Daufuskie Island v. SC Office of Regulatory Staff
Annotate this CaseDaufuskie Island Utility Company, Inc. (DIUC) filed an application with the Public Service Commission for a rate increase for the water and sewer service it provides to residents of Daufuskie Island in Beaufort County. During a hearing on the merits of the application, the commission approved a purported settlement agreement between the Office of Regulatory Staff (ORS) and three property owners' associations: Haig Point Club and Community Association Inc., Melrose Property Owner's Association, Inc., and Bloody Point Property Owner's Association. DIUC appealed, and the South Carolina Supreme Court reversed, finding the agreement "was not a true settlement" because DIUC did not agree to it. The case was thereafter remanded the case to the commission for a new hearing on all issues. On remand, the commission held a second hearing on the merits and issued a second order. DIUC appealed the second order, arguing the commission erred in disallowing certain rate case expenses and refusing to include items of capital in DIUC's rate base. DIUC argued ORS and the commission applied a higher standard of scrutiny on remand in retaliation against DIUC for successfully seeking reversal of the commission's initial order. At oral argument on this second appeal, when pressed by the Court to respond to DIUC's "retaliation" argument, appellate counsel for ORS conceded a heightened standard had been employed. In reversing the Commission, the Supreme Court determined the arbitrary, higher standard of scrutiny affected substantial rights of DIUC. The commission's findings of fact and conclusions of law therefore had to be reversed. The matter was remanded again for a new hearing.
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