Duke Power Co. v. Public Service Commission

Chandler, Justice:

The Public Service Commission (PSC) issued an Order holding that the City of Gaffney (City), a supplier of electricity, was not required to obtain a Certificate of Public Convenience and Necessity (Certificate) to extend its electric service beyond corporate limits. From an affirmance by the Circuit Court, Duke Power Company (Duke) and Broad River Electric Cooperative (Co-op) appeal.

We reverse.

FACTS AND BACKGROUND

In 1985 Hamricks, Inc. (Customer) constructed an industrial facility in the northeast quadrant of the Interstate 85 (1-85) — S. C. Highway 105 (Hwy. 105) intersection. The quadrant is approximately one mile west of the City limits in an area unassigned to any electric supplier.¹

In December 1985 Customer requested three-phase service from the City. Although it had no lines in the unassigned territory, the City did have in place a three-phase line terminating on Hwy. 105 approximately one-half mile from the facility. It met the request by extending this line.

City completed the extension without first obtaining a Certificate from PSC. Duke petitioned PSC for a Cease and Desist Order, contending that a Certificate was required by S. C. Code Ann. § 58-27-1230 (1976) (Statute). Co-op intervened and joined in the request for relief on the same ground.

PSC denied the Petitions, holding that a provision of the Statute negated the requirement of a Certificate.

ISSUE

The sole issue in this appeal is whether the City was required to obtain a Certificate prior to extending electric service to the Customer.

SCOPE OF REVIEW

This Court’s scope of review is governed by the Administrative Procedures Act, S. C. Code Ann. § l-23-380(g) (1986). We may not substitute our judgment for that of the fact-finding body “as to the weight of the evidence on questions of fact.” Accordingly, the decision of the PSC will not be overturned unless clearly erroneous in view of the substantial evidence on the whole record. See Palmetto Alliance, Inc. v. South Carolina Pub. Serv. Comm’n, 282 S. C. 430, 319 S. E. (2d) 695 (1984); City of Spartanburg v. Public Service Commission, 281 S. C. 223, 314 S. E. (2d) 599 (1984).

DISCUSSION

The Statute, with three exceptions, requires that a utility obtain a Certificate as a condition of constructing or extending electric service. City relies upon the third enumerated exception, subsection (c), which eliminates the Certificate requirement “for an extension into territory contiguous to that already occupied by it and not receiving similar service from another electrical utility.” [Emphasis supplied.]

As can be seen, this exception embraces a two-prong test. First, the territory into which the electric service will be extended must be contiguous to that already occupied by the extending utility. Second, the contiguous territory must not be receiving similar service from another utility.

From evidence presented at a hearing, PSC found that the City had satisfied both prongs; Duke and Co-op contend that City satisfied neither prong.

As to prong one of the statutory exemption, PSC found that the City’s electric facilities were contiguous to the territory in which the Customer is located, including the area north of 1-85 and west of the City limits. We agree that the record supports this finding.

As to prong two, however, the record contains no evidence to support the finding. The identical service requested by the Customer was already available from Duke in the unassigned, contiguous area. As shown on Exhibit 1, Duke’s three-phase line supplied electricity to Bommer Industries and Maranatha Church, both located in the contiguous territory.

PSC, nevertheless, concluded that prong two was satisfied because “the three-phase service required for the Customer’s operations was not then available from any ‘electric utility’ at a more proximate distance than the service available from the City.” [Emphasis supplied.] This determination constitutes an error of law. Under the Statute, “proximity” of similar service is not a factor. Rather, the similar service must not be provided anywhere in the contiguous territory by another utility.

Moreover, the PSC finding ignores uncontroverted evidence that Duke’s single-phase line, located in the Customer’s immediate vicinity, provided similar service within the contiguous territory. H. F. Crater, Jr., the City’s own Manager of Public Works, conceded this point when he testified:

Q. Mr. Crater, If I said that all three-phase lines and all single-phase lines are pretty much alike, would you agree with that?

A. Generically, I guess so, yes, sir.

Q. You would say that they are similar?

A. Yes, sir.

Q. Was similar service then being provided by Duke Power Company in the area of Hamricks, that Hamricks is using now?

A. Yes, sir. [Emphasis supplied.]

Indeed, Duke’s single-phase service referred to in Mr. Crater’s testimony was so close to the Customer’s premises that an access road could not be constructed without removal of three spans of these lines.

PSC’s finding as to the second prong of § 58-27-1230(c) is clearly erroneous. All the evidence of record patently demonstrates that, at the time of the Customer’s request for service, Duke, in addition to providing similar service, was providing the exact service in the contiguous territory. Accordingly, the City could not proceed without first obtaining a Certificate as required by the Statute.

Our decision here is consistent with that in City of Camden v. Public Service Comm’n, 283 S. C. 380, 323 S. E. (2d) 519 (1984), for the facts there are distinguishable. In City of Camden, no other utility was servicing the contiguous territory at the time the extension was made by the City. Therefore, unlike here, both prongs of § 58-27-1230(c) were satisfied.

CONCLUSION

The City, having failed to satisfy prong two of the statutory exemption, was proscribed from proceeding without a Certificate of Public Convenience and Necessity. As to whether the City is entitled to such a Certificate, we, of course, express no opinion.²

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Reversed.

Harwell, J., and Don S. Rushing, Acting J., concur. Finney and Toal, JJ., dissent in separate opinion.

1 A portion of Hearing Exhibit #1 (Exhibit 1) has been reproduced as an appendix for reference to pertinent landmarks.

2 The record contains extensive testimony concerning customer preference, duplication of service and relative costs of competing utilities, etc. While these matters may be relevant in PSC determination of the City’s entitlement to a Certificate, they have no bearing on the issue in this appeal.