In the Matter of Joint Application of Duke Energy Carolinas, LLC

THIS OPINION HAS NO PRECEDENTIAL VALUE. IT SHOULD NOT BE
CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING
EXCEPT AS PROVIDED BY RULE 268(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA
In The Court of Appeals

In the Matter of Joint Application of Duke Energy
Carolinas, LLC and North Carolina Electric Membership
Corporation for a Certificate of Environmental
Compatibility and Public Convenience and Necessity for
the Construction and Operation of a 750MW Combined
Generating Plant Near Anderson, SC.

Appellate Case No. 2014-001514

Appeal from the Public Service Commission

Unpublished Opinion No. 2016-UP-054
Heard January 14, 2016 – Filed February 10, 2016

AFFIRMED

James Blanding Holman, IV and Christopher Kaltman
DeScherer, Southern Environmental Law Center, both of
Charleston, and Gudrun E. Thompson, Southern
Environmental Law Center, of Chapel Hill, North
Carolina, for Appellants South Carolina Coastal
Conservation League and Southern Alliance for Clean
Energy.

Frank Rogers Ellerbe, III, Robinson McFadden & Moore,
PC, of Columbia, and Timika Shafeek-Horton, Duke
Energy Carolinas, LLC, of Charlotte, North Carolina, for
Respondent Duke Energy Carolinas, LLC.
Shannon Bowyer Hudson, Nanette Solveig Edwards,
Jeffrey M. Nelson, and Florence P. Belser, all of
Columbia, for Respondent Office of Regulatory Staff.

Len Sullivan Anthony, of North Myrtle Beach, for
Respondent North Carolina Electric Membership
Corporation.

Jackquelyn Sue Dickman and Susan Annelle Lake, both
of Columbia, for Respondent South Carolina Department
of Health and Environmental Control.

Richard Lee Whitt, Austin & Rogers, PA, of Columbia,
for Respondent Invenergy Therman Development, LLC.

PER CURIAM: The South Carolina Coastal Conservation League and the
Southern Alliance for Clean Energy (the Alliance) appeal the Public Service
Commission's decision to issue Duke Energy Carolinas, LLC and the North
Carolina Electric Membership Corporation (NCEMC) a Certificate of
Environmental Compatibility and Public Convenience and Necessity to build a 750
megawatt combined cycle natural gas-fired generating facility near Anderson. The
Coastal Conservation League and the Alliance argue the Commission erred in
issuing the Certificate by (1) finding the proposed plant's environmental impact
was justified and (2) not requiring Duke Energy and NCEMC to modify their
application for the Certificate. We affirm and find (1) the Commission considered
and understood the Coastal Conservation League and the Alliance's proposed solar
component, (2) substantial evidence supports the Commission's issuance of the
Certificate, and (3) there is no legal basis for requiring the Commission to
condition the Certificate on Duke Energy soliciting bids for the proposed solar
plant.

"No person shall commence to construct a major utility facility without first having
obtained a certificate1 issued with respect to such facility by the Commission."
S.C. Code Ann. § 58-33-110(1) (2015). "An applicant for a certificate shall file an

1
"The term 'certificate' means a certificate of environmental compatibility and
public convenience and necessity." S.C. Code Ann. § 58-33-20(8) (2015).
application with the commission, in such form as the commission may prescribe."
S.C. Code Ann. § 58-33-120(1) (2015).

The Commission shall render a decision upon the record
either granting or denying the application as filed, or
granting it upon such terms, conditions or modifications
of the construction, operation or maintenance of the
major utility facility as the Commission may deem
appropriate; such conditions shall be as determined by
the applicable State agency having jurisdiction or
authority under statutes, rules, regulations or standards
promulgated thereunder, and the conditions shall become
a part of the certificate. The Commission may not grant
a certificate for the construction, operation, and
maintenance of a major utility facility, either as proposed
or as modified by the Commission, unless it shall find
and determine:

(a) The basis of the need for the facility.

(b) The nature of the probable environmental impact.

(c) That the impact of the facility upon the
environment is justified, considering the state of
available technology and the nature and economics
of various alternatives and other pertinent
considerations.

(d) That the facilities will serve the interests of the
system economy and reliability.

(e) That there is reasonable assurance that the
proposed facility will conform to applicable State
and local laws and regulations issued thereunder,
including any allowable variance provisions
therein, except that the Commission may refuse to
apply any local law or local regulation if it finds
that, as applied to the proposed facility, such law
or regulation is unreasonably restrictive in view of
the existing technology, or of factors of cost or
economics or of the needs of consumers whether
located inside or outside of the directly affected
government subdivisions.

(f) That public convenience and necessity require the
construction of the facility.

S.C. Code Ann. § 58-33-160(1) (2015). "[T]his Court employs a deferential
standard of review when reviewing a decision of the Public Service Commission
and will affirm that decision when substantial evidence supports it." Friends of
Earth v. Pub. Serv. Comm'n, 387 S.C. 360, 366, 692 S.E.2d 910, 913 (2010).

First, we find the Commission considered and understood the Coastal Conservation
League and the Alliance's solar proposal. The Commission made the findings
required by South Carolina Code section 58-33-160. Specifically at issue in this
appeal, the Commission made findings on "the nature of the probable
environmental impact" of the proposed gas plant and determined the impact was
"justified, considering the state of available technology and the nature and
economics of various alternatives and other pertinent considerations." See § 58-
33-160(1)(b)-(c).

The Commission found Duke Energy and NCEMC had appropriately evaluated the
environmental impacts of the proposed plant, and the Commission described those
impacts. Specifically, the Commission found the proposed plant (1) had "critical
infrastructure such as available land, water supply, and transmission facilities . . .
already in place," due to its location—adjacent to an existing power plant; (2) had
archeological clearance; (3) would have "minimal effects on the visual resources
and scenic quality" of the area; (4) would feature "state of the art environmental
control technology for natural gas combined cycle generation;" and (5) would
include a cooling tower to minimize "both the intake and discharge impacts to the
Saluda River." The Commission also noted the Office of Regulatory Staff's
witness testified the proposed plant would not result in any significant impacts to
the environment and the Department of Health and Environmental Control, the
Department of Natural Resources, and the Department of Parks, Recreation and
Tourism were all parties to the case and did not appear.

Additionally, the Commission found the impact of the proposed plant was
"justified, considering the state of available technology and the nature and
economics of the various alternatives and other pertinent considerations." See §
58-33-160(1)(c). The Commission considered the solar proposal and found there
was no need for an additional 375 megawatt solar facility.2 The Commission
found Duke Energy had "conducted a thorough review in determining" the
proposed plant "is best to meet its future electricity generating needs," and
"decline[d] to require [Duke Energy] to do further."3

Second, we find substantial evidence supports the Commission's issuance of the
Certificate. "[T]he [c]ourt may not substitute its judgment for the Commission's on
questions about which there is room for a difference of intelligent opinion."
Friends of Earth, 387 S.C. at 366, 692 S.E.2d at 913. "[T]he Commission's
findings are presumptively correct, [and] the party challenging a Commission order
bears the burden of convincingly proving the decision is clearly erroneous, or
arbitrary or capricious, or an abuse of discretion, in view of the substantial
evidence on the whole record." Id.

The Commission made specific findings based on testimony regarding the nature
of the environmental impact of the proposed plant and whether it was justified.
The Commission accurately described the solar proposal both in its order issuing
the Certificate and its order denying the petition for rehearing. Additionally, Duke
Energy's application and its witnesses4 described the proposed plant's projected
impact on water quality, air quality, and cultural resources. For these reasons, the
Commission's finding that the proposed plant was justified, without the solar plant,
was supported by the evidence.

Third, we find there is no legal basis for requiring the Commission to condition the
Certificate on Duke Energy soliciting bids for the proposed solar plant. Section

2
The Coastal Conservation League and the Alliance argue the Commission
misunderstood their solar proposal. However, the Coastal Conservation League
and the Alliance made this same argument in a petition for rehearing on the
Commission's order issuing the Certificate. The Commission denied the petition
for rehearing and emphasized it understood the proposed solar plant was to be used
to "offset gas generation when conditions exist for economic solar energy
production."
3
The Commission also encouraged Duke Energy to voluntarily consider solar
generation.
4
Interestingly, one of Duke Energy's witnesses testified the proposed solar plant
would be the largest solar plant in the world and would require approximately
2,625 acres of land.
58-33-160 allows the Commission to grant an application for a certificate "upon
such terms, conditions or modifications of the construction, operation or
maintenance of the major utility facility as the Commission may deem
appropriate." § 53-33-160(1). However, this section does not enable the
Commission to grant an application but require more than a "modification" to the
application. "Modification" is defined as a "small alteration, adjustment, or
limitation." Modification, Webster's II New College Dictionary (Houghton Mifflin
Co. ed., 1999). We hold requiring Duke Energy to build—or solicit bids for—the
proposed solar plant would constitute more than a "modification" to its application.
See 64 Am. Jur. 2d Public Utilities § 143 (2011) ("Public service commissions are
administrative agencies whose power is derived from the legislature and whose
functions are legislative functions."); Sloan v. S.C. Bd. of Physical Therapy
Exam'rs, 370 S.C. 452, 468, 636 S.E.2d 598, 606 (2006) ("A statute as a whole
must receive practical, reasonable, and fair interpretation consonant with the
purpose, design, and policy of lawmakers.").

We hold the Commission considered and understood the Coastal Conservation
League and the Alliance's solar proposal, substantial evidence supports the
Commission's issuance of the Certificate, and there is no legal basis for requiring
the Commission to condition the Certificate on Duke Energy soliciting bids for the
proposed solar plant. Accordingly, the Commission's issuance of a Certificate to
Duke Energy and NCEMC is AFFIRMED.

FEW, C.J., and KONDUROS and LOCKEMY, JJ., concur.