Court puts rates aside a 2nd time

AIKEN --- Another temporary court order was issued Monday halting Avondale Mills' new water and sewer rates for Graniteville and Vaucluse residents until "proper notice" can be given.

State lawmakers touted the ruling by Circuit Judge Jack Early, saying higher July 31 bills should no longer be valid because "proper notice" wasn't published within 10 days of the new rates' approval in June. Some residents' bills increased by hundreds of dollars.

"The practical effect is they just can't impose those rates until the people have had the notice," said state Sen. Shane Massey, who requested the injunction along with state Reps. Roland Smith and Tom Young. "Based on this injunction, the July bills would have to be billed at the old rate."

Avondale officials said they would appeal even as they work toward an agreement this week to have another entity take over the system by year's end.

"We don't believe that in the end this will be a valid ruling, and we anticipate, following our appeal, we will be able to collect in full," said Stephen Felker, Avondale's vice president of corporate development. He argued that the circuit court is not the proper venue for the case and that an appeal would likely be filed in the state appellate court or Supreme Court.

Mr. Massey, whose district includes Aiken, said Judge Early's order essentially agrees that the South Carolina Public Service Commission was required by state law to publish the new rates within 10 days of its June vote. Mr. Massey said that didn't happen, meaning the PSC would have to publish notice of the new rates before they could be enacted.

Mr. Felker said Monday afternoon that Avondale's lawyers were still reviewing the order but that they planned to fight any return to the older rates and hope to charge the new rates in their next bills, which are to go out by next week and be due by mid-September.

Mr. Massey said Avondale's new rates could be imposed 10 days after the PSC publishes notice.

PSC spokesman Charles Terreni said Monday afternoon that the commission has not decided how it will proceed.

"We're in the process of reviewing Judge Early's order, and the commission will have to make a decision at some point," he said.

Meanwhile, Avondale officials are hoping to work out an agreement later this week that would allow the Valley Public Service Authority to take over the Graniteville system.

But "even if we reach an agreement this week. there probably would not be a transfer of ownership any sooner than by year's end," Mr. Felker said.

Calvin Smith, the general manager of the VPSA, said his authority has notified the South Carolina Department of Health and Environmental Control that it would keep Avondale's new rates in effect for about a year as improvements are made to the system and water is temporarily purchased from another water entity, Breezy Hill.

Mr. Smith said Avondale currently purchases from Breezy Hill 5 million to 8 million gallons more water than it sells each month because of water loss in the aging system. He said VPSA would have to do the same until there is a system overhaul and a larger water line added.

After that, Mr. Smith said, the rates might be relaxed.

Monday's temporary restraining order is the second in the case. Another judge granted one earlier this month pending Judge Early's consideration.

The court battle began after the PSC reinstated the new rates Aug. 12, a week after halting them at the request of state lawmakers. Area legislators got involved when several residents complained about much higher bills July 31, saying they didn't know the new rates had been approved and would have adjusted their watering.

Avondale officials have said they gave notice of the proposed rates earlier in the year and that two public meetings were held. They say the rates, which they had subsidized at a much-reduced cost until mill operations ceased, must go up for them to break even.

Judge Early also ruled Monday that Avondale is temporarily restricted from collecting on the new rates that were due Aug. 15 and can't implement the new rates "until proper notice is given." Late fees on bills due Aug. 15 also can't be charged, and customers' water and sewer service can't be terminated based on overdue payments of July 31 bills.

Judge Early found that his court has jurisdiction because the case is not specifically addressing the rates but focusing on whether proper notice of their approval was given.

Reach Preston Sparks at (803) 648-1395, ext. 110, or preston.sparks@augustachronicle.com.