Valara Computing Facility Challenge Dismissed

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Public Service Commission Dismisses Challenge to Valara’s Self-Powered High-Performance Computing Facility

Article Summary: The Public Service Commission of South Carolina recently dismissed a challenge seeking to halt construction of Valara Holdings LLC’s high-performance computing facility in Spartanburg County and require the project to undergo review under the South Carolina Utility Facility Siting and Environmental Protection Act. The Commission held that it lacked subject matter jurisdiction because Valara’s proposed generating facility is designed to provide electricity solely for the company’s own use and will not furnish power for public use. The Commission further held that private parties cannot use Commission proceedings to enforce the Siting Act. The Commission subsequently denied a petition for rehearing and reconsideration.

We are pleased to announce a significant victory on behalf of Valara Holdings LLC before the Public Service Commission of South Carolina. In June 2026, several community and environmental organizations filed a Petition for Declaratory Order and Petition for Rule to Show Cause seeking to require Valara’s approximately 450-megawatt on-site generation facility to obtain a Certificate of Environmental Compatibility and Public Convenience and Necessity under South Carolina’s Utility Facility Siting and Environmental Protection Act and to halt construction pending further proceedings.

Valara moved to dismiss the petition, arguing that the Commission lacked subject matter jurisdiction because the proposed facility would generate electricity solely for Valara’s private use and would not supply electricity for public use. Valara further argued that the Siting Act does not create a private enforcement mechanism allowing private parties to compel compliance through Commission proceedings.

Following briefing and oral argument, the Commission granted Valara’s Motion to Dismiss. In a detailed order addressing an issue of first impression, the Commission concluded that the Siting Act does not apply to a private self-generation facility that does not export power to the electric grid or otherwise furnish electricity for public use. The Commission held that exercising jurisdiction over such a facility would improperly expand the Commission’s statutory authority beyond that granted by the General Assembly.

The Commission also confirmed that the Siting Act vests enforcement authority exclusively in the Office of Regulatory Staff and does not authorize private parties to bring enforcement actions seeking to compel a third party to obtain a certificate or cease construction. Following issuance of the dismissal order, the petitioners sought rehearing and reconsideration. On October 8, 2026, the Commission denied that request, leaving the dismissal in place.

Fourth Circuit's Key Holdings:

No Commission Jurisdiction Over Private Self-Generation: The Siting Act does not apply where a facility generates electricity solely for its own consumption and does not furnish electricity for public use.
Limits on Agency Authority: The Commission may exercise only those powers granted by statute and cannot expand its jurisdiction through implication.
No Private Enforcement Under the Siting Act: Enforcement authority rests with the Office of Regulatory Staff, not private litigants.
Important Guidance for Data Center Development: The decision provides significant clarity regarding the regulatory treatment of large-scale behind-the-meter generation facilities supporting data centers and other private industrial operations.
Practice Implications: As data center development continues to accelerate across South Carolina and the Southeast, projects increasingly rely on dedicated on-site generation resources to meet growing power demands. This decision provides important guidance regarding the scope of the Public Service Commission’s jurisdiction and confirms that private self-generation facilities are not automatically subject to the Siting Act merely because they exceed the statute’s generation-capacity threshold. The ruling also reinforces fundamental principles governing administrative agencies and the limits of private enforcement authority under South Carolina law.

Willoughby Humphrey & D’Antoni represented Valara Holdings LLC throughout the proceeding. Andrew J. D’Antoni presented oral argument before the Public Service Commission on behalf of Valara. Andrew D’Antoni, Mitchell Willoughby, Hunter Pope served as counsel for Valara working alongside Kirkland & Ellis LLP and the Terreni Law Firm in securing dismissal of the petition and defeating the subsequent request for rehearing and reconsideration.