Opinion ID: 2396599
Heading Depth: 2
Heading Rank: 2

Heading: Recent Rate Increase

Text: A utility may file an application for a rate increase no more than once per year. S.C.Code Ann. § 58-5-240(F) (1976 & Supp.2010). Our case law suggests that a previous rate increase may provide a baseline for the PSC to use in determining whether a utility has incurred additional expenses requiring additional revenue. Cf. Heater of Seabrook, Inc. v. Public Service Comm'n of S.C. (Heater of Seabrook I), 324 S.C. 56, 61, 478 S.E.2d 826, 828 (1996) (To show that its expenses have increased, Heater need only introduce data comparing the expenses from the test year used in the previous rate case with those from the test year in this case. . . .). Utility argues, however, that the PSC used Utility's recent rate increase as part of its justification for denying the current rate application. To the extent the PSC did so, this was error. Cf. Heater of Seabrook II, 332 S.C. at 29, 503 S.E.2d at 743 (finding it was inappropriate for the PSC to rely in a 1997 order on its reasoning in a 1992 order granting an increase to the same company because this order . . . was based on evidence, and a prior test year, completely different from [the utility's] financial condition at the time of the current application.). The PSC must not use the simple fact of a recent rate increase as a reason to deny a utility's rate application. An application for a rate increase must stand or fall on its own merits. A recent rate increase provides only a starting point for determining whether a utility's rate base or expenses have increased, such that additional revenues are required.