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Federal court dismisses SCE&G lawsuit

Staff Report //July 27, 2018//

Federal court dismisses SCE&G lawsuit

Staff Report //July 27, 2018//

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A federal court has dismissed a complaint by S.C. Electric & Gas alleging laws passed during a special legislative session in June are unconstitutional.

The court gave SCE&G the option to file an amended complaint by today at 3 p.m., and parent company SCANA said the utility intended to do so. The court’s order specified that a response to an amended complaint be filed by Saturday at 3 p.m.

SCE&G sued on June 29, asking for an injunction preventing the S.C. Public Service Commission from implementing a temporary 15% reduction in rates charged to customers related to the failed V.C. Summer nuclear project.

The ruling by the U.S. District Court for the District of South Carolina, Columbia Division, issued Thursday stated that “SCE&G has failed to state a plausible claim against the individual commissioners, and without individual allegations against the individual commissioners, the court cannot infer that any actions by the commissioners violated SCE&G’s constitutional rights under the color of state law.”

The court’s order (.pdf) also said that because the 15% rate reduction does not represent a final PSC order, SCE&G is not able to appeal the new rate.

Despite the lawsuit, the PSC voted July 2 to enact the rate cuts, which would last only until December, when the state regulatory committee is slated to make a final decision on who should pay for the abandoned project. The PSC also ordered that the new rates begin with SCE&G's first August billing cycle and mandated credits reflecting the 15% cut for customers’ bills in April, May, June and July.

“Now, despite existing law, the PSC’s oversight of SCE&G’s activities, and the fact that there are and have been ongoing proceedings to evaluate SCE&G’s construction efforts, the General Assembly has elected to change the proverbial rules of the game after it has ended,” SCE&G’s amended 54-page complaint (.pdf) said.

The amended complaint also detailed comments made and actions taken by lawmakers about SCANA’s role in the abandoned nuclear reactors, saying: “In other words, lawmakers weighed information presented to legislative committees without the benefit of any of the protections of judicial process.” SCE&G also alleges the PSC’s actions “impermissibly infringe on SCE&G’s constitutional rights, including by changing the legal consequences for past conduct, punishing SCE&G for conduct without appropriate process, and requiring SCE&G to return revised rates lawfully collected and stripping SCE&G of the revised rates that the PSC had previously approved.”

In its original filing (.pdf), SCE&G asserted that it would lose more than $1 million dollars per day if the experimental rate is enforced. The utility claimed that the rate reduction and other aspects of the new laws “constitute an unlawful taking of private property, deny it due process of law, and constitute an unlawful bill of attainder, all in violation of various provisions of the United States Constitution.”

S.C. House Speaker Jay Lucas and Senate President Pro Tempore Hugh Leatherman filed motions to dismiss the original lawsuit. Thursday’s order also cited the legislative immunity of the intervenors under the 11th Amendment, which prohibits federal courts from hearing certain lawsuits against states.

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