Politics & Government

PSC says utility can’t bill SC customers for pollution case. Here’s what they’ll save

It won’t be much, but some Midlands and Upstate sewer customers will get some relief on their monthly bills.

Reversing itself, the S.C. Public Service Commission on Wednesday rebuked Carolina Water Service for requesting that its customers foot the legal bill — through higher sewer rates — for a pollution case that the utility lost.

“We agree with ORS that the company should not be allowed to recover its litigation expenses in this federal environmental action as the ratepayers derived no benefit from the expenditure,” the commission wrote in its ruling.

Commissioners denied $436,000 in expenses the utility sought to recover from ratepayers. That money would have gone to pay Carolina Water Service’s legal bill for unsuccessfully fighting a lawsuit filed by the Congaree Riverkeeper over the utility’s release of sewage into the lower Saluda River. The scenic waterway stretches between Lake Murray and downtown Columbia.

Carolina Water is a privately owned utility that serves parts of Columbia, Rock Hill, Anderson and other communities.

“Carolina Water Service is reviewing the commission’s directives and will review the final order when it is issued by the commission,” the utility said in a statement. “Carolina Water Service ... is committed to promoting environmental stewardship in the state.”

In May, commissioners approved $2.9 million in higher water and sewer rates for Carolina Water to, in part, cover its legal costs in the pollution case. The PSC also voted to allow Carolina Water’s owners a 10.5 percent profit.

Regulatory Staff challenged that decision, arguing the commission erred in passing the legal costs on to ratepayers after the utility failed to comply with the law, was sued and then lost that suit.

“It was clearly negligent on (Carolina Water Service’s) part to allow the release into the Saluda River,” Rergulatory Staff spokesman Ron Aiken said. “It’s not fair for ratepayers to have to pay for the company to defend itself against illegal discharges.”

The utility sought to recover nearly $1 million in legal fees and costs incurred in five legal actions, including defending Carolina Water in the pollution suit.

The lawsuit alleged that, for years, Carolina Water had allowed poorly treated sewage to drain into the river from its aging Interstate 20 wastewater plant.

Carolina Water lost the case and was assessed a $1.5 million fine for violating the Clean Water Act and required to close a discharge pipe from the I-20 plant.

Carolina Water contended the utility’s legal expenses were justified and could be repaid by its customers over time. “(L)ike all businesses, CWS will incur litigation costs associated with its business operations and should act to protect itself and its ratepayers against claims for liability,” Carolina Water said in its response to Regulatory Staff’s petition.

The PSC also reduced the amount of sludge hauling expenses the utility could recover through rates, but deferred a decision on about $400,000 in other legal expenses associated with other disputes.

Overall, commissioners approved decreasing the utility’s annual sewer service revenue by $111,990. That will mean a 68-cent-a-month decrease on the average customer’s bill.

“I’m really happy ORS took this on and the PSC made the decision,” Congaree Riverkeeper Bill Stangler said. Allowing the utility to bill customers for a pollution case it lost, “undermines the deterrent effect of citizen enforcement cases under the Clean Water Act.”

Tom Barton: 803-771-8304, @tjbarton83
Tom Barton covers South Carolina politics for The State. He has spent more than a decade covering local governments and politicians in Iowa and South Carolina, and has won awards from the S.C. Press Association and Iowa Newspaper Association for public service and feature writing.