2006 Summaries of PUC Court Decisions

First Quarter

No cases reported.

Second Quarter

Jarret N. Cohane v. Pa. PUC

No. 2056 C.D. 2005 (Pa. Cmwlth. 2006) (filed April 13, 2006).
In an unreported memorandum opinion, the Commonwealth Court affirmed the Commission’s dismissal of Cohane’s complaint against PECO Energy (PECO).  In March 2004, the Commission received Cohane’s complaint against PECO alleging that PECO refused to honor or return three checks submitted as payment.  PECO had designated Cohane’s account as cash only after receiving two checks returned for insufficient funds in a 12-month period but lifted the cash-only designation two months before Cohane filed his complaint.  The Commission adopted the ALJ’s decision to dismiss the complaint because the cash-only restriction issue was moot and denied the damages claim because of improper forum. 

On appeal, Cohane contended that the Commission erred in determining it lacked jurisdiction to award damages based on (1) whether the cash-only designation of his account was moot and (2) whether the Commission’s actions constituted reasonable, adequate and sufficient service pursuant to 66 Pa.C.S. §1501.  The Commonwealth Court found the cash-only account issue was clearly moot since no actual case or controversy existed at the time the complaint was filed.  Second, the Court found that the Commission lacks the authority to award damages for a public utility’s violation of its statutory duty under the Public Utility Code; it may only determine whether the public utility violated its statutory obligations.  Therefore, the Commission lacked jurisdiction to award damages resulting from PECO’s actions.  Cohane also argued that PECO failed to inform him of its policies, which the Commission rejected and found as credible PECO’s evidence that it notified Cohane orally and in writing of the account restriction.  Finally, the Commission concluded that PECO’s actions were not inconsistent with the Commission’s regulations and therefore, PECO provided adequate, reasonable and sufficient service.

Philadelphia Gas Works on its own behalf and by the Philadelphia Facilities Mgmt. Corp. v. Pa. PUC

No. 1673 C.D. 2005, 2006 Pa. Commw. LEXIS 214, 898 A.2d 671 (Pa. Cmwlth. 2006)(filed May 5, 2006).
The Commonwealth Court affirmed the Commission’s denial of the petition for review filed by Philadelphia Gas Works (PGW) and Philadelphia Facilities Management Corporation (PFMC). The Commission had denied PGW’s petition for reconsideration of the Commission’s disapproval of PGW’s Senior Citizen Discount Program (SCD), whereby consumers 65 years of age whose household income does not exceed 250% of the federal poverty level for a two-person family received a 20% discount, pursuant to 66 Pa.C.S. §2212(r)(1) which allows the Commission to approve SCD programs provided that the rates and terms are just and reasonable.  The Administrative Law Judge approved the SCD program. However, the Commission denied approval because (1) the utility was in a dire financial situation and the number of “good paying” customers was decreasing (2) more than 1,300 households would enroll in the SCD program each year; (3) the program would cost PGW’s other customer over $3.8 million per year; and (4) the program would give a discount to senior citizens who have the ability to pay their full bills. 

The Commonwealth Court held that the Commission’s denial of the SCD program complied with 66 Pa.C.S. §2212(r)(1). PGW also argued that Commission usurped the power of the City of Philadelphia in its denial of the SCD program under section 2212(s) of the Code, which preserves a city’s powers with respect to powers, functions, budgets, activities and mission of its natural gas operation.  The Court disagreed because this section does not preserve any rate-making powers for cities.  Rather, section 2212(r)(1) gives the Commission the power to approve or disapprove the program because the SCD program involves rate-making.  Finally, the Court found substantial evidence in the record to support the denial and affirmed the Commission’s order.

Jamie W. Goncharoff v. Pa. PUC

No. 1674 C.D. 2005 (Pa. Cmwlth. 2006) (filed May 12, 2006).
In an unreported memorandum opinion, the Commonwealth Court quashed Goncharoff’s appeal after the Commission’s granted Verizon Pennsylvania Inc.’s (Verizon) motion for judgment on the pleadings.  Goncharoff alleged Verizon’s failure to notify the public of its 30 cent charge for Connect ReQuest Service in its directory assistance message constituted unreasonable and inadequate service under 66 Pa.C.S. §1501 (every utility must provide efficient, safe, and reasonable service and facilities).  After Goncharoff served written discovery requests on Verizon, Verizon filed a motion for judgment on the pleadings, asserting that it provides adequate notice of the charge for Connect ReQuest in the white pages of its telephone directory.  The Commission adopted the Administrative Law Judge’s recommendation to grant Verizon’s motion because there were no material facts at dispute, since Goncharoff admitted awareness of the notice in his complaint ; the Commission resolved this issue in Verizon’s favor in two other cases; and, Goncharoff lacked standing. 

On appeal, the Commonwealth Court found that it was unclear how the Commission’s order directly harmed Goncharoff so as to render him an “aggrieved person” for the purposes of standing. Goncharoff had admitted notice of the charge and was never charged for the service. Thus, Goncharoff could not pursue the matter on behalf of the public at large and lacked standing to appeal because he was not directly harmed by the Commission’s order. Therefore, the Court quashed Goncharoff’s petition for review. As a result, the Court did not address Goncharoff’s substantive argument regarding the whether Verizon provides reasonable and adequate notice for its Connect ReQuest Service charge and the procedural argument regarding the ALJ’s violation of due process by not requiring Verizon to respond to Goncharoff’s discovery request or conducting a hearing, noting that these arguments lacked merit.

Osborne-Davis Transportation Co., Inc. v. Pa. PUC

No. 1520 C.D. 2005 (Pa. Cmwlth. 2006) (filed May 23, 2006).
In an unreported memorandum opinion, the Commonwealth Court vacated the Commission’s order and remanded to the Commission to consider Osborne-Davis’ petition for reinstatement of its certificate of public convenience.  On April 20, 2001, the company did not respond to a complaint for failure to maintain proof of insurance, and the Commission sustained and revoked its certificate.  On December 6, 2004 the company filed its reinstatement petition. In response, the Commission used a five-factor analysis.  First, the Commission found that the time lapse of more than three years between revocation and the reinstatement request (the first factor) weighed strongly against reinstatement.  The Commission also concluded the company did not elaborate on measures taken to prevent future violations (the fourth factor), which also weighed against the company.  Next, the Commission determined that the company was not prepared to properly resume operations because it had not filed proof of current insurance (the fifth factor), which also did not favor reinstatement.  Finally, the Commission concluded that company did provide a reasonable excuse and the complaint was the only evidence of failure to comply with Commission regulations, both of which supported reinstatement.  However, the Commission denied reinstatement.  The Commission declined to provide a rehearing under 66 Pa.C.S. §703(f) or the notice and opportunity to be heard allowed under 66 Pa.C.S. §703(g).

On appeal, the Commonwealth Court found that the Commission acted in an unpredictable or capricious manner when it denied the reconsideration petition. The Court found that the company appeared to have satisfied the certification requirements, which was not identified as a factor by the Commission.  Since Osborne-Davis had no reason to believe that filing an insurance form was a precondition to grant of reinstatement, and further supplied documents indicating it did have insurance, the Court concluded that the Commission abused its discretion in denying the company’s petition for reinstatement.  Further, the Commission must provide due process under section 703(g) and conduct a hearing before declining to grant reconsideration. Finally, the court noted that the Commission misapplied the five-factor analysis because Osborne-Davis was prepared to offer new evidence of its new procedures and that the lapse of time between cancellation and request for reinstatement was reasonable.

Ira S. Davis Storage Co., Inc. v. Pa. PUC

No. 1676 C.D. 2005 (Pa. Cmwlth. 2006) (filed May 23, 2006).
In an unreported memorandum opinion, the Commonwealth Court vacated and remanded the Commission’s order denying the company’s petition for reconsideration of its certificate of public convenience as a common carrier of household goods.  The Commission filed a complaint alleging that Ira S. Davis Storage Co., Inc., trading as A-Apollo Transfer, Inc. (Apollo) failed to pay its annual assessments to the Commission for years 1992 through 1996, in violation of 66 Pa.C.S. §510(c).  The company failed to answer the complaint and the Commission cancelled its certificate of public convenience.  The Commission denied a reinstatement request and noted that it had filed another complaint against the company for conducting household moves without a certificate of public convenience. The company paid the fine and the complaint was withdrawn, but still had an outstanding assessment.

Using a five factor analysis in considering the reinstatement request, the Commission found that: (1) the greater than three-year delay between Apollo’s violation and the time it filed its petition weighed heavily against granting reinstatement; (2) the company’s violation history was not significant and weighed in its favor; (3) the explanation for the delay was reasonable; (4) insufficient measures were taken to resolve violation problems, which did not weigh in Apollo’s favor; and, (5) Apollo was not current on its assessments. The Commission did not grant the reinstatement but stated it would revisit the matter after the company paid its outstanding assessments. Apollo filed a petition for reconsideration, which the Commission denied for failure to raise new legal arguments. The Commonwealth Court found that the Commission’s application of the five-factor test was unpredictable and its actions were capricious. Furthermore, section 703(g) allows the Commission to amend a reinstatement order and section 703(f) provides for rehearing when a party offers new information or evidence. Since Apollo offered information regarding its operation and to pay its outstanding assessments, the Commission should have provided a forum for the company to offer more details concerning its operational changes and make arrangements to pay overdue assessments. Therefore, the Commission’s order denying reconsideration constituted an abuse of discretion.

Third Quarter

Metropolitan Edison and Pennsylvania Electric Company v. Pa. PUC

No. 2404 C.D. 2003 (Pa. Cmwlth. 2006) (filed July 19, 2006).
In an unreported memorandum opinion, the Commonwealth Court affirmed the Commission’s order requiring Metropolitan Edison and Pennsylvania Electric Company (Electric Companies) to retroactively adjust their accounting entries for stranded cost recovery, as if their Settlement Stipulation had never been approved by the Commission. The Electricity Generation Customer Choice and Competition Act (Competition Act) allowed electric companies to recover stranded costs through a competitive transition charge (CTC), subject to a rate cap. Every electric company was also required to file a restructuring plan explaining its compliance with the Competition Act, subject to approval by the Commission. After the Commission approved the Electric Companies’ merger, they sought a rate increase pursuant to the Competition Act, or an immediate rate cap increase of $316 million per year. Intervenors opposed the merger and Electric Companies’ requests. The parties failed to reach a consensus, and the Electric Companies proposed a “Settlement Stipulation,” which the Commission adopted in 2001. However, Commonwealth Court voided the Stipulation Settlement and reversed the Commission’s order in ARIPPPA v. Pa. PUC, 892 A.2d 636 ( Pa. Cmwlth. 2002) after multiple parties appealed. In response to the decision, the Commission ordered the Electric Companies to reverse any accounting changes made pursuant to the Settlement Stipulation.

In the current appeal, the Commonwealth Court held that the Commission complied with its order directing the Electric Companies to return revenues collected for the distribution and transmission rates to the same levels that existed before the Settlement, thereby ensuring customers were placed back in the same position before the rate change occurred. Furthermore, the Commission guaranteed that when the amount of stranded costs they received was settled, the Electric Companies could collect for any deficiencies. The Court also disagreed with the Electric Companies that the Commission can only change approved rates prospectively and are not subject to retroactive adjustment, since the rates previously approved by the Commission were not legal.

William R. Lloyd, Jr., OSBA; Irwin A. Popowsky, OCA; Commission on Economic Opportunity & PP&L Industrial Customer Alliance v. Pa. PUC

No. 137 C.D. 2005, No. 144 C.D. 2005, No. 275 C.D. 2005, No. 884 C.D. 2005 2006 Pa. Commw. LEXIS 438, 904 A.2d 1010 (Pa. Cmwlth. 2006)(filed August 4, 2006).
The Commonwealth Court vacated the Commission’s order granting rate increases for transmission and distribution rates and remanded to the Commission for the setting of non-discriminatory reasonable rates and rate structure for each service; reversed the order allowing reimbursement of Hurricane Isabel costs; and affirmed the Commission’s decision regarding funding for the Sustainable Energy Fund (SEF) and low income customer assistance program. Four consumer advocacy groups petitioned for review of the Commission’s order granting PPL Electric Utilities Corporation (PPL) an increase in its retail distribution and transmission rates and reimbursement for certain costs incurred after Hurricane Isabel, as well as approved funding for certain public service programs. The petitioners filed numerous complaints against the rate increases and after many hearings, the Commission adopted the Administrative Law Judge’s recommendation to allow the increases. PPL had filed for the rate increase while the rate caps imposed by the Electricity Generation Customer Choice Act were still in effect.

The Commonwealth Court found no dispute that there was a substantial cost differences for delivery services between classes. However, the rate difference had to be justified in order to survive a discriminatory rate challenge under 66 Pa.C.S. §1304 (no public utility shall establish or maintain any unreasonable difference as to rates between localities or classes of service). The Court held that Commission’s single justification of “gradualism” did not explain how the discriminatory rate structures would be gradually alleviated. Furthermore, permitting gradualism to trump all other ratemaking concerns without sufficient explanation was not in accord with the Competition Act. Finally, the court also found that the extraordinary rate relief provision under 66 Pa.C.S. §1308(e) did not provide for reimbursement during the rate period for storm expenses, and no exception under 66 Pa.C.S. §2804(4)(iii) applied. However, the Court found that the Commission’s decisions for continued funding for SEF low income public services programs were statutorily authorized.

Ellsworth Pendleton and Patty Tucker v. Pa. PUC

No. 519 C.D. 2006 (Pa. Cmwlth. 2006) (filed August 29, 2006).
In an unreported memorandum opinion, the Commonwealth Court affirmed the order of the Commission dismissing the complaint. Pendleton and Tucker (Complainants) alleged that PPL Electric Utilities Corporation (PPL) is required to accept as payment for services a financial statement purportedly transferring debt owed Complainant Pendleton to PPL. PPL answered that Complainants failed to set forth any objections to the reasonableness, adequacy, or sufficiency of PPL’s service and that the Commission lacked subject matter jurisdiction. PPL also averred the complaint failed to state a cause of action. The Complainants countered that PPL was required by law to accept as payment for services a “UCC Financing Statement Amendment,” which purportedly assigned $1,100 on demand, which was due to Complainant Pendleton from Oakview Terrace Condominium Association. The Commission affirmed the ALJ’s dismissal of the complaint.

On appeal, the Commonwealth Court agreed that the Commission lacked subject matter jurisdiction and that the complaint failed to state a cause of action. The Court noted that the Commission possesses only those power expressly conferred on by statute, specifically 66 Pa.C.S. §701, which authorizes it to hear complaints regarding Code violations, applicable regulations, or an order. In addition, 66 Pa.C.S. §1501 places the range of the Commission’s subject matter under its control as responsibility for the adequacy, efficiency, safety, and reasonable of public utility services. Although the Commission has authority to decide what constitutes reasonable payment for services, its jurisdiction does not include questions of law regarding whether an instrument is negotiable under the UCC. Furthermore, the complaint failed to state a cognizable claim because Complainants did not allege that they offered the instrument as payment for services and PPL refused to accept it. Therefore, the necessary factual allegations were absent and the Commission properly dismissed the complaint.

City of Lancaster (Sewer Fund) v. Pa. PUC

No. 1968 C.D. 2005 (Pa. Cmwlth. 2006) (filed August 30, 2006).
In an unreported memorandum opinion, the Commonwealth Court affirmed in part and reversed in part the Commission decision in the rate case filed by City of Lancaster (Sewer Fund). The City of Lancaster (City) appealed the Commission’s order rejecting the City’s proposed jurisdictional rate increase. The City, a municipal corporation, owns and operates two waste water collection systems, one within its municipal boundaries and one located outside its municipal boundaries. The City filed Supplement No. 31, which proposed rates that would increase annual jurisdictional operating revenues to $650,465, or 55.4% over existing revenues. The Office of Consumer Advocate (OCA) filed a complaint and the ALJ recommended that the Supplement be rejected because its rates were unjust and unreasonable. The ALJ further recommended that the City be directed to file a tariff that allowed for recovery not in excess of $89,693 (or 7.64% over existing revenues). The Commission agreed with the ALJ’s conclusion, and the City appealed.

On appeal, the Commonwealth Court held that while the Commission did not err in adopting the OCA’s cost of service methodology, the record lacks substantial evidence to support the conclusion that the Maple Grove pumping station serves the City’s combined sewer system in addition to jurisdictional customers. In regard to post-test year debt expense, the Court agreed that the Commission did not abuse its discretion in limiting debt expense to that set forth by the City in its test year data. The Commission reasoned that consideration of those post-test year debt expenses would be inconsistent with the test year concept in which revenues, expenses and capital costs are to be simultaneously reviewed for the same time period. In regard to the City’s claim that the Commission’s analysis failed to consider certain cash flow items that affect its debt coverage ratios, the court remanded those issues to the Commission to give the agency and opportunity to explain its decision on these contentions. Finally, the court determined that the Commission did not err in rejecting the City’s revised depreciation study. The Commission credited the expert testimony presented by OTS that the City’s approach would have caused ratepayers to overcompensate the City for its assets.

Marla S. Brown v. Pa. PUC

No. 1331 C.D. 2005 (Pa. Cmwlth. 2006) (filed September 27, 2006).
In an unreported memorandum opinion, the Commonwealth Court affirmed the order of the Commission adopting as modified the Initial Decision of Special Agent Rumsey and dismissed Brown’s formal complaint. Brown filed a formal complaint against PECO Energy Company (PECO) after she received bill for $700 consistently for several months; that someone else was using her electricity; and, she was unable to pay her bills. PECO investigated the matter and testified to its findings at a hearing conducted by Agent Rumsey, who determined that Brown failed to demonstrate that she was billed for service in excess of her usage and failed to establish a prima facie case of high billing. Therefore, Agent Rumsey denied the complaint and ordered that PECO bill Brown according to a payment schedule and restricted PECO from suspending or terminating service except for valid safety or emergency reasons. The Commission modified the Agent Rumsey’s decision, directing PECO to bill Brown for all missed payments pending appeal, and dismissed Brown’s formal complaint.

On appeal, Brown contended that PECO did not adequately investigate her complaint and violated her First Amendment right to be secure in her home because the investigator did not inspect both the exterior and interior of her house. The Commonwealth Court found that Brown’s arguments had no merit because the investigations were properly conducted and the constitutional protections in the Fourth Amendment, rather than the First Amendment, do not extend to searches and seizures made by a non-governmental entity acting on its own behalf.

Fourth Quarter

Susquehanna Area Regional Airport Authority v. Pa. PUC

No. 2516 C.D. 2005, 2006 Pa. Commw. LEXIS 618, 911 A.2d 612 (Pa. Cmwlth. 2006)(filed November 21, 2006).
The Commonwealth Court reversed the Commission’s order sustaining a complaint filed by Capital City Cab Service. Capital City had alleged that SARAA exceeded its authority by demanding cab companies obtain $1.5 million in insurance coverage and that SARAA wrongfully terminated Capital City’s contract for outbound service. The Commission adopted the Administrative Law Judge’s decision, which found that the exclusive agreement between SARAA and American Taxi had unduly restricted Capital City’s ability to provide outbound service at the airport. The Commission also found that SARAA had forced Capital City to abandon a portion of its service territory, thereby infringing upon the Commission’s exclusive authority to license common carriers. Finally, the Commission indicated that it had authority to prohibit American Taxi from further participation in the exclusive agreement with SARAA.

The Commonwealth Court found that SARAA acted within the powers granted to it by the Municipal Authorities Act. The Court stated that the Commission’s position that every taxicab company must have equal access to the airport parking garage because each holds a certificate of public convenience for a specific territory lacks foundation in law, citing a 1905 United States Supreme Court decision that held that the owner of a train station could enter into an exclusive lease of a carriage stand on property owned by the station. Donovan v. Pennsylvania Company, 199 U.S. 279 (1905). The Commonwealth Court specifically held that the Commission lacked authority to direct either SARAA or American Taxi to abandon respective rights and obligations under the exclusive agreement. The Commonwealth Court also found that while a certificate of public convenience provides a common carrier with entry to a discrete territory, a reduction in a common carrier’s service does not require the Commission’s approval unless it is the common carrier who wishes to do so, noting that the Public Utility Code does not regulate involuntary abandonment. The Court also found that there was no actual disagreement on the issue of whether SARAA may require insurance in excess of the minimum required by the Commission, noting that the Commission in its decision concluded that insurance requirements in excess of the statutory minimum are a matter of contract not regulation.

Irwin A. Popowsky, Consumer Advocate v. Pa. PUC

No. 19 MAP 2005, 589 Pa. 605, 2006 Pa. LEXIS 2261, 910 A.2d 38 (Pa. 2006)(filed November 21, 2006).
The Supreme Court of Pennsylvania affirmed the order of the Commonwealth Court which had affirmed the Commission’s dismissal of complaints filed by Cindy Parks and the Office of Consumer Advocate (OCA) against Pennsylvania-American Water Co. (PAWC). The complaints alleged that the town of Hickory in Mount Pleasant Township had an inadequate quantity and quality of water and requested that PAWC be required, at PAWC’s sole expense, to extend its water service into the Township. The complainants further alleged that PAWC was in violation of section 1501 of the Public Utility Code that requires public utilities to extend water lines “as shall be necessary ... for the accommodation, convenience and safety of its patrons, employees, and the public.” PAWC’s answer asserted that it would extend service to bona fide service applicants if the terms of its tariff were satisfied. Per its tariff and Commission regulations, PAWC claimed that it was obligated to expend $6,200 per bona fide service applicant with the remainder of the costs to be borne by the service applicants. In denying the complaints, the Commission rejected the OCA’s argument that the demonstration of public need alone required the extension of water lines at the utility’s expense.

The questions on appeal before the Supreme Court of Pennsylvania involved the proper interpretation of the Public Utility Code and the validity of the line extension regulations promulgated by the Commission. The Supreme Court found that the Commission’s interpretation of 52 Pa. Code §65.21 was correct and consistent. The Supreme Court held that the Commission was authorized, per section 1504, to adopt line extension regulations that accounted for economic factors. The Court went on to find that there was nothing arbitrary or unreasonable in the Commission fixing the point at which the utility could be deemed to suffer a material economic harm from a mandated line extension as that point where the utility would face an out-of-pocket loss. For it is that point where the utility would be forced to either absorb the loss or pass it on to existing customers. Accordingly, the Court held that the line extension regulations were reasonable.

Madam Justice Newman wrote a dissenting opinion, stating that she believed the Commission’s determination to be fundamentally flawed. Justice Newman specifically stated that the regulations conflicted with the duty of every utility to provide service to the public where a need for the service has been demonstrated, citing 66 Pa.C.S. §1501. Justice Newman found that the Commission erred in failing to analyze whether the total revenues and expenses from the line extension would produce an impermissible rate of return or financial harm to the utility. Justice Newman noted that the distinction between securing a fair return and maintaining the current level of profitability had not been explored and thus, would remand the matter to determine whether the line extension would have a detrimental effect on the utility’s total return on investment.

PPL Electric Utilities Corp. v. Pa. PUC

No. 272 C.D. 2006, 2006 Pa. Commw. LEXIS 665, 912 A.2d 386 (Pa. Cmwlth. 2006)(filed December 6, 2006).
The Commonwealth Court affirmed the Commission’s order directing PPL to cease and desist from violating its tariff and section 1303 of the Public utilities Code. Commercial Utility Consultants and Pennsylvania Utility Service Corp. had filed complaints against PPL in the Court of Common Pleas, in which the parties agreed to refer the following issues to the Commission under the doctrine of primary jurisdiction: (1) whether PPL properly calculated the 500 MW cap for its interruptible rates; (2) whether PPL properly interpreted its Industrial Development Initiatives Rider; (3) whether PPL was permitted to provide marketing support and customer account information to an unregulated joint venture; and (4) whether, by mutual agreement, PPL and a customer can end an interruptible service contract prior to the one year minimum outlined in PPL’s tariff.

The Commonwealth Court found that the Commission properly applied the rules of statutory construction when it interpreted PPL’s tariff. The Court noted that a tariff, like a statute, must be construed so as to give effect to all of its terms, and when the words are clear and free from ambiguity, they are not to be disregarded under the pretext of pursuing its spirit. The Court held that when a tariff is plain on its face, the Commission need not and cannot look beyond the four corners of the tariff to determine its meaning. The Court went on to find that deviation from an approved tariff is not permitted under any pretext, even by mutual agreement of the utility and customer. The Court also held that if the language of the tariff is clear, the utility must apply it uniformly to its customers. Finally, the Court found that where a public utility, by agreement with an unregulated affiliate, agrees to engage in a practice which has the potential or tendency to affect the cost of generating electricity, then it is within the Commission’s jurisdiction to oversee. The Court held that the Commission’s need to regulate non-utility services was justified where it protected ratepayers from abuse, as the Commission has broad and flexible authority to find a contract’s terms “unjust, unreasonable, inequitable, or otherwise contrary or adverse to public interest...” per 66 Pa.C.S. §508.

Alex Sterin, t/a Camden Cleaning services v. Pa. PUC

No. 215 C.D. 2006 (Pa. Cmwlth. 2006)(filed November 16, 2006).
In an unreported memorandum opinion, the Commonwealth Court affirmed the Commission’s order authorizing PECO Energy Company (PECO) to “back bill” Mr. Sterin’s accounts for unmetered electric usage. Mr. Sterin operates laundry services at four locations in Philadelphia. Based on information obtained from an FBI investigation regarding utility meter tampering, PECO discovered evidence of tampering at Mr. Sterin’s four laundromats. PECO immediately replaced the meters, after which they recorded a 400% average increase. PECO back billed Mr. Sterin’s accounts for the period from October 12, 1999 through January 13, 2003, based on the daily average use following instillation of the new meters. Mr. Sterin filed a complaint against PECO, alleging improper billing. At hearings held before an ALJ, Mr. Sterin testified that a free drying promotion offered at the time the new meters were installed caused the increase in electric usage. Mr. Sterin offered gas bills purportedly showing a similar increase in support of his argument. The ALJ found that PECO presented insufficient evidence of meter tampering and denied PECO’s request to back bill Mr. Sterin’s accounts. PECO filed exceptions to the ALJ Decision arguing that there was sufficient evidence to support the back billing of Mr. Sterin’s accounts, which the Commission granted.

Mr. Sterin argued on appeal that the Commission’s decision was not supported by substantial competent evidence and was not sufficiently explained. The Commonwealth Court identified the following facts as supporting the Commission’s decision: (1) the PECO inspector found the lock to the meter had been cut off; (2) that Mr. Sterin’s electric consumption had quadrupled after new meters were installed; (3) that the PECO inspector found jumpers and broken seals on the meters at Mr. Sterin’s other three laundromats; and (4) that Mr. Sterin’s gas bills did not actually increase during the period that the electric usage had quadrupled. Based on these facts, the Commonwealth Court held that the Commission’s decision was supported by substantial competent evidence and that the Commission sufficiently explained why it rejected Mr. Sterin’s argument.