S.E. 2d
THE STATE OF SOUTH CAROLINA
In The Supreme Court
South Carolina Energy
Users Committee, Appellant,
v.
The Public Service
Commission of South
Carolina and SCE&G, Respondents.
Appeal From Richland County
Thomas J. Ervin, Judge
Opinion No. 24839
Heard April 7, 1998 - Filed September 14, 1998
AFFIRMED
Daniel B. Lott, Jr., of Sherrill & Roof, LLP, of
Columbia, for appellant.
Francis P. Mood, of Sinkler & Boyd, P.A.; James B.
Richardson, of Svalina, Richardson & Smith; and
Sarena D. Burch, of SCANA Corp., all of Columbia,
for respondent SCE&G; and F. David Butler, of
S.C. Public Service Commission, of Columbia, for
respondent SCPSC.
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SC ENERGY USERS COMMITTEE v. PUBLIC SERVICE COMMISSION & SCE&G
Finney, C.J.: This is an appeal1 from a circuit court order
upholding an order of the Public Service Commission (PSC) which
approved a rate increase for respondent SCE&G. Appellant contends the
evidence does not support the rate of return on equity awarded in the
order, and that the PSC exceeded its authority in authorizing a Storm
Damage Reserve Fund. We affirm.
Appellant first contends that the PSC erred in allowing
SCE&G a 12% return on equity. It concedes that expert testimony in the
record supports this rate, but argues that the award itself is flawed
because it rests on a speculative basis. See South Carolina Cable
Television Ass'n v. Public Service Comm'n of South Carolina, 313 S.C. 48,
437 S.E.2d 38 (1993) (rate of return cannot be based on unknown expenses
and profits from future technological innovations). Here, the experts
testified that investors were concerned about the perceived threats to the
industry resulting from deregulation and increased competition, and opined
that this perception of risk should be a factor in determining the rate of
return. In an unartfully drawn order, the PSC first appears to say that
the rate increase is necessary because competition is inevitable and events
are unforeseeable, but then states that investor caution concerning
increasing competition is a factor in setting the rate of return.
We must affirm the decision of the PSC if it is supported by
substantial evidence in the record. Heater of Seabrook v. Public Serv.
Comm'n of South Carolina, 324 S.C. 56, 478 S.E.2d 826 (1996). In this
case, we are faced with an order which, if predicated on unforeseeable
future events, must be reversed as speculative. South Carolina Cable
Television Ass'n, supra. On the other hand, if this part of the order is
read as the respondents ask us to, as predicated on the perception of the
threat of increased competition, then the order does not rest on purely
speculative evidence, but rather on the testimony of the experts and
therefore should be upheld under the substantial evidence rule. Hamm v.
South Carolina Public Service Comm'n, 309 S.C. 282, 422 S.E.2d 110
(1992). Since the expert evidence before the PSC involved the perception
issue, we find in this instance that the order should be construed as
respondents urge. We caution the PSC, however, that it must write orders
which are clear on their face, and which do not burden the courts with
determining the Commission's meaning and intent. cf., Hamm v. American
Telephone & Telegraph Co., 302 S.C. 210, 394 S.E.2d 842 (1990) (court
suggests clearer format in future PSC orders); Heater of Seabrook v.
1We grant appellant's motion to add to the record.
p.23
SC ENERGY USERS COMMITTEE v. PUBLIC SERVICE COMMISSION & SCE&G
Public Service Comm'n, Op. No. 24821 (S.C. Sup. Ct. filed July 21, 1998).
We find substantial evidence in the record regarding the role played by
investor perception in this area, and therefore affirm this issue.
The second issue concerns the PSC's authority to permit
SCE&G to accumulate a Storm Damage Reserve Fund to offset expenses
in the event of catastrophic weather damage to its equipment. Appellant
contends that this portion of the order results in the PSC regulating
insurance, a power not given it by statute. We disagree with appellant's
fundamental contention, that the accumulation of this Fund converts
SCE&G into an insurer. Southern Home Ins. Co. v. Burdette's Leasing
Service, Inc., 268 S.C. 472, 234 S.E.2d 870 (1977) (creation of fund in lieu
of insurance does not make one an insurer). We find this issue to be
without merit.
For the reasons given above, this appeal is
AFFIRMED.
TOAL, WALLER, BURNETT, JJ., and Acting Associate Justice
Marc H. Westbrook, concur.
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