Public Utilities Municipal – Designated Service Area – County Certification Required

Laurens County has never certified the unincorporated area between the City of Laurens (Laurens) and the City of Fountain Inn as a “designated service area” of either city; therefore, contrary to Laurens’ argument, Laurens is not entitled to exclusively provide natural gas services to an industrial park between the two cities.

We reverse the contrary ruling of the Court of Appeals.

Laurens contends that a 1992 map and a “gentlemen’s agreement” between Laurens and Fountain Inn grants Laurens the right to exclusively provide natural gas services to the industrial park.

Under S.C. Code Ann. § 5-7-60, municipalities may furnish their services to areas outside their corporate limits “by contract” except within the designated service area of another. The statute defines a designated service area as “an area in which the particular service is being provided or is budgeted or funds have been applied for as certified by the governing body thereof.” The governing body of the designated service area must certify the area is one “in which the particular service is being provided or is budgeted or funds have been applied for” by the purported exclusive provider.

Thus, here, to have created a designated service area in or around Owings Industrial Park, Laurens County—as the governing body of that unincorporated area—must have certified the Laurens (City) Commission of Public Works (LCPW) was the authorized, exclusive natural gas provider in the area. However, Laurens County has never done so.

LCPW argues “as certified by the governing body thereof” refers not to the governing body of the designated service area (Laurens County), but to the municipality (Laurens) or service provider itself (LCPW). We disagree, for to permit a municipality or municipal service provider to unilaterally anoint a designated service area outside the city’s boundaries would lead to an absurd result. Under LCPW’s interpretation, § 5-7-60 would grant a municipality unfettered discretion to unilaterally lay exclusive claim to an area—a designated service area—outside its corporate boundaries, thus allowing the municipality to become the sole provider of services in the area with unrestricted authority to charge whatever rates it pleased.

We reject a construction of § 5-7-60 that is contrary to the statutory language and, moreover, would essentially allow a single municipality to create a monopoly across the entire county based purely on it being the first to claim the territory, with no ability of the county or nonresidents to stop the municipality.

Reversed.

Concurrence

(Few, J.) The majority’s interpretation of the pivotal sentence in § 5-7-60 is correct, but is an interpretation based on the principles of statutory construction. It is not a reading of the plain language of an unambiguous statute.

Commissioners of Public Works v. City of Fountain Inn (Lawyers Weekly No. 010-062-19, 11 pp.) (John Kittredge, J.) Appealed from the Circuit Court in Laurens County (J. Cordell Maddox, J.) On writ of certiorari to the Court of Appeals. Sarah Spruill, Boyd Nicholson and David Holmes for petitioner; Robert Widener and Bernie Ellis for respondent. S.C. S. Ct.