For the past four years, a dispute between Duke Energy Carolinas and the owners of a Greenwood drive-in has quietly played out across three regulatory agencies — including the state’s highest court.
It was a standoff that included attempts by the business to forcibly keep the utility off its property by barricading entrances before — owners say — they were forced to abandon the cause or risk losing their investment altogether: A move that would have seen more than $700,000 worth of work wiped away.
Now, after a state Supreme Court decision was made in their favor, Carolyn and Tommy McCutcheon are speaking out about their quest to stay on an electric rate schedule that only 2,540 customers in America can claim.
“This was David versus Goliath,” Tommy McCutcheon said from behind a humming projector.
The saga began in the summer of 2015, after the 9.7-acre site experienced a pair of power outages. The McCutcheons acquired the property in 2008, bringing the 25 Drive-in back into use after 25 years of dormancy and restoring to Greenwood a landmark that first opened in 1945.
For those seven years, the business was paying pennies on the dollar for its power consumption because it was on a rate that hadn’t been changed since 1966.
“I didn’t even know it. I wasn’t aware of it. Nobody brought it to my attention,” McCutcheon said.
The so-called “old” Duke rate has its origins in Columbia.
In 1965, Duke Power Co., predecessor to Duke Energy Carolinas, offered to purchase assets controlled by the Greenwood County Electric Power Commission. Lawmakers at the time agreed to the sale through Act 1293 of 1966 — but under one condition.
Locations served by the local commission prior to July 1, 1965 could not have their rates increased.
At the time, it made sense for Duke to agree.
“Energy costs were trending downward, and it was expected customers impacted by the sale would eventually migrate from the Greenwood rate to a lower Duke rate,” a state Supreme Court opinion issued on Wednesday explained. “Obviously, this estimate proved to be incorrect as energy costs instead trended upward.”
That left 2,540 Duke accounts in an economic donut hole. Unless new connections were run out to the parcels, rates would stay locked into their 1965 levels.
Duke Energy spokesman Ryan Mosier said about 80 of the 2,540 current “old” Duke ratepayers are commercial properties.
For two years — between 2015 and 2017 — the McCutcheons were shifted over to Duke’s modern billing system, increasing their monthly payments from about $200 to nearly $1,000, they said.
That’s where it gets complicated.
But what’s not disputed is that on May 30 and June 13, 2015, power outages disrupted operations at the Drive-In. On June 15, Duke officials including Tommy Fowler, its area construction and maintenance supervisor and Theo Lane, district manager of public and community relations, visited the site and concluded a larger line was needed to serve the Drive-In because of growing capacity.
It would be considered an upgrade, utility officials said, thereby removing the Drive-In’s status as an “old” Duke rate customer.
“I never touched my side, I never did anything, I knew I was in the right. I mean, they came in here, tore all their lines down and everything and put all new lines up and everything because ours were so broke up and beat up,” Tommy McCutcheon said. “I was trying to get a system that was more dependable instead of something that looked like if I hit it with a lawnmower, it would knock it down.”
The McCutcheons retained an electrician of their own, who refuted Duke’s assessment and said the company’s neglect of its own equipment was responsible for the failure.
In 2014, the Drive-In swapped out xenon arc 35-millimeter projection equipment with a modern digital system.
“The xenon arc projectors for each of the theater’s screens were served by two 60 Ampere breakers. Following the installation of the digital equipment, the theater’s screens are each served by a single 40 Ampere breaker. It is my professional opinion that the installation of the digital equipment decreased electrical demand for the theater as a whole,” James R. “Bob” Calhoun, an independent electrician with 37 ½ years of experience, said in January 2017 testimony to the Public Service Commission.
“I am aware that when the theater commenced operation in the late 1940s,” he continued, “it was served by carbon arc projection units, which used even more power than the xenon arc systems and considerably more than the modern digital projection systems in use at the theater today.”
After Duke officials determined a newer system would be needed, the McCutcheons were told that if they didn’t agree to the installation, power would be disconnected until the work was done.
“So I said, ‘If you come over here to take my power off and do all this, don’t come on my property. So I took my lawnmowers and put them on one side, blocking the gate so they couldn’t come in, I took my tractor over there on the other side,” McCutcheon said. “I was extorted, man. Blackmailed.”
On June 17, 2015, Duke cut the lines.
“As a result of the power interruption, all the refrigerated and frozen items in my concession stand spoiled and I was unable to operate on June 17, 2015. Faced with the loss of power, I agreed to meet with Defendant/Respondents agents Tommy Fowler and Theo Lane on the evening of June 17, 2015,” McCutcheon said in 2017 testimony to the PSC.
Lane, who is now a member of the Greenwood County Council, told the PSC in 2017 that the decision to disconnect power to the business was necessary because of the public safety risk posed by faulty equipment.
“I confirmed to him that the upgrade would disqualify him for the Greenwood rate. McCutcheon objected. I told him that DEC (Duke Energy Carolinas) considered the existing service to be dangerous because of the risk of fire. I told him that if he would not agree to an upgrade we would have to disconnect service,” Lane testified.
McCutcheon said he still has strong feelings about the situation.
“They put me through a lot, man. I spent sleepless nights for weeks. I still lose sleep when I get to thinking about it,” he said.
On July 26, 2017, state regulators determined Duke acted improperly because the utility didn’t seek permission from the PSC before taking the Drive-In off its “old” rate.
Through a commission-level appeal to the state’s Appellate and Supreme Courts — all sides unanimously supported the original decision.
On Nov. 8, 2017, the PSC unanimously ruled in favor of 25 Drive-In’s claim to for restoration to the “old” Duke rate.
“It’s imperative that Duke Energy must ensure safe and reliable delivery of power to its customers; however, in this case, the customer has made substantial efforts to be compliant with the requirements necessary to continue to have access to the Greenwood rate. Given all the facts and circumstances about this particular case, I think that there must be a balancing of the interests of the parties,” Commissioner Comer H. “Randy” Randall said in his motion.
And on Wednesday, the state Supreme Court said the Drive-In must be put back on the more favorable rate.
“If Duke arbitrarily removes a customer from the Greenwood rate (as it arguably did here) and places the customer on the Duke rate, this decision would never be reviewable,” the court said. “Such an interpretation of the Act would be absurd and deprive the (Public Service) Commission of its authority to review Duke’s rate-setting activity in the area encompassed by Act 1293.”
Mosier said Duke will abide by the court’s position.
“The court decision outlines in detail the history of the rate, and what must take place for a customer to come off the rate. The entire case was centered around this point,” he said. “The commission in this case agreed that there is a critical need for Duke to provide safe, reliable power to its customers. We will continue to do whatever is necessary to do just that.”
“We appealed the commission’s decision to the South Carolina Supreme Court and they are final authority on this matter. This case is over, but the court made it clear their decision is limited to the facts in this case only,” Lane said.
Meanwhile, the McCutcheons say they’re relieved to have the issue settled so they can focus on running one of America’s 317 remaining drive-in theaters — and one of three operating in the state.
“Our sweet little drive-in. They tried to close us down,” McCutcheon said. “I spent a lot of money fighting them. More than I’ll ever recoup, probably. We’re very lucky we won, but I think we had a very good case.”