THE STATE OF SOUTH CAROLINA
In The Supreme Court
City of Camden, Respondent,
Commission of South
Carolina and Black
Appeal From Richland County
J. Derham Cole, Judge
Opinion No. 24973
Heard June 9, 1999 - Filed July 19, 1999
F. David Butler, of Columbia, for appellant Public
Arthur G. Fusco, of Columbia, for appellant Black
River Electric Cooperative.
James M. Brailsford, III, of Robinson, McFadden &
Moore, of Columbia, for respondent.
MOORE, A.J.: This appeal is from a circuit court order
reversing a decision of appellant Public Service Commission (PSC) that
assigned an area already served by respondent (City) to appellant Black
River Electric Cooperative (Coop). We affirm.
In October 1996, several residents of the Red Hill area of Lee
County filed a complaint with the PSC alleging inadequate and
undependable electrical service from City. The complainants sought relief
under S.C. Code Ann. § 58-27-660 (1977), which allows a change in electric
supplier for inadequate service, and asked that Coop take over service of
A hearing was held on June 25, 1997. Two residents testified to
power surges and outages occurring from 1990 through the summer of
1996. City Manager Broom testified City had retained an electrical
engineering firm in September 1996 which recommended repairs including
adding voltage regulators and capacitor banks, replacing reclosers, and
coordinating the types and sizes of reclosers and fuses. This work had
been completed by the date of the hearing at a cost of $35,000. Broom
further testified that long-term improvements to meet growing demand
were in the planning stages.
City also put up the testimony of an electrical engineer, A.J. Molnar,
who corroborated that all the recommended repairs had been completed in
April 1997. He testified that as of the weekend before the hearing,
voltage readings in the Red Hill area indicated a constant voltage of 122
volts which is considered "very good." These readings indicated no voltage
surges or low voltage problems. Molnar testified that the current
electrical status of the Red Hill area would be sufficient for "a good
number of years" and could accommodate a five percent increase in load.
In its order, the PSC sua sponte took judicial notice that it had in
its files no certificate of public convenience and necessity to support City's
service of the area as required under S.C. Code Ann. § 58-27-1230 (1977).1
a municipality within its corporate limits with these exemptions:
(a) for any extension within any municipality or district within
which it had lawfully commenced operations prior to April 8,
1932, (b) for an extension within or to territory already served by
it, necessary in the ordinary course of its business or (c) for an
extension into territory contiguous to that already occupied by it
It concluded City was not lawfully serving the Red Hill area (which City
had served since at least 1940) because City had failed to prove it was
exempt from obtaining such a certificate. Accordingly, the PSC assigned
the Red Hill area to Coop under S.C. Code Ann. § 58-27-640 (1977).
On appeal, the circuit court reversed. It found there was no
substantial evidence that City's electrical service was inadequate at the
time of the PSC hearing. Further, it was an error of law to assign the
Red Hill area to another supplier under §58-27-640 because the legality of
City's service was never raised by the pleadings and City had no notice.
The PSC and Coop appeal.
1. Did the circuit court apply the appropriate standard of
2. Did the PSC properly assign the area to Coop because City's
service was unlawful?
1. Standard of review
Appellants contend the circuit court's order should be reversed
because it substituted its own view of the facts in finding there was no
evidence of inadequate service. See Porter v. South Carolina Pub. Serv.
Comm'n, 333 S.C. 12, 507 S.E.2d 328 (1998) (appellate court may not
substitute its judgment for that of the PSC). This issue is without merit.
First, the record is clear there was no evidence of inadequacy at the
time of the hearing before the PSC. Moreover, regardless of the circuit
court's finding, the PSC did not rest its decision on inadequacy of service
presumably because reassignment for inadequacy of service under §58-27-
660 does not apply to municipalities. 2Relief for inadequacy of service by a
municipality is limited under S.C. Code Ann. § 58-27-1520 (1977) to
2 Section 58-27-610(l), which applies to Article 5 of Chapter 27, excludes
a municipality from the definition of "electric supplier." Section 58-27-660 is
part of Article 5 and therefore does not apply to municipalities.
ordering City to improve its electrical service.3Accordingly, inadequacy of
service could not support assignment of the Red Hill area to Coop in this
2. Lawfulness of City's service
Appellants contend the circuit court improperly relied on Camden v.
South Carolina Pub. Serv. Comm'n, 283 S.C. 380, 323 S.E.2d 519 (1984),
in reversing the assignment to Coop. Camden involved an area serviced
by a municipality outside its city limits that was assigned by the PSC to
an electric cooperative. The Court concluded on the facts of the case that
since the municipality was lawfully servicing the area, the PSC lacked
authority to assign the area to another electric supplier under § 58-27-640.
In this case, the circuit court concluded the lawfulness of City's
service to the Red Hill area was not properly in issue because it was not
raised by the pleadings. Accordingly, the holding in Camden applied and
the PSC could not assign the Red Hill area to Coop under § 58-27-640.
We agree with the circuit court's ruling. In this case, no allegation
was ever raised regarding unlawful service. In fact, City had no notice of
any such challenge to its service until the PSC issued its order. See
Cameron & Barkley Co. v. South Carolina Procurement Review Panel, 317
S.C. 437, 454 S.E.2d 892 (1995) (administrative agency's consideration of
an issue without notice resulting in prejudice violates procedural due
Further, S.C. Code Ann. § 58-27-1270 (1977) provides the proper
procedure in a case of unlawful service:
Whenever ... [a] governmental body ... is engaged ... in
Whenever the Commission, after a hearing had upon
its own motion or upon complaint, finds that the
service of any electrical utility is unreasonable,
unsafe, inadequate, insufficient or unreasonably
discriminatory the Commission shall determine the
reasonable, safe, adequate and sufficient service to be
observed, furnished, enforced or employed and shall
fix the same by its order, rule or regulation.
operation without having secured a certificate of public
convenience and necessity as required by the provisions of this
chapter, or otherwise in violation thereof, any interested
electrical utility, electric cooperative, consolidated political
subdivision, corporation or municipality may file a complaint
with the Commission. The Commission may, with or without
notice, make its order requiring the party complained of to
cease and desist ... until the Commission may, after hearing,
make such order and prescribe such terms and conditions in
harmony with this chapter as are just and reasonable.
This section clearly envisions a complaint and action to specifically
challenge unlawful service by an electric supplier.
The circuit court's order reversing the PSC's assignment of the Red
Hill area to Coop is AFFIRMED.
FINNEY, C.J., TOAL, WALLER, and BURNETT, JJ., concur.