Opinion ID: 1363749
Heading Depth: 2
Heading Rank: 2

Heading: municipal right to operate utility

Text: Cities contend they have an absolute and exclusive right to operate electrical utilities, as provided in § 16: Any incorporated municipality may, upon a majority vote of the electors of such political subdivision who shall vote on the question, acquire by initial construction or purchase and may operate ... electric... utility systems and plants. They contend, further, that the right granted them in § 16 includes an exclusive right to serve all customers within the city, a right which amended § 58-27-1360 makes contingent upon a PSC finding of deficient service. In support of these positions Cities rely upon Green v. City of Rock Hill , 149 S.C. 234, 147 S.E. 346 (1929) and Sossamon v. Greater Gaffney Metropolitan Utilities Area , 236 S.C. 173, 113 S.E. (2d) 534 (1960). However, the statements in Green and Sossamon regarding municipal rights are dicta only. Subsequent cases have held that no absolute municipal right to operate utilities exists. In City of Orangeburg v. Moss , 262 S.C. 299, 204 S.E. (2d) 377 (1974), we held that what is now § 16 was adopted to solve an ultra vires problem, and is not a limitation on the power of the state to regulate. We again cited this interpretation with approval in Berry v. Weeks , 279 S.C. 543, 309 S.E. (2d) 744 (1983). Under these holdings any exemption from regulation which municipal plants enjoy is statutory. We hold that the General Assembly may, consistently with § 16, modify or abrogate this exemption.