Opinion ID: 2396599
Heading Depth: 2
Heading Rank: 1

Heading: Meaningful Opportunity to Respond

Text: Consistent with its obligation to provide Utility an opportunity to achieve a reasonable return, [8] the PSC was obligated to accord Utility a meaningful opportunity to rebut the evidence presented in opposition to its proposed rates. Cf. 26 S.C.Code Ann. Regs. 103-845(C) (Supp.2010) ([T]he Commission shall require any party and the Office of Regulatory Staff to file copies of testimony and exhibits and serve them on all other parties of record within a specified time in advance of the hearing.). Here, the PSC denied Utility's application for a rate increase on the ground that Utility failed to meet its burden of proof. However, Utility supplied the information expressly required by the PSC's regulations, and the PSC did not give Utility a meaningful opportunity to provide the additional information the PSC determined was necessary. This was an error of law. The information an applicant must provide in support of its proposed rate increase is set forth by regulation. These regulations do not explicitly require neighborhood-by-neighborhood data, nor do they require any particular type of data regarding the reasonableness of payments to an affiliated entity. See 26 S.C.Code Ann. Regs. 103-512.4(A) (1976 & Supp.2010) (requirements for wastewater utilities seeking an increase in existing rate); 26 S.C.Code Ann. Regs. 103-712(4)(A) (1976 & Supp.2010) (requirements for water utilities seeking an increase in existing rates); 26 S.C.Code Ann. Regs. 103-823 (Supp.2010) (applications in general). Consequently, Utility had no notice the PSC would require additional information about specific neighborhoods until the PSC requested that information at a public hearing. Under those circumstances, Utility was able to give only generalized answers and answers from memory, rather than the targeted and specific data the PSC seems to have desired. Similarly, while Utility could expect the PSC to examine the reasonableness of its transactions with an affiliate, [9] it had no notice prior to its hearing that the PSC would require information about the prices charged by Bio-Tech's competitors. The PSC was entitled to request this information pursuant to its role as fact-finder and pursuant to regulation. See 26 S.C.Code Ann. Regs. 103-512.4(A)(16) (requiring an applicant for a rate increase to include with its application [a]ny other pertinent or relevant information determined necessary by the commission.); 26 S.C.Code Ann. Regs. 103-712(4)(A)(16) (same). Nevertheless, where the PSC seeks additional information beyond that which its regulations explicitly require, it must give an applicant an appropriate opportunity to gather data in response. Because the PSC did not give Utility a fair opportunity to respond in this case, we reverse and remand for further proceedings. Cf. Hilton Head Plantation Utilities, Inc. v. Public Service Comm'n of S.C., 312 S.C. 448, 449-52, 441 S.E.2d 321, 322-23 (1994) (after finding the PSC did not err in denying a rate increase based on the lack of evidence before it, remanding to provide the utility an ample opportunity to explain its expenditures and justify them).