DocketNumber: Civil Action No.: 3:18-cv-01795-JMC
Citation Numbers: 333 F. Supp. 3d 552
Judges: Childs
Filed Date: 8/6/2018
Status: Precedential
Modified Date: 7/25/2022
Plaintiff South Carolina Electric & Gas Company ("SCE & G") brings this action pursuant to
This matter is before the court on SCE & G's Motion for Preliminary Injunction (ECF No. 5), which is opposed by Defendants and by South Carolina House of Representatives Speaker Jay Lucas ("Speaker Lucas"), South Carolina Senate President Pro Tempore Hugh K. Leatherman, Sr. ("President Leatherman") (together, "Intervenor Defendants"), and South Carolina Attorney General Alan Wilson ("Attorney General Wilson").
I. JURISDICTION
1. The court has jurisdiction under
2. Additionally, the court has determined that its exercise of jurisdiction is not constrained by application of the Johnson Act,
II. FINDINGS OF FACT RELEVANT TO PENDING MOTION
3. This case arises out of SCE & G's abandonment of the construction of two nuclear reactors known as V.C. Summer Units 2 and 3 (the "Project") in Jenkinsville, South Carolina, and the South Carolina General Assembly's passage of Act 287 and Resolution 285. (E.g. , ECF No. 68 at 1-2.)
4. The purpose of the Project was to increase SCE & G's base load capacity and enable it to meet the electricity demands of its South Carolina customers.
5. SCE & G's incentive for the Project occurred as a result of the South Carolina *559General Assembly's passage of the Base Load Review Act,
6. The PSC is "vested with power and jurisdiction to supervise and regulate the rates and service of every public utility in this State and to fix just and reasonable standards, classifications, regulations, practices, and measurements of service to be furnished, imposed, or observed, and followed by every public utility in this State."
7. On May 30, 2008, SCE & G filed a Combined Application for Certificate of Environmental Compatibility, Public Convenience and Necessity
8. On March 2, 2009, the PSC approved SCE & G's Application to construct the Project finding that its construction "is reasonable and prudent." (See ECF No. 68-3 at 6 ¶ 11; see also ECF Nos. 68-1, 68-2.)
9. SCE & G began construction on the Project. (ECF No. 68 at 20 ¶ 96.)
10. On nine occasions between 2008 and 2016, the PSC approved SCE & G's revised-rate requests, permitting it to recover for the capital costs of the Project amounting to $445 million annually. (ECF Nos. 68-6 to 68-14.
11. As of September 30, 2017, SCE & G has invested approximately $5 billion on the Project and $316 million in transmission costs related to delivery facilities. (ECF No. 99 at 14:16-23; ECF No. 68 at 26 ¶ 124.)
*56012. Ratepayers have paid to SCE & G roughly $2 billion in revised rates for financing the Project. (ECF No. 99 at 61:10-15.)
13. On July 31, 2017, SCE & G "announced that it would cease construction of the [Project's] Units and request recovery of its abandoned costs, an outcome expressly contemplated by the BLRA." (ECF No. 68 at 31-32 ¶ 158.)
14. On August 1, 2017, SCE & G filed a Petition for Prudency Determination Regarding Abandonment, Amendments to the Construction Schedule, Capital Cost Schedule and Other Terms of the BLRA Orders for the V.C. Summer Units 2 & 3 and Related Matters (the "Petition") with the PSC to abandon construction of the Project. (ECF No. 68 at 32 ¶ 159.) In the Petition, SCE & G alleges that it asked the PSC to "enter an order finding that SCE & G's decision to abandon the construction of the [V.C. Summer] Units was reasonable and prudent" and "sought authorization to calculate revised rates reflecting SCE & G's incurred construction costs and costs of abandonment, pursuant to the BLRA." (Id. ¶¶ 160-61.)
15. On August 9, 2017, the South Carolina Office of Regulatory Staff ("ORS") moved to dismiss SCE & G's Petition. (Id. ¶ 162.)
16. SCE & G contends that it voluntarily withdrew its Petition on August 15, 2017, "after legislative leadership demanded more time for legislators to review the project and threatened to bring the South Carolina General Assembly back into a special session for the specific purpose of preventing SCE & G from recovering its abandoned costs." (Id. ¶¶ 164-165.)
17. On January 12, 2018, SCE & G and Dominion Energy, Inc., filed a Joint Application and Petition ("Joint Petition"), PSC Docket 2017-370-E, with the PSC for review and approval of the merger between SCE & G and Dominion. (ECF No. 31-1.) In the Joint Petition, SCE & G requested that the PSC permit SCE & G to recover up to $5 billion from ratepayers over the next 20 years for the abandoned Project. (Id. at 51-52.)
18. SCE & G alleges that in response to the Project's abandonment, the South Carolina General Assembly passed Act 287 and Resolution 285. (ECF No. 68 at 36 ¶ 177.) Act 287 became law on June 28, 2018, and Resolution 285 became law on July 2, 2018. Act 287 instructs the PSC to set utility rates for SCE & G at a level equal to their current rates less the increases previously granted under the BLRA within five (5) days of the passage of the Act.
19. Additionally, Resolution 285 prohibited the PSC from holding a hearing on the pending dockets
20. Both the Act and the Resolution repealed any sections of law in conflict with their operation.
21. Act 287 also repealed the BLRA for any future projects and provided definitions for prudency, imprudency, and fraud.
22. On June 29, 2018, SCE & G filed its Verified Complaint for Declaratory Judgment and Temporary, Preliminary, and Permanent Injunctive Relief against Defendants pursuant to
23. On July 2, 2018, SCE & G moved for a preliminary injunction based on its constitutional claims. (ECF No. 5.) SCE & G seeks relief from the alleged unconstitutional legislative enactment of Act 287 and Resolution 285. More specifically, SCE & G seeks to enjoin Defendants from future implementation of Act 287 and Resolution 285. SCE & G does not seek to enjoin any PSC orders regarding SCE & G's project construction, capital cost schedules, or rate increases.
24. On July 2, 2018, SCE & G sent the PSC a letter informing it that SCE & G had filed the instant Motion for Preliminary Injunction and requesting that the PSC consent to the injunction. (ECF No. 94-36.)
25. On July 2, 2018, the PSC issued Order No. 2018-459 (ordered by Defendants Elam, Ervin, Hamilton, Howard, Randall, and Whitfield) directing SCE & G to calculate a reduction in its retail electric rates and tariffs by approximately 15% and to submit full tariff sheet summaries. (ECF No. 94-37.)
26. On July 3, 2018, SCE & G sent the PSC a letter and attached the requested tariff sheet summaries. (ECF No. 94-40.)
27. On July 3, 2018, the PSC issued Order No. 2018-460 (ordered by Defendants Elam, Ervin, Hamilton, Howard, Randall, and Whitfield), setting an experimental rate requiring SCE & G to reduce its electric rates as required by Act 287. (See ECF No. 33-4.) The PSC's July 3, 2018 Order directs SCE & G to begin implementing the experimental rate in the first billing cycle in August, which begins on August 7, 2018. (ECF No. 33-4; ECF No. 9 at 2.) The experimental rate is a monthly reduction of 14.8% for SCE & G's customers. (ECF No. 99 at 91:5-9.)
28. Act 287's requirement of an experimental rate, effective from April 1, 2018, forces SCE & G to (1) "refund" to customers $120 million collected from April to August 2018, and (2) lose approximately *562$30 million per month until the PSC's final decision on the abandonment proceedings. (Id. at 16:16-22, 17:5-16.)
29. On July 16, 2018, Defendants filed opposition to SCE & G's Motion for Preliminary Injunction. (ECF No. 31.)
30. On July 20, 2018, Defendants and Intervenor Defendants filed Motions to Dismiss pursuant to Rule 12(b)(1) and (b)(6) of the Federal Rules of Civil Procedure. (ECF Nos. 48, 50, 52.)
31. On July 23, 2018, Attorney General Wilson filed an Amicus Brief opposing SCE & G's Motion for Preliminary Injunction.
32. On July 25, 2018, Intervenor Defendants filed opposition to the instant Motion for Preliminary Injunction. (ECF Nos. 59, 61.)
33. On July 26, 2018, the court granted in part and denied in part the Motions to Dismiss, dismissed the Complaint, and granted SCE & G leave to file an amended complaint until July 27, 2018. (ECF No. 67.)
34. On July 27, 2018, SCE & G filed a Verified Amended Complaint, renewing its request that the court: (1) "Enter a declaratory judgment declaring Act 287 and Resolution 285 are unconstitutional in that they constitute an unlawful taking; violate the substantive and procedural components of the Due Process Clause, and constitute an unlawful bill of attainder"; and (2) "Enter a temporary, preliminary and permanent injunction directing the Chairman and Commissioners of the PSC, and their officers, agents, servants, employees, and attorneys, and any other persons who are in active concert or participation with them, to refrain from implementing Act [287] and Joint Resolution [285]." (ECF No. 68 at 53.)
35. On July 28, 2018, Defendants and Intervenor Defendants filed renewed Motions to Dismiss pursuant to Rules 12(b)(1) and (b)(6). (ECF Nos. 76, 77, 78.)
36. On July 30, 2018, SCE & G filed a Memorandum in Opposition to Defendants and Intervenor Defendants' Motions to Dismiss. (ECF No. 91.)
37. The court heard the parties' arguments regarding the Preliminary Injunction and renewed Motions to Dismiss during a hearing on July 30-31, 2018. (ECF Nos. 92, 95.)
38. On August 1, 2018, SCE & G filed a Reply to the Opposition Briefs to its Motion for Preliminary Injunction. (ECF No. 96.)
39. On August 2, 2018, the court denied the renewed Motions to Dismiss. (ECF No. 97.)
40. As discussed below, upon review of the extensive briefing on the instant Motion and hearing the parties' detailed arguments, the court finds that the legal issues in dispute weigh against granting SCE & G the requested relief. The parties' positions are discussed in greater detail below in the context of SCE & G's specific allegations.
III. LEGAL STANDARD AND ANALYSIS
A. Preliminary Injunctions Generally
41. The court's authority to issue a preliminary injunction arises from Rule 65, but "it is an extraordinary remedy never awarded as of right." Winter v. Nat'l Res. Def. Council, Inc. ,
42. The Fourth Circuit no longer recognizes a "flexible interplay among the four criteria for a preliminary injunction." Real Truth ,
43. "The traditional purpose of a preliminary injunction is to protect the status quo and to prevent irreparable harm during the pendency of the lawsuit ultimately to preserve the court's ability to render a meaningful judgment on the merits." De La Fuente ,
B. SCE & G's Request for Relief
44. SCE & G seeks a preliminary injunction that: (a) stays the effect of Act 287 and Resolution 285; and (b) enjoins Defendants from instituting or implementing any of Act 287 and Resolution 285's provisions, "including its mandated retail electric rate reduction and refund provisions, until further order of the Court."
C. The Court's Review
45. In support of its Motion for Preliminary Injunction, SCE & G relies on its Memorandum of Law (ECF No. 5-1), Reply Memorandum (ECF No. 96), the PSC's June 28, 2018 notice of special commission business meeting, and the Declaration of Iris N. Griffin (ECF No. 5-3), SCE & G's Senior Vice President and Chief Financial Officer and Treasurer.
46. In opposition to the Motion for Preliminary Injunction, Defendants rely on their Memorandum of Law (ECF No. 31), a Joint Application and Petition by SCE & G and Dominion Energy, Inc., for review and approval of their merger (ECF No. 31-1), a September 26, 2017 Petition for rate relief filed by the ORS with the PSC (ECF No. 31-2), and the PSC's July 5, 2018 hearing officer directive (ECF No. 31-3).
47. In opposition to the Motion for Preliminary Injunction, President Leatherman relies on his Memorandum of Law (ECF No. 59).
48. In opposition to the Motion for Preliminary Injunction, Speaker Lucas relies on his Memorandum of Law (ECF No. 61).
49. In opposition to the Motion for Preliminary Injunction, Attorney General Wilson relies on his Amicus Brief (ECF No. 54) and his Supplement to the Amicus Brief. (ECF No. 85.)
50. The court heard testimony from various witnesses and oral argument from the parties' counsel on July 30 to July 31, 2018. (ECF Nos. 92, 95.)
51. The parties make a plethora of arguments regarding the meritorious value of SCE & G's claims. This court finds that SCE & G has not met its burden under the standard the Supreme Court set out in Winter . Because SCE & G cannot show that all elements required for injunctive relief are met, the court refuses to grant injunctive relief to SCE & G. The court addresses below the vitality of SCE & G's assertions under the requirements set forth in Winter and reiterated by the Fourth Circuit in Real Truth.
*564IV. SPECIFIC FINDINGS AND CONCLUSIONS
A. Clear Showing of Likely Success on the Merits
52. "[P]laintiffs seeking preliminary injunctions must demonstrate that they are likely to succeed on the merits." Pashby v. Delia ,
i. SCE & G Cannot Establish a Clear Showing of Likely Success as to the Merits of Its Claim for an Unconstitutional Taking Based on a Redefinition of Property Rights and/or a Confiscatory Rate.
53. SCE & G asserts that Act 287 and Resolution 285 violate the Takings Clause of the Fifth Amendment because they confiscate SCE & G's property by cutting its rates to "confiscatory levels." (ECF No. 5-1 at 4; see also ECF No. 68 at 48 ¶¶ 251-52.) More specifically, SCE & G asserts that Act 287 and Resolution 285 (1) "set[ ] a confiscatory rate that prevents SCE & G from earning enough revenue for its capital costs and, in fact, 'jeapordize[s]' SCE & G's 'financial integrity,' " (2) "prohibit[ ] SCE & G from recovering a reasonable return on its investment, takes away SCE & G's ability to charge rates sufficient to recover amounts spent in reliance on the BLRA, would allow Dominion Energy to back out of a company-sustaining merger, and jeopardizes SCE & G's ability to access capital to fund short-term operations," (3) "make[ ] no attempt to determine the effect of the experimental rate on SCE & G," and (4) "mandate[ ] an arbitrary experimental rate and authorizes the PSC to adjust the rate, only if and when the PSC in its sole discretion deems it necessary." (ECF No. 5-1 at 18.)
54. Both the United States Constitution and South Carolina Constitution prohibit the government from taking property without just compensation. U.S. Const. amends. V, XIV ;
55. "The Fifth Amendment does not proscribe the taking of property; it proscribes taking without just compensation." Williamson Cty. Reg'l Planning Comm'n v. Hamilton Bank ,
*56556. "A public utility is entitled to such rates as will permit it to earn a return on the value of the property which it employs for the convenience of the public equal to that generally being made at the same time and in the same general part of the country on investments in other business undertakings which are attended by corresponding, risks and uncertainties; but it has no constitutional right to profits such as are realized or anticipated in highly profitable enterprises or speculative ventures." Bluefield Waterworks & Improvement Co. v. Pub. Serv. Comm'n of W. Va. ,
57. A utility is only allowed "just and reasonable" rates that strike a balance between investors and ratepayers. Permian Basin Area Rate Cases ,
58. The United States Constitution expressly "protects utilities from being limited to a charge for their property serving the public which is so 'unjust' as to be confiscatory." Duquesne Light Co. v. Barasch ,
59. However, "a regulatory taking claim against a state is not ripe until (1) the state agency imposing the allegedly confiscatory regulation has taken final action against the plaintiff's property and (2) the plaintiff has pursued all available remedies under state law."
*566U.S. W. Commc'ns v. MFS Intelenet, Inc. ,
60. Upon review, the court observes that neither Act 287 nor Resolution 285 sets the specific experimental rate that SCE & G alleges constitutes a taking. Act 287 did instruct Defendants to exercise their authority and "provide an experimental rate that customers ... shall pay during the pendency of litigation currently before the commission...."
61. Because of the foregoing, SCE & G is unable to satisfy the first Williamson County prong since the court has already concluded that Defendants have not taken final action against SCE & G's alleged property by implementing a rate that is confiscatory. (ECF No. 67 at 19, 22.)
62. The court further observes that even if it found that SCE & G satisfied *567the first Williamson County prong, it is unable to satisfy the second prong showing that it was denied just compensation because there is not any evidence in the record that SCE & G pursued to completion an inverse condemnation action in state court.
63. Because SCE & G has failed to meet either prong of the test articulated in Williamson County , which requires final action by the state against the property owner, SCE & G cannot show a likelihood of success on the merits at this time on its claim asserting the seizing of its property by cutting rates to "confiscatory levels" in violation of the Takings Clause.
ii. SCE & G Cannot Establish a Clear Showing of Likely Success as to the Merits of Its Claim Alleging a Violation of Substantive and Procedural Due Process.
64. The Fourteenth Amendment prohibits states from depriving a person of property without substantive and procedural due process. U.S. Const. amend. XIV.
65. To succeed on a substantive due process claim, SCE & G must show "(1) that [it] had property or a property interest; (2) that the state deprived [it] of this property or property interest; and (3) that the state's action falls so far beyond the outer limits of legitimate governmental action that no process could cure the deficiency." Quinn v. Bd. of Cty. Comm'rs for Queen Anne's Cty., Md. ,
66. To succeed on a procedural due process claim, SCE & G must show (1) "[it] ha[s] a constitutionally cognizable life, liberty, or property interest," Sansotta ,
67. SCE & G cannot establish it is likely to prevail on the merits of its due process challenges because SCE & G has not shown at this time it clearly has a property interest in revised rates under the BLRA.
68. The Constitution does not create property interests. Bd. of Regents v. Roth ,
69. Under South Carolina law, "[t]o determine if the expectation of entitlement is sufficient 'will depend largely upon the extent to which the statute contains mandatory language that restricts the discretion of the [agency]....' " Grimsley v. S.C. Law Enf't Div. ,
70. SCE & G posits the South Carolina Supreme Court "has held that a law that guarantees a person a future payment creates a cognizable property interest in that payment." (ECF No. 5-1 at 18 (citing Grimsley ).)
71. Additionally, SCE & G asserts the BLRA, in two of its subsections, contains mandatory language "entitl[ing] SCE & G to collect rate payments so as to recover its prudently incurred capital costs related to the nuclear facility construction and the cost of that capital." (ECF No. 5-1 at 20.)
72. SCE & G first points to
73. Under
74. The phrase "so long as" is "not purely [a] temporal construction[ ]; more often than not, [it] express[es] a condition rather than a time limit." Bryan A. Garner, Garner's Dictionary of Legal Usage 82 (3d ed. 2011). See also Moro v. State ,
75. Because, under
76. Accordingly,
77. The court understands there to be three different rate periods at issue. This first period is the time during which SCE & G was either constructing or otherwise abandoning the Project and charging ratepayers the revised rates approved by the nine base load review orders of the PSC. The second rate period is the time during which SCE & G was no longer constructing the Project but continued to charge the revised rates. The third time period will be governed by the outcome of the abandonment proceedings currently ongoing before the PSC, as the PSC must determine when SCE & G was either no longer constructing the Project or otherwise abandoning the Project and whether SCE & G's decision to abandon was prudent, entitling SCE & G to continue to recover the capital costs of the Project. See
78. The period during which
79. Similarly, the language in
80. Accordingly, in the event of abandonment after a base load review order approving rate recovery has been issued, the capital costs "shall nonetheless be recoverable ... provided that " the utility can prove the greater weight of the evidence shows the decision to abandon the plant was prudent.
81. The mandatory language "shall nonetheless be recoverable" does not significantly restrict the discretion of the PSC because it can deny a utility recovery of its capital costs if the PSC determines the utility did not establish by a preponderance of the evidence that the utility's decision to abandon was prudent. See also
82. Accordingly, SCE & G has not clearly shown that
83. Furthermore, no section of the BLRA limits the power of the South Carolina General Assembly to regulate utility rates. See Doyle ,
84. Even though the South Carolina General Assembly has entrusted the PSC with rate-making power, this grant of power is still subordinate to the General Assembly's rate-making authority. See Duquesne ,
*571Piedmont & N. Ry. Co. v. Scott ,
85. Based on the foregoing, SCE & G's expectation of entitlement under
86. To the extent
87. The phrase "so long as" in
88. SCE & G's abandonment of the Project, (ECF No. 5-1 at 7-8), means SCE & G is no longer performing the conditions necessary to retain any alleged property right under
89. To the extent
90. SCE & G cannot claim an entitlement under
91. Moreover the South Carolina General Assembly can likely extinguish property interests it has created if the conditions on which those interests depend are not met. See United States v. Locke ,
92. Upon SCE & G's abandonment of the Project, and thus failure to perform the necessary statutory conditions defined under
93. Thus, because SCE & G has not shown it has a property interest under the BLRA, it has failed to establish a clear showing of likely success as to the merits of its claim for substantive and procedural due process.
iii. SCE & G Cannot Establish a Clear Showing of Likely Success as to the Merits of Its Claim for a Bill of Attainder.
94. The United States Constitution prohibits states from enacting "bills of attainder." U.S. Const. art. 1, § 10.
95. A statute is an unconstitutional bill of attainder if it "determines guilt and inflicts punishment upon an identifiable individual without provision of the protections of a judicial trial." Nixon v. Admin. of Gen. Servs. ,
96. A law may not be directed at "an identifiable individual," Nixon ,
97. In Nixon , the law in question addressed policies for the storage of presidential papers. Nixon ,
*573Nixon ,
98. Section 3 of Act 287, the portion addressing the creation and implementation of the experimental rate, identifies a single utility and changes only that utility's rates. See
99. However, SCE & G constitutes a legitimate class of one because SCE & G is the only utility to avail itself of the BLRA and recover capital costs from a base load project, see South Carolina Office of Regulatory Staff, Historical Electric Residential Bills (listing SCE & G as the only utility to receive a rate increase from the BLRA since its enactment in 2007), http://www.regulatorystaff.sc.gov/electric/Pages/RateAdjustments.aspx (last visited Aug. 3, 2018).
100. Similar to Nixon , Act 287 contains both a general policy decision and a solution to a unique set of facts existing at the time of the law's passage. In Nixon , Congress decided to review the policies affecting the storage of all presidential papers-that is, to establish a general policy. Nixon ,
101. Thus, while Act 287 does specify an individual affected by the law, that individual constitutes a legitimate class of one.
102. Moreover, even if Act 287 does impermissibly target SCE & G, SCE & G has not established a clear showing that the legislation is punitive.
103. When considering whether legislative enactment is punitive, courts consider "(1) whether the challenged statute falls within the historical meaning of legislative punishment; (2) whether the statute, 'viewed in terms of the type and severity of burdens imposed, reasonably can be said to further nonpunitive legislative purposes'; and (3) whether the legislative *574records 'evinces a [legislative] intent to punish.' " Selective Serv. ,
104. Traditionally, bills of attainder occurred when legislative power was used to (1) sentence "a named individual or identifiable members of a group to death," (2) imprison, banish, and punitively confiscate one's property by the sovereign"; or (3) bar "designated individuals or groups from participation in specified employments or vocations." Nixon ,
105. The Supreme Court has also applied a functional approach "analyzing whether the law under challenge, viewed in terms of the type and severity of burdens imposed, reasonably can be said to further nonpunitive legislative purposes." Nixon ,
106. In Act 287, the South Carolina General Assembly states that its purpose is "to set certain utility rates for the purpose of protecting the public interest until a determination can be made by the appropriate regulatory and judicial authorities."
107. SCE & G relies on Consolidated Edison to stand for the proposition that "eliminating harm to innocent third parties is a purpose consistent with punishment,"
108. In this case, the South Carolina General Assembly made no determination in Act 287 about the prudency of SCE & G's actions, instead leaving that determination to the PSC. See
109. The "third recognized test of punishment is strictly a motivational one: inquiring whether the legislative record evinces a[n] [ ] intent to punish." Nixon ,
110. As to the third element for a bill of attainder, Act 287 establishes the experimental rate without the protections of a judicial trial. See
111. Because SCE & G has failed to meet all elements of the test articulated by the United States Supreme Court in Nixon and Selective Service , which requires the infliction of punishment upon an identifiable individual without a trial, SCE & G cannot show a likelihood of success on the merits on its claim asserting a bill of attainder.
B. Likelihood of Suffering Irreparable Harm Absent an Injunction, The Balance of Equities, and the Public Interest Factors
112. Generally, in determining whether to grant a motion for injunctive relief, "[t]he court must also consider the balance of hardships between the litigants and the impact on the public at large prior to issuing an injunction." Uhlig, LLC v. Shirley , C/A No. 6:08-cv-01208-JMC,
*576113. However, SCE & G has not made a clear showing that it will likely succeed on the merits because the law on the questions at the heart of the dispute does not favor its positions. Therefore, because SCE & G cannot show a likelihood of success on the merits, this court need not address the other necessary elements for preliminary injunctive relief. La Union Del Pueblo Entero v. Fed. Emergency Mgmt. Agency ,
V. CONCLUSION
114. In sum, SCE & G has not established that it is clearly likely to succeed on the merits of its claims. For the foregoing reasons and after careful consideration of the entire record, the court DENIES SCE & G's Motion for Preliminary Injunction. (ECF No. 5.)
IT IS SO ORDERED.
"Act 287" was ratified as "R287," but is enumerated as Act 258. To be consistent with the filings in this case, the court will refer to Act of June 28, 2018, 2018 South Carolina Laws Act 287 as "Act 287."
"The PSC is charged with implementing the provisions of" Act 287 and Resolution 285. (ECF No. 68 at 6-7 ¶ 17.) According to SCE & G, "[e]ach of the defendants, as individual Commissioners on the PSC, have been, and are expected to be, personally involved in taking actions to implement [ ] Act [287 and Resolution 285] and violate SCE & G's constitutional rights." (Id. )
On July 18, 2018, the court granted Motions to Intervene filed by Intervenor Defendants. (ECF Nos. 41, 82.) Additionally, on July 5, 2018, Attorney General Wilson moved to file an Amicus Brief (ECF No. 10) and the court granted Attorney General Wilson's Motion on July 12, 2018. (ECF Nos. 27, 87.)
"Base load" is defined as "the minimum amount of electric power delivered or required over a given period of time at a steady rate." U.S. Energy Information Administration, Glossary , https://www.eia.gov/tools/glossary/index.php?id=B (last visited on Aug. 6, 2018).
All South Carolina Code sections from Title 58 are included in the 2015 codification of Title 58, and the court declines to repeat the year in each citation.
"The [stated] purpose of the BLRA 'is to provide for the recovery of the prudently incurred costs associated with new base load plants ... when constructed by investor-owned electrical utilities, while at the same time protecting customers of investor-owned electrical utilities from responsibility for imprudent financial obligations or costs.' " S.C. Energy Users Comm. v.SCE & G ,
A "combined application" is "a base load review application which is combined with an application for a certificate under the Utility Facility Siting and Environmental Protection Act."
PSC Order No. 2009-104(A), PSC Order No. 2009-696, PSC Order No. 2010-625, PSC Order No. 2011-738, PSC Order No. 2012-761, PSC Order No. 2013-680(A), PSC Order No. 2014-785, Order No. 2015-712, and PSC Order No. 2016-758.
The PSC "currently has several pending dockets in which it will need to address complex issues surrounding the prudency of the costs incurred on the Project, the prudency of abandonment, whether and to what extent revised rates are recoverable, and the final rate SCE & G will be permitted to charge its ratepayers." (ECF No. 52-1 at 20.) The matters are identified as:
Joint Application and Petition of South Carolina Electric & Gas Company and Dominion Energy, Incorporated for Review and Approval of a Proposed Business Combination between SCANA Corporation and Dominion Energy, Incorporated, as May Be Required, and for a Prudency Determination Regarding the Abandonment of the V.C. Summer Units 2 & 3 and Associated Consumer Benefits and Cost Recovery Plans, Docket No. 2017-370-E;
Friends of the Earth and Sierra Club, Complainant/Petitioner v. South Carolina Electric & Gas Company, Defendant Respondent, Docket No. 2017-207-E; and
Request of the Office of Regulatory Staff for Rate Relief to South Carolina Electric and Gas Company's Rates Pursuant toS.C. Code Ann. § 58-27-920 , Docket No. 2017-305-E.
(ECF No. 31 at 7.) SCE & G is the only utility with pending docket matters before the PSC concerning the BLRA. The court is informed that the aforementioned matters have been consolidated. (Id. )
Those orders include: PSC Order 2008-196 (E) approving SCE & G's combined application (ECF No. 68-1 to 68-3); PSC Order No. 2009-104(A) approving initial capital cost schedule and construction schedule (id. ); and eleven PSC Orders approving SCE & G's requests for rate increases (ECF Nos. 68-6 to 68-14).
After SCE & G filed its Amended Complaint (ECF No. 68), Attorney General Wilson renewed his Amicus Brief with leave from the Court. (ECF Nos. 85, 87.)
The parties do not offer argument as to whether SCE & G is seeking a prohibitory or a mandatory preliminary injunction and, as such, which standard is to be applied. However, because the preliminary injunction SCE & G seeks is not appropriate under the less stringent standard, the court need not resolve this dispute.
The Fifth Amendment to the Constitution of the United States declares that "private property [shall not] be taken for public use, without just compensation." U.S. Const. amend. V. "The Takings Clause of the Fifth Amendment[ ] [is] applicable to the States through the Fourteenth Amendment." Palazzolo v. Rhode Island ,
The South Carolina Constitution provides that "private property shall not be taken for private use without the consent of the owner, nor for public use with just compensation being first made for the property." S.C. Const. art. I, § 13.
The court's exercise of its power of judicial review rests upon Article III of the Constitution and depends on the existence of a case or controversy. See Preiser v. Newkirk ,
In Williamson County Regional Planning Comm'n v. Hamilton Bank ,
Salt Creek, L.P. v. City of Warr Acres , No. Civ. 01-1500-F,
An inverse condemnation "may result from government-imposed limitations on the use of private property." Byrd v. City of Hartsville ,
Even though "[r]ipeness is a question of subject matter jurisdiction," the Williamson County requirement is not "a jurisdictional rule." Sansotta ,
The court's inquiry is not whether SCE & G "may collect PSC-approved rates following its abandonment announcement" (ECF No. 91-1 at 30 (emphasis added) ), but whether SCE & G is entitled to collect PSC-approved rates. Under
The phrases "so long as" and "as long as" are defined together by Garner, see Garner, supra ¶ 74.
SCE & G asserts Act 287 "forces SCE & G to fork over $100 million it previously recovered in lawful rates." (ECF No. 5-1 at 26.) The court notes that the PSC's July 3, 2018 Order does require SCE & G to refund ratepayers, mandating a "one-time credit for the months of April, May, June and July should be implemented with the August 2018 billing cycle." (ECF No. 33-4.) However, SCE & G does not challenge the PSC's July 3, 2018 Order. (ECF No. 68 at 3 paragraph 4.) Act 287 instructs the PSC how to calculate the experimental rate and the period to which that rate should apply, but does not mandate a "refund," as suggested by SCE & G. (ECF No. 99 at 16:16-22.) Furthermore, because SCE & G abandoned the Project on July 31, 2017, SCE & G cannot legitimately claim an entitlement to revised rates collected after abandonment because it was no longer constructing the Project.
Defendants suggest that SCE & G may not assert that Act 287 is a bill of attainder because it is a corporation. (ECF No. 31 at 15-16 (citing A Helping Hand, LLC v. Balt. Cty., Md. ,
At the preliminary injunction hearing, SCE & G presented statements of a few members of the South Carolina General Assembly who allegedly wanted to punish the company. However, there are numerous instances where state senators expressly stated that their goal was not to punish SCE & G. (See ECF No. 94-6 at 49:8-19, 50:1-3, 51:17-22, 60:1-5.)