence supports it. Porter v. South Carolina Public Service Comm'n, 333 S.C. 12, 507 S.E.2d 328 (1998). This Court may not substitute its judgment for the Commission's on questions about which there is room for a difference of intelligent opinion. Id. Because the Commission's findings are presumptively correct, the party challenging a Commission order bears the burden of convincingly proving the decision is clearly erroneous, or arbitrary or capricious, or an abuse of discretion, in view of the substantial evidence on the whole record. Id., S.C.Code Ann. § 1-23-380(A)(6) (Supp.1999).

Duke's reasons why it should be allowed to serve the customer in dispute are essentially twofold. First, Duke argues the statute permits Nason to choose its electric supplier under the circumstances present here. Second, Duke argues the 1972 Order creates a swath of unassigned territory around its Bear Swamp line. We address each of these arguments in turn.

A. The Statute

Duke asserts it has a right to serve Nason because the customer is located partially within three hundred feet of its Bear Swamp line, thus creating a customer choice situation pursuant to § 58-27-620(1)(d)(iii). This subsection provides that a customer located partially within three hundred feet of certain lines of an electric supplier and partially within a service area assigned to another electric supplier may choose its supplier.

We disagree this subsection applies to give Duke the right to serve Nason. In order for § 58-27-620(1)(d)(iii) to apply to Duke's Bear Swamp line, the line must meet certain criteria: it must have been in existence on July 1, 1969 and it must be a distribution line. § 58-27-610(3). In order for a 44kv line like Duke's Bear Swamp line to be a distribution line, the parties must agree it is such or the Commission must find the line's "primary purpose and use" is distribution. See § 58-27-610(3). The Commission determined Duke's Bear Swamp line is not a distribution line, but a transmission line, with no appurtenant service rights. There is abundant evidence in the record to support this determination, including the fact that the line was originally constructed as a transmission tie line, the original Darby 44kv line never served any customers, and the current Bear Swamp line has served only one customer in its history, pursuant to a specific statutory exception. Moreover, Duke's testimony reveals that in order to serve the Nason plant, a new distribution line would have to be built, a fact which suggests the Bear Swamp line is not, in fact, a distribution line.

Duke argues the Commission is without authority in this case to determine the nature of its line because the parties agreed the line was a protected distribution line when they drew it on the 1972 map. We find no evidence in the record to support Duke's assertion that mere depiction of the line has any significance as to its nature as a distribution or transmission line. On the contrary, the 1972 Order states that the map "indicate[s] the areas in Oconee County to be assigned to each applicant and the areas to be left unassigned" (emphasis...