Hilton Head Plantation Utilities, Inc. v. Public Service Com'n of South Carolina
| Decision Date | 08 December 1993 |
| Docket Number | No. 24010,24010 |
| Citation | 441 S.E.2d 321,312 S.C. 448 |
| Parties | , 152 P.U.R.4th 376 HILTON HEAD PLANTATION UTILITIES, INC., Appellant, v. The PUBLIC SERVICE COMMISSION OF SOUTH CAROLINA, Respondent. . Heard |
| Court | South Carolina Supreme Court |
Mitchell Willoughby, John M.S. Hoefer, and B. Craig Collins, all of Willoughby & Hoefer, Columbia, for appellant.
F. David Butler, of South Carolina Public Service Com'n, Columbia, for respondent.
Hilton Head Plantation Utilities, Inc. (the Utility) contends that The Public Service Commission of South Carolina's (Commission) denial of its request for a rate increase was clearly erroneous in view of the substantial evidence on the whole record. We disagree.
The Utility filed an application with the Commission seeking approval of an increased schedule of rates and charges for water and sewer services. The Commission's staff conducted an audit of the Utility's books and records and physically inspected its operations and facilities. A public hearing on the application was held before the Commission.
The Utility presented one witness who testified about its financial condition, its request for rate relief and explained the Utility's financial exhibits. Another witness testified about its operations.
The Commission presented testimony of its staff accountant, D. Joe Maready (Maready). Maready testified about the results of the audit he performed of the Utility's books and records and explained the accounting portions of the Commission's staff report. He did not challenge the reasonableness of any expenses for the test year.
Thereafter Richard C. Pilsbury (Pilsbury), President of the Property Owner's Association of Hilton Head Plantation, a protestant representing many consumer rate payers, called the Commission's attention to the fact that a substantial portion of the Utility's budget was paid to its corporate parent. He submitted that the expenses were questionable and in effect invited the Commission to take into account the fact that certain transactions might not have been conducted at arm's length.
The Commission, in its Order, said:
The Commission believes that Pilsbury's statement raises questions about seemingly less-than-arms-length transactions taking place between Hilton Head Plantation Utilities, Inc. and Hilton Head Plantation Limited Partnership. The Commission also believes that these expenses bring into question the entire amount of O & M expenses required by the Company as legitimate operation and maintenance expenses, which are passed on to their ratepayers, and the rates proposed by the Company to collect these monies. The Commission holds that the record before it fails to provide the answers to these questions.
In denying the request, the Commission further stated as follows:
Because of the above reasoning, the Commission believes that the proposed rates as submitted are unjust and unreasonable.
The Order of the Commission was appealed to the circuit court. That court refused to substitute its judgment for that of the Commission holding that there was substantial evidence warranting the Commission's refusal. It is from this Order of the circuit court that this appeal arises.
The Utility first argues that the Commission's Order did not set forth findings of fact and conclusions of law as required by South Carolina Code Ann. § 1-23-350 (1986). We disagree. We conclude, as did the circuit court, that the Utility's argument is without merit. The Commission's Order was sufficiently detailed to enable the circuit court and this Court to determine if the ruling was supported by the evidence and whether the law has been properly applied.
It is next contended that the evidence before the Commission was insufficient to support its decision to refuse the Utility's application for the rate increase sought. We disagree.
It is apparent that the Commission and the circuit court took a dim view of the fact that so much of the Utility's budget was paid to corporations and/or persons affiliated with the Utility itself. The burden of proof of the reasonableness of expenses incurred which entered into a rate increase request rests with the Utility. The...
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...a mere showing of actual payment does not establish a prima facie case of reasonableness. Hilton Head Plantation Utilities, Inc. v. Pub. Serv. Comm'n, 312 S.C. 448, 451, 441 S.E.2d 321, 323 (1994). The PSC must review and analyze intercompany dealings and determine if they are reasonable; i......
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...to respond in this case, we reverse and remand for further proceedings. Cf. Hilton Head Plantation Utilities, Inc. v. Public Service Comm'n of S.C., 312 S.C. 448, 449–52, 441 S.E.2d 321, 322–23 (1994) (after finding the PSC did not err in denying a rate increase based on the lack of evidenc......