In a tale of corporate strategy and legal maneuvering that still impacts consumers today, Duke Power Company’s deal with Greenwood County, South Carolina, back in 1966 set a precedent for electric rates that has endured for decades. Duke Power’s contractual agreement and the subsequent legislative act, Act 1293, have kept customers tethered to electric rates established over half a century ago.
The saga began when Duke Power tendered an offer to purchase Greenwood County’s electric facilities, including a hydroelectric facility at Buzzard Roost. A crucial element of the deal stipulated that Duke Power would maintain the same, or lower, electric rates for all customers of the Greenwood Electric Systems. More interestingly, for existing connections at the time of the sale, the rates charged were to be the lower of the rates by Greenwood County Electric Power Commission and Duke Power Company, a commitment that was expected to prevent any rate increases for these customers.
This agreement was codified into law by the General Assembly with Act 1293 of 1966 following a public referendum. Duke Powe billed its Greenwood County customers under a dual rate structure for 15 years. It has transferred Greenwood rate customers to its system-wide rates whenever (1) bills under system-wide rates for a location became less than the Greenwood rates; (2) a location required a new physical connection; and (3) a location’s electric demand increased to the point Duke deemed it a “new connection”.
As the years passed, Duke rates surged by 220% to 350% over the original Greenwood rates, creating a stark disparity among ratepayers and sparking legal disputes. Duke’s efforts to adjust these rates upwards were rebuffed by the Public Service Commission, citing the unalterable terms of Act 1293.
Despite Duke’s assertion that the special law was unconstitutional and discriminatory, the courts affirmed the enforceability of the contract and the constitutionality of Act 1293. The courts found no grounds for amending the set rates or for claims of discrimination, as they were established by the law specific to the situation in Greenwood County.
Relevant articles:
– Duke Power Co. v. SC Public Service Comm.