Sarah Zito v. Strata Audobon, LLC

THE STATE OF SOUTH CAROLINA
In The Court of Appeals

Sarah Zito, Alvaro Sarmiento, Jr., Mark Shinn, and
Daniel Bermudez, Appellants,

v.

Strata Audubon, LLC and Strata Veridian, LLC,
Respondents.

Appellate Case No. 2024-000208

Appeal From The Public Service Commission

Opinion No. 6129
Heard May 6, 2025 – Filed January 14, 2026

AFFIRMED

Frederick Elliotte Quinn, IV, and Rachel Igdal, both of
The Steinberg Law Firm, LLP, of North Charleston, for
Appellants.

Kevin A. Hall and Bryant Sparks Caldwell, both of
Womble Bond Dickinson (US), LLP, of Columbia, for
Respondents.

MCDONALD, J.: Sarah Zito, Alvaro Sarmiento, Jr., Mark Shinn, and Daniel
Bermudez (collectively, Appellants) appeal the Public Service Commission's
orders dismissing their complaint. Appellants argue the Commission erred in: (1)
holding Strata Audubon, LLC and Strata Veridian, LLC (collectively,
Respondents) did not operate as a public utility; (2) deviating from prior orders
without a reasoned basis; and (3) making immaterial factual findings not supported
by substantial evidence. We affirm the orders of the Public Service Commission.

Facts and Procedural History

Zito and Sarmiento were tenants at the Audubon Park Apartments (Audubon) in
Berkeley County. Strata Audubon owns the Audubon property, which consists of
thirteen buildings and more than 250 apartments. Similarly, Shinn and Bermudez
were tenants at the Grove Apartments (Veridian) in Spartanburg County—a Strata
Veridian-owned property consisting of thirteen buildings and more than 175
apartments. Appellants claim Strata Equity Group, Inc. (Strata Equity) owns,
controls, and directs both Strata Audubon and Strata Veridian, while Pinnacle
Property Management Services, LLC manages the Audubon and Veridian
apartments for Respondents. Because Respondents do not have water or sewer
submetering infrastructure at either Audubon or Veridian, Respondents contracted
with Conservice, LLC to bill tenants for water and sewer services.

The lease Strata Audubon entered with Zito and Sarmiento (the Audubon lease)
includes a "Utility and Services Addendum," which provides that water and sewer
utilities "will be billed by the service provider to us and then allocated to you based
on the . . . number of persons residing in your dwelling unit." The leases between
Strata Veridian and Shinn and Bermudez (the Veridian leases) likewise include a
"Utility and Services Addendum" providing water and sewer "will be billed by the
service provider to us and then allocated to you based on . . . a combination of
square footage of your dwelling unit and the number of persons residing in your
dwelling unit."

Appellants initially filed an action in the Berkeley County Court of Common Pleas
in which they requested "a finding and declaration that the rates charged by
Defendants for water and sewage are unlawful because not approved by the
Commission." Respondents removed that case to federal court and later moved to
dismiss it. The United States District Court for the District of South Carolina
subsequently dismissed the case "without prejudice based on [Appellants'] failure
to exhaust the available administrative remedies." Zito v. Strata Equity Grp., Inc.,
No. 2:20-CV-3808-BHH, 2021 WL 4137553, at *4 (D.S.C. Sept. 10, 2021).1

1
Because the Commission "issued a binding order on the matter during the
pendency" of Appellants' federal appeal, the Fourth Circuit later remanded the case
"to the district court for consideration in the first instance." See Zito v. Strata
Following the district court's dismissal, Appellants filed this action before the
Commission, and Respondents again moved to dismiss certain claims. After the
Commission granted this motion as to some of these claims, Respondents
requested an order finding no testimonial hearing was required in the customer
complaint proceeding and sought dismissal based on the written record. In
response, Appellants sought an order granting the complainants relief based on the
written record or, in the alternative, setting a scheduling order and hearing. The
Commission dismissed Appellants' complaint based on the written record.
Appellants moved for reconsideration of this order (Order 736), and on January 18,
2024, the Commission denied this motion. Appellants timely appealed.

Standard of Review

"We review questions of statutory interpretation de novo." Books-A-Million, Inc.
v. S.C. Dep't of Revenue, 437 S.C. 640, 642-43, 880 S.E.2d 476, 477 (2022). "An
appellate court must affirm the [findings of fact of an administrative body] if
substantial evidence supports them." Contreras v. St. John's Fire Dist. Comm'n,
442 S.C. 596, 610, 900 S.E.2d 463, 471 (Ct. App. 2024), cert. denied, S.C. Sup. Ct.
order dated Oct. 2, 2024. "A court may reverse or modify [an administrative
body's] decision if substantial rights of the appellant have been prejudiced because
the administrative findings, inferences, conclusions[,] or decisions are affected by
other error of law." Id. (second alteration in original) (quoting Muir v. C.R. Bard,
Inc., 336 S.C. 266, 282-83, 519 S.E.2d 583, 591 (Ct. App. 1999)).

Analysis

I. Section 58-5-10(4)

Appellants assert the Commission erred in finding Respondents did not operate as
a public utility. Their primary argument is that "the language of Section
58-5-10(4) [of the South Carolina Code (2015)] plainly and unambiguously
provides that all that is required for an entity to be a regulated public utility is for
the entity to supply water or wastewater to a portion of the public for
compensation, and therefore, Respondents' conduct made them a regulated public
utility." We disagree.

Equity Grp., Inc., No. 22-1877, 2023 WL 8712054, at *2 (4th Cir. Dec. 18, 2023)
(per curiam).
By statute, the Commission governs public utility rates and services:

The Public Service Commission is hereby, to the extent
granted, vested with power and jurisdiction to supervise
and regulate the rates and service of every public utility
in this State, together with the power, after hearing, to
ascertain and fix such just and reasonable standards,
classifications, regulations, practices and measurements
of service to be furnished, imposed, observed and
followed by every public utility in this State and the State
hereby asserts its rights to regulate the rates and services
of every "public utility" as herein defined.

S.C. Code Ann. § 58-5-210 (2015). The questions before us involve the statutory
definitions of "public utility" and "public or any portion thereof":

(4) The term "public utility" includes every corporation
and person delivering natural gas distributed or
transported by pipe, and every corporation and person
furnishing or supplying in any manner heat (other than
by means of electricity), water, sewerage collection,
sewerage disposal, and street railway service, or any of
them, to the public, or any portion thereof, for
compensation; provided, however, that a corporation or
person furnishing, supplying, marketing, and/or selling
natural gas at the retail level for use as a fuel in
self-propelled vehicles is not a public utility by virtue of
the furnishing, supplying, marketing, and/or selling of
natural gas and a corporation or person whose only
purpose is the furnishing, supplying, marketing, and/or
selling of treated effluent for irrigation purposes is not a
public utility by virtue of the furnishing, supplying,
marketing, and/or selling of treated effluent if the effluent
is not permitted for consumption by a regulatory agency.

(5) The term "public or any portion thereof" means the
public generally, or any limited portion of the public,
including a person, private corporation, municipality, or
any political subdivision of the State for which the
service is performed or to which the commodity is
delivered and whenever such corporation or person
performs a service or delivers a commodity to the public,
or any portion thereof, for which compensation is
required such corporation or person is hereby declared to
be a public utility subject to the jurisdiction and
regulation of the Public Service Commission, the Office
of Regulatory Staff, and Articles 1, 3, and 5 of this
chapter to the extent of its activities within the State.

S.C. Code Ann. § 58-5-10(4), (5) (2015) (emphases added).

"The cardinal rule of statutory construction is to ascertain and effectuate the intent
of the legislature." Hodges v. Rainey, 341 S.C. 79, 85, 533 S.E.2d 578, 581
(2000). "Where the statute's language is plain and unambiguous, and conveys a
clear and definite meaning, the rules of statutory interpretation are not needed and
the court has no right to impose another meaning." Id. "Only where the language
of an act gives rise to doubt or uncertainty as to legislative intent may this Court
search for that intent beyond the borders of the act itself." Creswick v. Univ. of
S.C., 434 S.C. 77, 82, 862 S.E.2d 706, 708 (2021). "The best evidence of
legislative intent is the text of the statute." Id.

We view the statute at issue as plain and unambiguous and, like the Commission,
see nothing in this record to establish that Respondents furnished or supplied water
or sewer to Appellants for compensation. While Respondents do not dispute that
they receive service through Berkeley County Water & Sanitation, Charleston
Water System, and Spartanburg Water System, they persuasively argue that they
merely provide an allocation method and billing function rather than the services
themselves.

Appellants rely on Anchor Point, Inc. v. Shoals Sewer Co. to support their position
that Respondents operate as public utilities, but this case is easily distinguished
from the matter before us. 308 S.C. 422, 418 S.E.2d 546 (1992). In Anchor Point,
our supreme court considered whether, under section 58-5-10(4), a nonprofit
organization created to provide sewerage to condominiums was a public utility
subject to Commission regulation. Id. at 425-27, 418 S.E.2d at 547-49. Although
the sewerage was provided on a not-for-profit basis, the supreme court concluded,
"Based on the facts before us and the broad language of the statute, we think that
Shoals Sewer is a public utility as it serves a limited portion of the public." Id. at
426, 418 S.E.2d at 548. But Anchor Point did not involve a mere submetering or
allocation arrangement because the homeowners' association in that case owned
and operated that sewer plant system. Id. at 424, 418 S.E.2d at 547.
Distinguishing Anchor Point from Appellants' case, the Commission explained,
"[Respondents] do not have any monopoly rights over any service area; do not own
any large, capital-intensive utility infrastructure; and do not seek or obtain any
guaranteed rate of return on the pass-through billing of water and sewer services."

Still, based on definitions of "supply" and "furnish," Appellants argue Respondents
were furnishing and supplying water and sewerage to Appellants and other tenants:

Respondents provided pipes between the area-wide
utility connection and fixtures in the apartments that
made water and sewerage available to Appellants and
other tenants for their use. Respondents were taking
water from the area-wide utility into pipes owned by
Respondents, transporting that water to faucets, shower
heads, and other outlets owned by Respondents, and
providing the water to Appellants and the other tenants at
those outlets. Similarly, Respondents were accepting
wastewater into pipes owned by Respondents and using
those pipes to transport the wastewater to sewer pipes
owned by area-wide utilities.

Although this is a creative argument, we agree with Respondents that mere
"ownership of the pipes that water and sewerage pass through, without the ability
to control the flow of service" does not constitute ownership of the water and
sewerage.2

Next, based on a common definition of "compensation," Appellants argue
Respondents were providing water and sewerage for compensation because in
addition to their water and sewer allocation formula charge, tenants were charged a
monthly service fee. Appellants further claim that because they were never able to
engage in full discovery before the Commission, they do not know if Respondents
are making a profit by charging more for the water than they pay for it. Yet, the
record includes an affidavit from Andrew Gordon, chief operating officer of parent

2
It is undisputed that Respondents lack "the ability to turn off water or sewer
service to individual tenants." They further lack "the ability to control the flow of
water or sewer service in a tenant-specific capacity and therefore could not
exercise control of the commodities."
company Strata Equity Group, stating Respondents "contracted with the third-party
billing company, Conservice, to recover the actual costs of water and sewer
services to its tenants through an allocation formula method on a not-for-profit
basis." And as previously noted, the Audubon lease includes a "Utility and
Services Addendum," providing water and sewer utilities "will be billed by the
service provider to us and then allocated to you based on the . . . the number of
persons residing in your dwelling unit." Similarly, the Veridian leases include a
"Utility and Services Addendum," providing water and sewer "will be billed by the
service provider to us and then allocated to you based on . . . a combination of
square footage of your dwelling unit and the number of persons residing in your
dwelling unit."

Also helpful to our analysis is the Utility Management & Conservation
Association's (UMCA) letter opposing Appellants' position:

A utility allocation method, also known as Ratio Utility
Billing Systems (RUBS), is an alternative method of
tenant billing of utilities, in contrast to sub-metering (a
method used to measure actual utility usage), as a means
of recovering the utility expense billed by a utility
provider to a landlord for usage consumed by the tenants.
RUBS is a common practice used by property owners
nationwide that divides the utility expense proportionally
between the tenants based on a mutually agreed-upon
formula . . . . Due to the nature of utilities and outdated
building infrastructure, RUBS is the most cost-efficient
utility allocation mechanism for many buildings that lack
a preexisting sub-meter infrastructure. In such buildings,
the addition of sub-meters is often cost prohibitive, or
simply infeasible. The use of RUBS does not provide a
means for a landlord to profit from its utility billing to
tenants, but simply a means of reimbursement of utility
costs borne by tenants, yet assessed against landlords.

(footnote omitted).

Finally, Appellants argue Respondents benefited from providing water and
sewerage to Appellants and other tenants because they billed tenants for usage in
common areas such as the leasing office, gym, pool, and irrigation system. This is
a reasonable argument, but it does not change the analysis of whether Respondents
"furnish" or "supply" water or sewerage. As the Commission cogently explained:

Billing tenants for water and sewerage used in the
common areas conferred a benefit on [Respondents]
because they were thus able to take what should be an
operating expense and have the tenants pay those
expenses. The fact that such operating expenses would
presumably otherwise be included in the rent charged for
apartments at the properties does not alter the fact that
[Respondents] obtained a benefit from billing tenants for
common area water and sewerage usage, and to the
contrary, this further proves the point. By not having to
include the water and sewerage expenses for the common
areas in the rent, [Respondents] were able to either: (1)
keep rents at the prevailing market rates but, due to the
decreased expenses for water and sewerage, obtain an
increased profit from the rent or (2) lower rents below the
prevailing market rate to make [Respondents'] rents more
competitive and thereby increase occupancy and earn
increased profits. Additionally, by not having to include
water and sewerage in the common areas in operating
expenses, [Respondents] benefited by being able to use
excessive amounts of water and sewerage to further their
profit interests without any concern for costs.

In sum, we see no error in the Commission's ruling that under the plain language of
section 58-5-10(4), Respondents did not operate as a public utility. 3

II. Deviation from Prior Orders

Appellants next argue the Commission's decision was arbitrary and capricious
because it deviates from prior orders without a reasoned basis for such deviation.
With some effort, we were able to locate some of the referenced orders via the

3
Appellants further assert that to the extent section 58-5-10(4) might be
ambiguous, the Commission erred in finding Respondents did not operate as a
public utility. Because neither Appellants nor Respondents actually argued the
statute is ambiguous—and because the Commission made no such finding—we
decline to address any question of ambiguity.
Commission's docket management system. And we note that in its September 10,
2021 order initially dismissing the federal action without prejudice, the district
court recognized:

The parties disagree as to the meaning and effect of In re
Rule to Show Cause on Submeterers, wherein the
Commission vacated its prior Order No. 1999-[307] "in
which this Commission ordered a rulemaking to
determine specific requirements for certification and
regulation of submeterers." 2003 WL 23325952. In the
prior Order No. 1999-[307], the Commission stated "[w]e
believe that landlords and companies that submeter and
bill tenants for water and/or wastewater services are
indeed public utilities, and should be certified by this
Commission." In re Generic Proceeding Related to
Sub-Metering of Electric, Water and Wastewater
Services, Order No. 1999-307 (S.C.P.C. May 4, 1999),
filed at ECF No. 17-5 at 5. Because the Commission
specifically vacated Order No. 1999-[307] in Order No.
2003-214, Defendants assert that the Commission has
determined that apartment complexes are not public
utilities.

Zito, No. 2:20-CV-3808-BHH, 2021 WL 4137553, at *3 n.4 (emphasis added).
Thus, we find the Commission's decision was neither arbitrary nor capricious and
did not deviate from prior orders without a reasoned basis.

III. Findings of Fact

Finally, Appellants argue the Commission erred in making factual findings not
supported by substantial evidence and immaterial under section 58-5-10(4) and its
own prior orders. Again, we disagree.

In Order 736, the Commission made the following findings of fact:

1. [Respondents] do not have water or sewer submetering
infrastructure in either apartment building at issue in this
proceeding.
2. [Respondents] contracted with a third-party billing
provider, Conservice, to provide the billing functions for
water and sewer service to resident units, and did not bill
tenants directly, nor did [Respondents] contract directly
with any utility providers for service to resident units.

3. [Respondents] contracted with Conservice to recover
the actual costs of water and sewer services to its tenants
through an allocation formula method on a not-for-profit
basis.

4. [Respondents] do not have any monopoly rights over
any service area; do not own any large, capital-intensive
utility infrastructure; and do not seek or obtain any
guaranteed rate of return on the pass-through billing of
water and sewer services.

5. The water and sewer services are provided to the
properties by local utilities and [Respondents] never take
possession of the water and lack the ability to disconnect
the water or sewer service to an individual tenant for
non-payment.

6. [Respondents] are not operating a public utility that is
subject to the jurisdictional authority of the Commission.

The Commission then concluded, "Merely providing metering services and a
billing function is not sufficient activity to be considered a 'public utility' as
defined in [section 58-5-10(4) of the South Carolina Code]. Such an arrangement
does not subject the submeterer to the jurisdiction of the Commission." This legal
conclusion is sound, and substantial evidence supports the Commission's factual
findings.

Conclusion

Appellants receive service through municipal utility systems; Respondents provide
submetering and a billing function. As the substantial evidence in the record
supports the Commission's findings and the Commission properly found it lacked
subject matter jurisdiction, the orders of the Public Service Commission are
AFFIRMED.

KONDUROS and VINSON, JJ., concur.

THE STATE OF SOUTH CAROLINA
In The Court of Appeals

Sarah Zito, Alvaro Sarmiento, Jr., Mark Shinn, and
Daniel Bermudez, Appellants,

v.

Strata Audubon, LLC and Strata Veridian, LLC,
Respondents.

Appellate Case No. 2024-000208

Appeal From The Public Service Commission

Opinion No. 6129
Heard May 6, 2025 – Filed January 14, 2026
Withdrawn, Substituted, and Refiled February 18, 2026

AFFIRMED

Frederick Elliotte Quinn, IV, and Rachel Igdal, both of
The Steinberg Law Firm, LLP, of North Charleston, for
Appellants.

Kevin A. Hall and Bryant Sparks Caldwell, both of
Womble Bond Dickinson (US), LLP, of Columbia, for
Respondents.

MCDONALD, J.: Sarah Zito, Alvaro Sarmiento, Jr., Mark Shinn, and Daniel
Bermudez (collectively, Appellants) appeal the Public Service Commission's
orders dismissing their complaint. Appellants argue the Commission erred in: (1)
holding Strata Audubon, LLC and Strata Veridian, LLC (collectively,
Respondents) did not operate as a public utility; (2) deviating from prior orders
without a reasoned basis; and (3) making immaterial factual findings not supported
by substantial evidence. We affirm the orders of the Public Service Commission.

Facts and Procedural History

Zito and Sarmiento were tenants at the Audubon Park Apartments (Audubon) in
Berkeley County. Strata Audubon owns the Audubon property, which consists of
thirteen buildings and more than 250 apartments. Similarly, Shinn and Bermudez
were tenants at the Grove Apartments (Veridian) in Spartanburg County—a Strata
Veridian-owned property consisting of thirteen buildings and more than 175
apartments. Appellants claim Strata Equity Group, Inc. (Strata Equity) owns,
controls, and directs both Strata Audubon and Strata Veridian, while Pinnacle
Property Management Services, LLC manages the Audubon and Veridian
apartments for Respondents. Because Respondents do not have water or sewer
submetering infrastructure at either Audubon or Veridian, Respondents contracted
with Conservice, LLC to bill tenants for water and sewer services.

The lease Strata Audubon entered with Zito and Sarmiento (the Audubon lease)
includes a "Utility and Services Addendum," which provides that water and sewer
utilities "will be billed by the service provider to us and then allocated to you based
on the . . . number of persons residing in your dwelling unit." The leases between
Strata Veridian and Shinn and Bermudez (the Veridian leases) likewise include a
"Utility and Services Addendum" providing water and sewer "will be billed by the
service provider to us and then allocated to you based on . . . a combination of
square footage of your dwelling unit and the number of persons residing in your
dwelling unit."

Appellants initially filed an action in the Berkeley County Court of Common Pleas
in which they requested, among other things, "a finding and declaration that the
rates charged by Defendants for water and sewage are unlawful" because such
rates were not approved by the Commission. Respondents removed that case to
federal court and later moved to dismiss it. The United States District Court for
the District of South Carolina subsequently dismissed the case "without prejudice
based on [Appellants'] failure to exhaust the available administrative remedies."
Zito v. Strata Equity Grp., Inc., No. 2:20-CV-3808-BHH, 2021 WL 4137553, at *4
(D.S.C. Sept. 10, 2021).1

1
Because the Commission "issued a binding order on the matter during the
pendency" of Appellants' federal appeal, the Fourth Circuit later remanded the case
Following the district court's dismissal, Appellants filed this action before the
Commission, and Respondents again moved to dismiss certain claims. After the
Commission granted this motion as to some of these claims, Respondents
requested an order finding no testimonial hearing was required in the customer
complaint proceeding and sought dismissal based on the written record. In
response, Appellants sought an order granting the complainants relief based on the
written record or, in the alternative, setting a scheduling order and hearing. The
Commission dismissed Appellants' complaint based on the written record.
Appellants moved for reconsideration of this order (Order 736), and on January 18,
2024, the Commission denied this motion. Appellants timely appealed.

Standard of Review

"We review questions of statutory interpretation de novo." Books-A-Million, Inc.
v. S.C. Dep't of Revenue, 437 S.C. 640, 642-43, 880 S.E.2d 476, 477 (2022). "An
appellate court must affirm the [findings of fact of an administrative body] if
substantial evidence supports them." Contreras v. St. John's Fire Dist. Comm'n,
442 S.C. 596, 610, 900 S.E.2d 463, 471 (Ct. App. 2024), cert. denied, S.C. Sup. Ct.
order dated Oct. 2, 2024. "A court may reverse or modify [an administrative
body's] decision if substantial rights of the appellant have been prejudiced because
the administrative findings, inferences, conclusions[,] or decisions are affected by
other error of law." Id. (second alteration in original) (quoting Muir v. C.R. Bard,
Inc., 336 S.C. 266, 282-83, 519 S.E.2d 583, 591 (Ct. App. 1999)).

Analysis

I. Section 58-5-10(4)

Appellants assert the Commission erred in finding Respondents did not operate as
a public utility. Their primary argument is that "the language of Section
58-5-10(4) [of the South Carolina Code (2015)] plainly and unambiguously
provides that all that is required for an entity to be a regulated public utility is for
the entity to supply water or wastewater to a portion of the public for
compensation, and therefore, Respondents' conduct made them a regulated public
utility." We disagree.

"to the district court for consideration in the first instance." See Zito v. Strata
Equity Grp., Inc., No. 22-1877, 2023 WL 8712054, at *2 (4th Cir. Dec. 18, 2023)
(per curiam).
By statute, the Commission governs public utility rates and services:

The Public Service Commission is hereby, to the extent
granted, vested with power and jurisdiction to supervise
and regulate the rates and service of every public utility
in this State, together with the power, after hearing, to
ascertain and fix such just and reasonable standards,
classifications, regulations, practices and measurements
of service to be furnished, imposed, observed and
followed by every public utility in this State and the State
hereby asserts its rights to regulate the rates and services
of every "public utility" as herein defined.

S.C. Code Ann. § 58-5-210 (2015). The questions before us involve the statutory
definitions of "public utility" and "public or any portion thereof":

(4) The term "public utility" includes every corporation
and person delivering natural gas distributed or
transported by pipe, and every corporation and person
furnishing or supplying in any manner heat (other than
by means of electricity), water, sewerage collection,
sewerage disposal, and street railway service, or any of
them, to the public, or any portion thereof, for
compensation; provided, however, that a corporation or
person furnishing, supplying, marketing, and/or selling
natural gas at the retail level for use as a fuel in
self-propelled vehicles is not a public utility by virtue of
the furnishing, supplying, marketing, and/or selling of
natural gas and a corporation or person whose only
purpose is the furnishing, supplying, marketing, and/or
selling of treated effluent for irrigation purposes is not a
public utility by virtue of the furnishing, supplying,
marketing, and/or selling of treated effluent if the effluent
is not permitted for consumption by a regulatory agency.

(5) The term "public or any portion thereof" means the
public generally, or any limited portion of the public,
including a person, private corporation, municipality, or
any political subdivision of the State for which the
service is performed or to which the commodity is
delivered and whenever such corporation or person
performs a service or delivers a commodity to the public,
or any portion thereof, for which compensation is
required such corporation or person is hereby declared to
be a public utility subject to the jurisdiction and
regulation of the Public Service Commission, the Office
of Regulatory Staff, and Articles 1, 3, and 5 of this
chapter to the extent of its activities within the State.

S.C. Code Ann. § 58-5-10(4), (5) (2015) (emphases added).

"The cardinal rule of statutory construction is to ascertain and effectuate the intent
of the legislature." Hodges v. Rainey, 341 S.C. 79, 85, 533 S.E.2d 578, 581
(2000). "Where the statute's language is plain and unambiguous, and conveys a
clear and definite meaning, the rules of statutory interpretation are not needed and
the court has no right to impose another meaning." Id. "Only where the language
of an act gives rise to doubt or uncertainty as to legislative intent may this Court
search for that intent beyond the borders of the act itself." Creswick v. Univ. of
S.C., 434 S.C. 77, 82, 862 S.E.2d 706, 708 (2021). "The best evidence of
legislative intent is the text of the statute." Id.

We view the statute at issue as plain and unambiguous and, like the Commission,
see nothing in this record to establish that Respondents furnished or supplied water
or sewer to Appellants for compensation. While Respondents do not dispute that
they receive service through Berkeley County Water & Sanitation, Charleston
Water System, and Spartanburg Water System, they persuasively argue that they
merely provide an allocation method and billing function rather than the services
themselves.

Appellants rely on Anchor Point, Inc. v. Shoals Sewer Co. to support their position
that Respondents operate as public utilities, but this case is easily distinguished
from the matter before us. 308 S.C. 422, 418 S.E.2d 546 (1992). In Anchor Point,
our supreme court considered whether, under section 58-5-10(4), a nonprofit
organization created to provide sewerage to condominiums was a public utility
subject to Commission regulation. Id. at 425-27, 418 S.E.2d at 547-49. Although
the sewerage was provided on a not-for-profit basis, the supreme court concluded,
"Based on the facts before us and the broad language of the statute, we think that
Shoals Sewer is a public utility as it serves a limited portion of the public." Id. at
426, 418 S.E.2d at 548. But Anchor Point did not involve a mere submetering or
allocation arrangement because the homeowners' association in that case owned
and operated that sewer plant system. Id. at 424, 418 S.E.2d at 547.
Distinguishing Anchor Point from Appellants' case, the Commission explained,
"[Respondents] do not have any monopoly rights over any service area; do not own
any large, capital-intensive utility infrastructure; and do not seek or obtain any
guaranteed rate of return on the pass-through billing of water and sewer services."

Still, based on definitions of "supply" and "furnish," Appellants argue Respondents
were furnishing and supplying water and sewerage to Appellants and other tenants:

Respondents provided pipes between the area-wide
utility connection and fixtures in the apartments that
made water and sewerage available to Appellants and
other tenants for their use. Respondents were taking
water from the area-wide utility into pipes owned by
Respondents, transporting that water to faucets, shower
heads, and other outlets owned by Respondents, and
providing the water to Appellants and the other tenants at
those outlets. Similarly, Respondents were accepting
wastewater into pipes owned by Respondents and using
those pipes to transport the wastewater to sewer pipes
owned by area-wide utilities.

Although this is a creative argument, we agree with Respondents that mere
"ownership of the pipes that water and sewerage pass through, without the ability
to control the flow of service" does not constitute ownership of the water and
sewerage.2

Next, based on a common definition of "compensation," Appellants argue
Respondents were providing water and sewerage for compensation because in
addition to their water and sewer allocation formula charge, tenants were charged a
monthly service fee. Appellants further claim that because they were never able to
engage in full discovery before the Commission, they do not know if Respondents
are making a profit by charging more for the water than they pay for it. Yet, the

2
It is undisputed that Respondents lack "the ability to turn off water or sewer
service to individual tenants." They further lack "the ability to control the flow of
water or sewer service in a tenant-specific capacity and therefore could not
exercise control of the commodities."
record includes an affidavit from Andrew Gordon, chief operating officer of parent
company Strata Equity Group, stating Respondents "contracted with the third-party
billing company, Conservice, to recover the actual costs of water and sewer
services to its tenants through an allocation formula method on a not-for-profit
basis." And as previously noted, the Audubon lease includes a "Utility and
Services Addendum," providing water and sewer utilities "will be billed by the
service provider to us and then allocated to you based on the . . . the number of
persons residing in your dwelling unit." Similarly, the Veridian leases include a
"Utility and Services Addendum," providing water and sewer "will be billed by the
service provider to us and then allocated to you based on . . . a combination of
square footage of your dwelling unit and the number of persons residing in your
dwelling unit."

Also helpful to our analysis is the Utility Management & Conservation
Association's (UMCA) letter opposing Appellants' position:

A utility allocation method, also known as Ratio Utility
Billing Systems (RUBS), is an alternative method of
tenant billing of utilities, in contrast to sub-metering (a
method used to measure actual utility usage), as a means
of recovering the utility expense billed by a utility
provider to a landlord for usage consumed by the tenants.
RUBS is a common practice used by property owners
nationwide that divides the utility expense proportionally
between the tenants based on a mutually agreed-upon
formula . . . . Due to the nature of utilities and outdated
building infrastructure, RUBS is the most cost-efficient
utility allocation mechanism for many buildings that lack
a preexisting sub-meter infrastructure. In such buildings,
the addition of sub-meters is often cost prohibitive, or
simply infeasible. The use of RUBS does not provide a
means for a landlord to profit from its utility billing to
tenants, but simply a means of reimbursement of utility
costs borne by tenants, yet assessed against landlords.

(footnote omitted).

Finally, Appellants argue Respondents benefited from providing water and
sewerage to Appellants and other tenants because they billed tenants for usage in
common areas such as the leasing office, gym, pool, and irrigation system. This is
a reasonable argument, but it does not change the analysis of whether Respondents
"furnish" or "supply" water or sewerage. In sum, we see no error in the
Commission's ruling that under the plain language of section 58-5-10(4),
Respondents did not operate as a public utility.3

II. Deviation from Prior Orders

Appellants next argue the Commission's decision was arbitrary and capricious
because it deviates from prior orders without a reasoned basis for such deviation.
With some effort, we were able to locate some of the referenced orders via the
Commission's docket management system. And we note that in its September 10,
2021 order initially dismissing the federal action without prejudice, the district
court recognized:

The parties disagree as to the meaning and effect of In re
Rule to Show Cause on Submeterers, wherein the
Commission vacated its prior Order No. 1999-[307] "in
which this Commission ordered a rulemaking to
determine specific requirements for certification and
regulation of submeterers." 2003 WL 23325952. In the
prior Order No. 1999-[307], the Commission stated "[w]e
believe that landlords and companies that submeter and
bill tenants for water and/or wastewater services are
indeed public utilities, and should be certified by this
Commission." In re Generic Proceeding Related to
Sub-Metering of Electric, Water and Wastewater
Services, Order No. 1999-307 (S.C.P.C. May 4, 1999),
filed at ECF No. 17-5 at 5. Because the Commission
specifically vacated Order No. 1999-[307] in Order No.
2003-214, Defendants assert that the Commission has
determined that apartment complexes are not public
utilities.

3
Appellants further assert that to the extent section 58-5-10(4) might be
ambiguous, the Commission erred in finding Respondents did not operate as a
public utility. Because neither Appellants nor Respondents actually argued the
statute is ambiguous—and because the Commission made no such finding—we
decline to address any question of ambiguity.
Zito, No. 2:20-CV-3808-BHH, 2021 WL 4137553, at *3 n.4 (emphasis added).
Thus, we find the Commission's decision was neither arbitrary nor capricious and
did not deviate from prior orders without a reasoned basis.

III. Findings of Fact

Finally, Appellants argue the Commission erred in making factual findings not
supported by substantial evidence and immaterial under section 58-5-10(4) and its
own prior orders. Again, we disagree.

In Order 736, the Commission made the following findings of fact:

1. [Respondents] do not have water or sewer submetering
infrastructure in either apartment building at issue in this
proceeding.

2. [Respondents] contracted with a third-party billing
provider, Conservice, to provide the billing functions for
water and sewer service to resident units, and did not bill
tenants directly, nor did [Respondents] contract directly
with any utility providers for service to resident units.

3. [Respondents] contracted with Conservice to recover
the actual costs of water and sewer services to its tenants
through an allocation formula method on a not-for-profit
basis.

4. [Respondents] do not have any monopoly rights over
any service area; do not own any large, capital-intensive
utility infrastructure; and do not seek or obtain any
guaranteed rate of return on the pass-through billing of
water and sewer services.

5. The water and sewer services are provided to the
properties by local utilities and [Respondents] never take
possession of the water and lack the ability to disconnect
the water or sewer service to an individual tenant for
non-payment.
6. [Respondents] are not operating a public utility that is
subject to the jurisdictional authority of the Commission.

The Commission then concluded, "Merely providing metering services and a
billing function is not sufficient activity to be considered a 'public utility' as
defined in [section 58-5-10(4) of the South Carolina Code]. Such an arrangement
does not subject the submeterer to the jurisdiction of the Commission." This legal
conclusion is sound, and substantial evidence supports the Commission's factual
findings.

Conclusion

Appellants receive service through municipal utility systems; Respondents provide
a billing function. As the substantial evidence in the record supports the
Commission's findings and the Commission properly found it lacked subject matter
jurisdiction, the orders of the Public Service Commission are

AFFIRMED.

KONDUROS and VINSON, JJ., concur.