Does Santee Cooper have legal authority to sell electricity directly to the City of Rock Hill, given that S.C. Code § 58-31-320 lists specific customers Santee Cooper has 'the right' to serve and doesn't mention municipalities?

Plain-English summary

The City of Rock Hill, through its outside counsel, asked the AG to interpret a 1973 statute about Santee Cooper, S.C. Code § 58-31-320. That statute lists the customers Santee Cooper "shall have the right to provide electric service only to," and the list does not expressly include municipalities. Rock Hill wanted to know whether the statute prohibited Santee Cooper from selling electricity directly to the city. AG Wilson said no.

The statute's structure has two operative parts. First, the list of customers Santee Cooper has the right to serve: Central Electric Power Cooperative, Inc. and its members; everyone Santee Cooper was already serving on July 9, 1973; its then-defined service area; and certain federal-power-project lake areas. That list does not include municipalities by name. Second, a "nothing herein" savings clause that says nothing in § 58-31-320 should be construed to restrict Santee Cooper's right to "furnish electric service to its own premises; to exchange or interchange electric service with[,] purchase electric energy from, or sell energy to any other electric utility."

Rock Hill's argument was that the savings clause's reference to "any other electric utility" covers municipal utilities like Rock Hill, which owns and operates its own electric system as a member of the Piedmont Municipal Power Agency (PMPA). The AG concurred, walking through several supporting points:

1. Statutory text and structure: The "right" language is restrictive on its face, but the "nothing herein" clause carves out sales to other utilities. The narrow definition of "electric utility" in § 58-31-310 excludes municipalities, but the AG concludes that exclusion does not control for purposes of the § 58-31-320 carve-out. Section 58-27-1230 elsewhere in the code refers to municipalities as "electric utilities."

2. Santee Cooper's underlying authority: Section 58-31-30(8) authorizes Santee Cooper to "manufacture, produce, generate, transmit, distribute and sell water power, steam electric power, hydroelectric power" within and without South Carolina. The Supreme Court in Clarke v. S.C. Pub. Serv. Auth. (1935) recognized Santee Cooper's power to sell out of state, which is broader than the geographic limits in § 58-31-320. Reading § 58-31-320 to be the exclusive customer list would conflict with § 58-31-30(8).

3. Long-standing practice: Santee Cooper has been selling electricity directly to the Town of Bamberg since 1977 (four years after § 58-31-320 was enacted). That contract was renewed for 20 years in 2016. Santee Cooper also sells to PMPA (which then distributes to its 10 municipal members, including Rock Hill) under a long-term agreement reached in 2011. None of those arrangements has ever been challenged as violating § 58-31-320. Under Etiwan Fertilizer Co. v. Tax Comm. (1950), this long-acquiesced administrative interpretation gets great weight.

4. Constitutional protection of municipal utility rights: Article VIII, § 15 of the South Carolina Constitution prohibits the General Assembly from granting utility rights of way over municipal streets or property without the municipality's consent. Article VIII, § 16 expressly authorizes municipalities to acquire and operate electric systems on a majority vote of their electors. Article VIII, § 17 says municipal powers include those fairly implied. Johnson v. Piedmont Municipal Power Agency (S.C. 1982) recognized that PMPA municipalities have constitutional authority to organize and provide electricity to their consumers. City of Aiken, City of Rock Hill, Town of Awendaw, and a line of similar SC Supreme Court cases protect the right of municipalities to choose their electric suppliers. Reading § 58-31-320 to forbid Santee Cooper from selling to Rock Hill would conflict with these constitutional protections. Under State v. Peake (S.C. 2003) and Davis v. County of Greenville (S.C. 1996), statutes should be construed to avoid constitutional conflict.

5. In pari materia construction: Statutes on the same subject must be read together (Great Games v. SCDOR 2000; Young v. Keel 2020). Section 58-31-30(8) and § 58-31-320 must be read as a seamless system, not in isolation. The 1973 statute set Santee Cooper's primary service area (the three coastal counties of Berkeley, Georgetown, and Horry), not the exclusive list of customers it can serve elsewhere.

Bottom line: § 58-31-320 is awkwardly worded but does not prohibit direct sales from Santee Cooper to Rock Hill. The "only to" language emphasizes Santee Cooper's right to exclusive service in its primary territory, not a ceiling on its overall customer base. The savings clause covers sales to other electric utilities, which the AG reads to include municipal utilities like Rock Hill. The legislature has acquiesced in this practice for 50+ years.

What this means for you

For Rock Hill and other PMPA municipalities considering a direct sales contract with Santee Cooper: This opinion gives you the legal basis to negotiate. The AG's view is that § 58-31-320 does not block the transaction. The actual contract terms (price, duration, interconnection) are commercial matters for the parties. Confirm with utility counsel before signing; AG opinions are persuasive but not binding.

For Santee Cooper considering whether to sell directly to a SC municipality: The AG has cleared the legal path. Practical considerations to think through: PMPA contracts may have exclusivity terms that affect the deal; the Public Service Commission's territorial jurisdiction may matter; and the political optics of Santee Cooper expanding its sales to municipalities have been controversial historically.

For attorneys advising municipal utilities on supply contracts: Section 58-31-320 has long been read narrowly, but this is the first formal AG opinion confirming it. The constitutional argument (Article VIII §§ 15, 16) is independently strong: any restrictive reading of § 58-31-320 would have to overcome the municipalities' constitutional electric-utility authority, which courts have repeatedly enforced.

For utility regulatory attorneys at investor-owned utilities like Duke and Dominion: This opinion may expand Santee Cooper's customer base into your existing service areas via municipal customers. Pay attention to territorial assignment statutes (§ 58-27-620 et seq.) and the Supreme Court's line of cases on annexation. Direct Santee Cooper sales to a municipality do not automatically displace your service to other customers in that municipality.

For state legislators considering Santee Cooper reform: This opinion confirms how much practical flexibility Santee Cooper already has, despite the 1973 statute's apparently restrictive language. Any meaningful change to Santee Cooper's customer base would require clearer legislative drafting than the current § 58-31-320, and would have to coexist with the constitutional municipal-utility rights in Article VIII §§ 15-17.

Common questions

Q: What is Santee Cooper?
A: The South Carolina Public Service Authority (Santee Cooper) is a state-owned electric and water utility created in 1934 to generate hydroelectric power from the Santee and Cooper rivers. It is now the largest electricity producer in the state, serving its own retail customers in the three coastal counties (Berkeley, Georgetown, and Horry) plus wholesale customers across South Carolina, including 18 of the state's 20 electric cooperatives (through Central Electric Power Cooperative).

Q: What is the Piedmont Municipal Power Agency (PMPA)?
A: PMPA is a joint agency of 10 South Carolina municipal utilities, created by legislative act in 1978. Members: Abbeville, Clinton, Easley, Gaffney, Greer, Laurens, Newberry, Rock Hill, Union, and Westminster. PMPA purchases power for its members, owns a share of the Catawba Nuclear Station, receives federal hydroelectric power, and contracts with Santee Cooper (since 2011) for additional supply.

Q: What does § 58-31-320 actually say?
A: It says Santee Cooper "shall have the right to provide electric service only to" four specified categories of customers (Central Electric Power Cooperative and its members; customers it was already serving on July 9, 1973; its present service area; and federal-project lake areas). It then has a "nothing herein" clause preserving Santee Cooper's right to serve its own premises, exchange with other electric utilities, and "purchase electric energy from, or sell energy to any other electric utility."

Q: Is a municipality an "electric utility" for purposes of the savings clause?
A: The AG's answer is yes. Section 58-31-310's narrow definition of "electric utility" excludes municipalities, but the AG holds that definition does not control the § 58-31-320 carve-out. Section 58-27-1230 in another chapter refers to municipalities as "electric utilities." The AG also reaches the result through constitutional avoidance: if the statute were read to exclude municipalities from the carve-out, it would conflict with Article VIII §§ 15-16.

Q: What about City of Goose Creek v. S.C. Pub. Serv. Auth.?
A: That is a 2020 circuit court declaratory judgment (Judge Roger Young) that explains Santee Cooper's territorial history through three legislative phases: 1934 creation, 1973 territorial assignment, and 1984 carveout of specific premises Santee Cooper had been serving. The AG quotes Judge Young to confirm that the 1973 law was about assigning service territory, not restricting Santee Cooper's overall sales authority.

Q: Does this opinion affect the territorial assignments under § 58-27-620 et seq.?
A: No. The territorial assignment statutes deal with which provider serves which customers in unincorporated areas and during annexations. This opinion is about whether Santee Cooper can sell to a municipal utility, not whether the municipal utility can serve a particular customer.

Q: Why does Santee Cooper sell to Bamberg directly but not (yet) to Rock Hill directly?
A: Bamberg has been a Santee Cooper customer since 1977 under a contract that was renewed in 2016. Rock Hill currently gets Santee Cooper power indirectly through PMPA. Direct sale to Rock Hill would be a new contractual relationship. The AG opinion confirms the legal authority exists; whether the parties pursue the contract is a commercial decision.

Q: Could the Public Service Commission regulate the price of Santee Cooper sales to Rock Hill?
A: Moody v. City of Orangeburg (S.C. 1995) holds that the PSC does not have authority to regulate contracts or rates made by any municipality with its customers. The PSC's authority over Santee Cooper's wholesale sales to a municipal utility is limited; the parties would negotiate terms directly.

Background and statutory framework

The Santee Cooper statutes (Title 58, Chapter 31) lay out a complex framework:

1. Creation and general authority (§§ 58-31-10 to 58-31-90). Santee Cooper is established as a public corporation with broad authority to generate, sell, and distribute electric power.

2. Powers (§ 58-31-30). Enumerates Santee Cooper's specific powers, including (8) generating and selling electric power inside and outside South Carolina.

3. Service rights (§§ 58-31-310 to 58-31-340). Sets out who Santee Cooper has the right to serve and how the service-territory system works. Section 58-31-320 is the key provision; § 58-31-330 defines Santee Cooper's "present service area" referenced therein.

4. Constitutional backdrop (S.C. Const. art. VIII §§ 15-17). Municipalities have constitutional authority to operate electric utilities and to control utility access to their streets and property.

5. Sister statutes on municipal utilities (§§ 5-31-250, 5-31-610). Cities and towns may own and operate electric systems and may furnish electricity to their residents.

The 1973 legislation (Act No. 412) that produced § 58-31-320 was driven by territorial disputes between Santee Cooper and the investor-owned utilities. The result was to give Santee Cooper exclusive rights in Berkeley, Georgetown, and Horry counties, while preserving its ability to sell wholesale to other utilities. The statute's awkward drafting reflects the political compromise; the AG's opinion gives effect to the compromise's broader purpose rather than to the literal "only to" language.

Citations and references

Statutes: S.C. Code § 58-31-320 (the operative statute); § 58-31-330 (Santee Cooper service area); § 58-31-30(8) (Santee Cooper enumerated powers); § 58-31-310 (electric utility definition); § 58-31-80 (Santee Cooper for benefit of all the people); § 58-27-1230 (municipality as electric utility elsewhere in code); § 5-31-610 (cities/towns may own electric systems); § 5-31-250 (cities/towns may furnish utilities).

Constitutional provisions: S.C. Const. art. VIII § 15 (municipal consent for utility use of streets); § 16 (municipal authority to operate electric system); § 17 (fairly implied powers).

Cases: Broadhurst v. City of Myrtle Beach Election Comm'n, 342 S.C. 373, 537 S.E.2d 543 (2000); State v. Sweat, 386 S.C. 339, 688 S.E.2d 569 (2010); Sloan v. S.C. Bd. of Physical Therapy Exam'rs, 370 S.C. 452, 636 S.E.2d 598 (2006); Boyce v. Lancaster Co. Nat. Gas Auth., 266 S.C. 398, 223 S.E.2d 769 (1976); Clarke v. S.C. Pub. Serv. Auth., 177 S.C. 427, 181 S.E. 481 (1935); Johnson v. Piedmont Municipal Power Agency, 277 S.C. 345, 287 S.E.2d 476 (1982); Etiwan Fertilizer Co. v. Tax Comm., 217 S.C. 354, 60 S.E.2d 682 (1950); Great Games, Inc. v. S.C. Dept. of Revenue, 339 S.C. 79, 529 S.E.2d 6 (2000); Young v. Keel, 431 S.C. 554, 848 S.E.2d 67 (Ct. App. 2020); Moody v. City of Orangeburg, 319 S.C. 184, 460 S.E.2d 374 (1995); Blue Ridge Elec. Co-op., Inc. v. City of Seneca, 297 S.C. 283, 376 S.E.2d 514 (1989); Berkeley Elec. Co-op. Inc. v. S.C. Pub. Serv. Comm'n, 304 S.C. 15, 402 S.E.2d 674 (1991); City of Rock Hill v. Pub. Serv. Comm'n of S.C., 308 S.C. 175, 417 S.E.2d 562 (1992); S.C. Elec. & Gas Co. v. Town of Awendaw, 359 S.C. 29, 596 S.E.2d 482 (2004); City of Aiken v. Aiken Elec. Co-Op, 305 S.C. 466, 409 S.E.2d 403 (1991); City of Orangeburg v. Moss, 262 S.C. 299, 204 S.E.2d 377 (1974); Mauldin v. City Council of Greenville, 33 S.C. 1, 11 S.E. 434 (1890); State v. Peake, 353 S.C. 499, 579 S.E.2d 297 (2003); Davis v. County of Greenville, 322 S.C. 73, 470 S.E.2d 94 (1996); Germania Savings Bank v. Town of Darlington, 50 S.C. 337, 27 S.E. 86 (1897); City of Goose Creek v. S.C. Pub. Serv. Auth., C/A 2020-CP-08-00821 (Oct. 12, 2020) (circuit court declaratory judgment by Judge Roger Young).

Prior AG opinions referenced: Op. S.C. Att'y Gen., 1999 WL 387039 (April 1999); Op. S.C. Att'y Gen., 1994 WL 136191 (No. 94-19) (Mar. 19, 1994).

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/opinion-on-whether-the-south-carolina-public-service-authority-santee-cooper-is-restricted-from-selling-or-purchasing-electric-energy-to-or-from-the-city-of-rock-hill-under-the-plain-language-of-s-c-code-annotated-section-58-31-320/
• Original PDF: https://www.scag.gov/media/pvwnhtti/dillinghamp-os-11021-final-opinion-6-10-2025-cook.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

ALAN WILSON
ATTORNEY GENERAL

June 10, 2025

Paul W. Dillingham, Esquire
Spencer & Spencer
P.O. Box 790
Rock Hill, SC 29731-6790

Dear Mr. Dillingham:

You note that your firm represents the City of Rock Hill and that you seek an opinion as to whether the South Carolina Public Service Authority ("Santee Cooper") is "restricted from selling or purchasing electric energy to or from the City under the plain language of S.C. Code Ann. § 58-31-320?" You further ask "[e]ven if the answer is yes, is a restriction on the City's ability to purchase or sell electric energy from the Authority enforceable under the SC Constitution?" These questions have never been addressed by our courts or in an opinion of this Office. As far as we can tell, § 58-31-320 has not been formally interpreted.

In your letter, you set forth a detailed legal analysis, which we greatly appreciate. You state that "[i]t is the City's position that the plain language of the statute does not restrict the Authority from contracting with the City for the purchase or sale of electricity." Further, you argue that "[e]ven if a construction of the statute could be read to prevent a municipality from being able to purchase or sell electric energy from the Authority, such construct would fundamentally conflict with the SC Constitution and well-established law regarding the rights of municipalities in the context of utility services." The statute in question is open to different interpretations. It can be read as a restriction upon Santee Cooper's service list. Or it can be interpreted as not restricting its sale to municipalities.

It is our understanding that the City of Rock Hill and other municipalities already receive a portion of their electrical power from Santee Cooper through the Piedmont Municipal Power Agency (PMPA). The PMPA was created by legislative act in 1978 and is a joint collection of various upstate municipalities, including the City of Rock Hill. In 2011, Santee Cooper and the PMPA reached a long-term agreement whereby Santee Cooper would sell electrical power to PMPA who would then distribute power to its members. PMPA provides electricity to 10 municipal utilities in South Carolina, serving the cities of Abbeville, Clinton, Easley, Gaffney, Greer, Laurens, Newberry, Rock Hill, Union and Westminster. The contract provides that PMPA will purchase power [from Santee Cooper] to meet all of its load beyond the amount served by PMPA's partial ownership of the Catawba Nuclear Station; its participants' share of electricity from the Southeastern Power Administration hydroelectric facilities; and load met by individual generating sources owned by PMPA participants.

Thus, your opinion request would encompass not only the City of Rock Hill, but other similarly situated municipalities who are members of the PMPA.

Moreover, Santee Cooper has been selling electrical power to the Town of Bamberg since 1977, not long after § 58-31-320 was enacted in 1973. The contract was renewed for 20 years in 2016.

Law Analysis

Section 58-31-320 is titled in the Code as "Customers to Whom [Public Service] Authority shall provide electric service." This provision states as follows:

After July 9, 1973, the Public Service Authority shall have the right to provide electric service only to, and it shall have the right to serve:

(1) Central Electric Power Cooperative, Inc., including:
(a) all electric cooperatives that are members of Central Electric Power Cooperative, Inc., on July 9, 1973;
(b) any electric cooperative which after July 9, 1973, becomes a member of Central Electric Power Cooperative, Inc.;
(c) any electric cooperative which after July 9, 1973, ceases to be a member of Central Electric Power Cooperative, Inc.; and
(d) in the event Central Electric Power Cooperative, Inc. ceases to exist as a corporate entity, any electric cooperative which was a member of Central Electric Power Cooperative, Inc., at the time of its dissolution;

(2) all premises, customers, and electric cooperatives served by it on July 9, 1973;

(3) its present service area as defined in Section 58-31-330;

(4) those areas owned, leased or controlled by the Public Service Authority adjacent to the lakes and waterways of Federal Power Commission Project No. 199.

If, after July 9, 1973, any customers, premises, or electric cooperatives located outside the present service area of the Public Service Authority as defined in Section 58-31-330 and being served by the Public Service Authority, including any subsequent expansions or additions by such customers, premises, or cooperatives, ceases or discontinues accepting electrical service from the Public Service Authority, the Public Service Authority may subsequently sell and furnish electrical service to new customers, premises, or electric cooperatives from its major transmission lines in an amount not exceeding the amount of power the sale of which was lost by reason of such discontinuance of service.

Nothing contained herein shall be construed to restrict the right of the Public Service Authority to furnish electric service to its own premises; to exchange or interchange electric service with[,] purchase electric energy from, or sell energy to any other electric utility or any joint agency organized and operating pursuant to Chapter 23 of Title 6; to construct additional facilities, within or without its present service area as defined in Section 58-31-330; to construct additional delivery points to or for any of the premises or customers it is authorized to serve as provided for in this section; or to fulfill the growth needs of any customer legal served by it.

The overarching purpose of the Act was to give Santee Cooper exclusive service rights in three counties (Horry, Berkeley and Georgetown).

Conclusion

As your letter suggests, section 58-31-320 is subject to alternative interpretations. The statute's language is awkward, certainly. However, the "only to" language may be read simply as emphasizing the "right" of Santee Cooper in the three counties of Berkeley, Georgetown, and Horry. Moreover, as mentioned above, the purpose of the Act was to ensure that Santee Cooper had its own territory.

In addition, this provision makes it clear that Santee Cooper is not prohibited from selling "electrical energy to any other electrical utility." While the definition of "electrical utility" in section 58-31-310 appears to exclude municipalities, we do not deem this definition as controlling here for purposes of the limitations found in section 58-31-320. As you indicate, the statute must be interpreted broadly for purposes of protecting the rights of a municipality. Indeed, section 58-27-1230 refers to a municipality as an "electric utility." See Johnson v. PMPA, supra (noting that the South Carolina Constitution ensures the right of a municipality to provide electric power to its residents).

Further, Santee Cooper has, for years, provided electricity to Rock Hill indirectly through the PMPA, of which it is a member. It apparently has not been thought that such sale violated any law. Likewise, for Santee Cooper to sell electricity directly to Rock Hill or other similarly situated member of the PMPA is little different, and would not, in our opinion, contravene section 58-31-320. Moreover, the Legislature has long acquiesced in this transaction, as well as Santee Cooper's providing electrical power directly to the Town of Bamberg since 1977. If the General Assembly had wished to prohibit such sales to municipalities by Santee Cooper, it could easily have done so in the 1973 Act, or subsequently. Yet, tellingly, it did not.

Finally, section 58-31-320 must be construed in light of Article VIII, Section 15 of the Constitution. As you note, if section 58-31-320's purpose "was to curb the City's ability to purchase or sell electric energy- a function of owning and operating electric utilities- the Statute would directly conflict with the SC Constitution and the case law applying the pertinent provisions thereof." In this instance, Art. VIII, Section 15 and section 58-31-320 were adopted at virtually the same time, and it is difficult to imagine, in that light, that the statute sought to prohibit a sale of electrical power by Santee Cooper to a member of the PMPA, such as Rock Hill or other similarly situated municipalities. Art. VIII, Section 15 protects the right of municipalities against any such prohibition.

Therefore, while § 58-31-320 is awkwardly worded, we do not deem it to prohibit the sale of electricity by Santee Cooper to Rock Hill. The statute appears never to have been so interpreted. Thus, we do not believe a court would interpret the statute so as to prohibit the sale by Santee Cooper to Rock Hill.

Sincerely,

Robert D. Cook
Solicitor General