2009

First Quarter

Philadelphia Gas Works v. Pa. PUC

No. 1914 C.D. 2007, (Pa. Cmwlth. 2009) (filed February 4, 2009).
In an unreported memorandum opinion, the Commonwealth Court affirmed the PUC order rejecting Philadelphia Gas Works’ (PGW) proposed rate increase. In its filing, PGW proposed changes in rates, rules and regulations calculated to produce $100 million or 9.6% in additional annual revenues. PGW also requested to retain revenue derived from off-system gas sales and capacity release credits, which was estimated to be $10 million. Two ALJs issued a recommended decision rejecting PGW’s supplement and recommending that PGW receive $25 million of its requested rate increase. PGW filed exceptions. The PUC addressed PGW’s exceptions and affirmed the recommend decision.

On appeal, PGW alleged that the PUC erred in refusing to apply the Cash Flow Method, pursuant to the Gas Choice Act, 66 Pa. C.S. §§ 2201-2212, when setting PGW’s rates. The Commonwealth Court found that the PUC was not precluded from considering other statutory directives, such as the requirement set forth in the Public Utility Code, 66 Pa. C.S. § 1301, that rates be just and reasonable. The Court further found that the PUC applied the proper rate making methodology, the cash flow analysis, that the PUC had recognized that PGW had to comply with bond covenants and the PUC’s approval was consistent with the requirements of the MAO, the Gas Choice Act and the PUC code.

PGW also alleged that the PUC erred by not considering projected financial data for five years after the test year. With the exception of a scheduled repayment of a $45 million loan, the PUC did not consider the five year forecast, finding that it was based on assumptions regarding future revenues and expenses. PGW presented no legal authority for the use of a five-year forecast. The Commonwealth Court concluded that the PUC did not abuse its discretion by using the traditional test-year data.

Thirdly, PGW argued that the PUC’s determination that PGW needed only $25 million in new revenues in order to satisfy all of the elements of its mandated cash flow method was not supported by substantial evidence. The Commonwealth Court disagreed and found that the PUC’s decision was supported by substantial evidence. The PUC’s decision was based on testimony from an OCA witness that, based on the test-year data, a $25 million rate increase would provide PGW with the financial means to continue operating. The PUC’s decision also considered bond coverage levels.

The Commonwealth Court further found that the PUC did not err in applying the bad debt expense factor only to natural gas sales and not to revenues from other parts of PGW’s operation, such as late payment and reconnection charges.

Lastly, the PUC had ordered PGW to develop a mechanism to automatically adjust its actual collection of bad debt expense in base rates resulting from changes in participation in PGW’s Customer Responsibility Program (CRP). PGW alleged that the PUC erred by requiring it to track its bad debt expenses in contravention of the Public Utility Code, 66 Pa. C.S. § 1408. The Commonwealth Court disagreed and concluded that Section 1408 specifically excludes clauses associated with universal service programs. The Commonwealth Court further noted that the PUC did not direct PGW to make an automatic adjustment to its bad debt expense; rather it only directed PGW to collect data to determine the net change in CRP participation and average shortfalls for its CRP participants.

Richard Blount v. Philadelphia Parking Authority

965 A.2d 226 (Pa. 2009)(filed February 20, 2009).
The Pennsylvania Supreme Court reversed the Commonwealth Court’s determination that it lacked jurisdiction to hear the Petitioners’ challenge to the Philadelphia Parking Authority’s (PPA) regulations and remanded the case to the Commonwealth Court for resolution on the merits. The Commonwealth Court had decided that the PPA is a local agency, as opposed to a Commonwealth agency, and transferred the case to the Philadelphia Court of Common Pleas.

The Supreme Court disagreed and used a two part test in reaching its conclusion that the PPA is a Commonwealth agency: (1) whether the entity operates on a statewide basis; and (2) whether the entity is predominately controlled by the state. The Supreme Court found that the PPA operates on a statewide basis because PPA-licensed taxicabs may transport persons and property from any point in the City of Philadelphia to any point within the Commonwealth and vice-versa. The Supreme Court also found that the PPA is predominately controlled by the state because the General Assembly oversees the PPA’s budget, the Governor appoints the PPA board members and the Commonwealth Court already decides issues related to regulated, licensed taxicabs.

Jackie Stefanowicz v. Pa. PUC James Cawley, et al.

No. 511 M.D. 2008 (Pa. Cmwlth. 2009) (filed February 27, 2009).
In an unreported memorandum opinion, the Commonwealth Court sustained the preliminary objections of the Governor, Lieutenant Governor and other Commonwealth officials (Commonwealth Officials) under the doctrine of sovereign immunity.

In December 2005, a water main break damaged Stefanowicz’s residence after the Pennsylvania American Water Company (PAWC) delayed its response to the break. Stefanowicz sought monetary relief against PAWC from the PUC. A hearing was held before an ALJ. The ALJ advised her that the ALJ lacked authority to impose monetary damages and suggested that she proceed in a proper court. In February 2008, the PUC issued a decision in favor of PAWC.

During this time, Stefanowicz met with staff at the Governor’s and Lieutenant Governor’s offices. Staff members at both offices indicated that funding to repair the damage caused by the water main break would be sent to her. After funding was not sent, Stefanowicz filed a petition for review in the Commonwealth Court seeking money for the installation of a coal furnace, mold remediation and other expenses.

The Commonwealth Officials filed preliminary objections on the grounds of sovereign immunity. In response, Stefanowicz argued that the staff, through respondeat superior, were negligent in failing to obtain funding for the damages caused by the water main break to her residence and that their negligence fell within the care, custody or control of personal property exception to sovereign immunity. The Commonwealth Court disagreed and concluded that the allegations in Stefanowicz’s petition do not establish that the Commonwealth Officials had control over the funding sought by her. Accordingly, the Commonwealth Court held that this exception to sovereign immunity did not apply and dismissed her petition.

ARIPPA v. Pa. PUC

966 A.2d 1204 (Pa. Cmwlth. 2009)(filed March 3, 2009).
The Commonwealth Court affirmed a PUC order that found that an electric distribution company (EDC) owns alternative energy credits where the power purchase agreement between the EDC and the non-utility generator (NUG), which was executed before the enactment of Alternative Energy Portfolio Standards (AEPS), is silent on the issue.

In 2005, Pennsylvania Electric Company (Penelec) and Metropolitan Edison Company (Met Ed) sought a declaratory order from the PUC to determine whether the EDCs owned alternative energy credits when a power purchase agreement was executed before the enactment of AEPS. The ALJ determined that the EDCs owned the credits, since the EDCs owned the electricity once it was generated by the NUGs. Exceptions were filed, which the PUC denied, and the PUC adopted the ALJ’s opinion.

On appeal, ARIPPA argued that the Public Utility Regulatory Policies Act of 1978 (PURPA) precludes a state agency from modifying a power purchase agreement and the transfer of alternative energy credits. The Court disagreed and relied on American Ref-Fuel Company, 105 FERC ¶ 61,004 (2003), in which FERC concluded that PURPA does not preempt state law concerning the ownership of alternative energy credits. The Court further relied on Wheelabrator Lison, Inc. v. Conn. Dep’t of Pub. Util. Control, 531 F.3d 183 (2nd Cir. 2008) and In re Ownership of Renewable Energy Certificates, 913 A.2d 825 (N.J. Super. Ct. App. Div. 2007) to hold that the PUC’s determination of the ownership of alternative energy credits of a power purchase agreement silent on the issue did not violate PURPA, since the ownership of such credits was not contemplated in the contract.

ARIPPA also argued that the PUC lacked subject matter jurisdiction to determine the ownership of alternative energy credits, since it was a private contractual dispute. The Court found that the nature of alternative energy credits was unique and noted that the PUC has extensive oversight responsibilities of the credits under AEPS. 73 P.S. § 1648.3(e)(2)-(2)(i). The Court concluded that the PUC has jurisdiction to resolve the dispute, because the dispute was not a matter of ordinary contract interpretation, but a process that implicated the PUC’s particular expertise.

ARIPPA further argued that the PUC committed an error of law in determining that the EDCs own the alternative energy credits. The Court concluded the PUC’s determination that the EDCs owned the credits was persuasive and rational. The Court noted that the purpose of AEPS was to encourage the creation and use of energy from alternative sources. Because the EDC already purchased energy from a NUG, the underlying purpose of AEPS was satisfied.

Judge Pellegrini issued a dissenting opinion, in which Judge Smith-Ribner joined, and argued that the PUC did not have jurisdiction to determine the ownership of alternative energy credits under a purchase power agreement. Judge Pellegrini asserted that the PUC only had authority under 73 P.S. § 1648.3(e) to determine how the credits are created, tracked and retired.

Second Quarter

Edwin, Inc. v. Pa. PUC

No. 497 C.D. 2009 (Pa. Cmwlth. 2009) (filed April 24, 2009).
In an unreported memorandum opinion, the Commonwealth Court quashed Edwin, Inc.’s and Gerald, Marcella, Jerome and Mark Gawron’s (Petitioners) appeal of the PUC’s order remanding the case to an ALJ because it was not final and appealable. Deer Haven had filed two applications for certificates of public convenience to provide water and wastewater utility services in Pike County. Petitioners filed protests to Deer Haven’s application and amended application. Two evidentiary hearings were held and the record was closed. Petitioners filed a petition to reopen the record to submit additional evidence. In an interim order, the ALJ denied the petition to reopen and ordered Deer Haven to submit numerous required items that had not been submitted in the application or amended application. The ALJ also barred the Petitioners from contesting Deer Haven’s supplemental information, reasoning that they had waived the opportunity to contest its absence. After receiving the completed amended application, the ALJ issued a determination that Deer Haven had shown a public need for its water and wastewater services and that it had demonstrated the technical and financial ability to operate its services. Petitioners filed exceptions to the ALJ’s interim order. The PUC issued an opinion and order remanding the proceeding to the ALJ for additional hearings in order to allow the Petitioners an opportunity to address the complete amended application. The Petitioners filed an appeal in the Commonwealth Court from this remand order.

The Commonwealth Court noted that the definition of a final order contained in Pennsylvania Rule of Appellate Procedure 341 characterizes a final order as one that disposes of all claims. Here, the remand order did not determine whether the applications were properly granted to Deer Haven; rather, it remanded the case to the ALJ for additional proceedings to permit Petitioners to respond to the complete amended application. The Court also noted that Petitioners’ right to argue that the ALJ erred in failing to dismiss the completed amended application has been preserved for appellate review. Accordingly, the Commonwealth Court agreed with the PUC that the remand order was not a final order.

Uwchlan Twp. v. Pa. PUC

Nos. 299 and 367 C.D. 2009 (Pa. Cmwlth. 2009);

Pa. Dep’t of Environmental Protection v. Pa. PUC No. 366 C.D. 2009 (Pa. Cmwlth. 2009)(filed April 29, 2009).

In an unreported memorandum opinion, the Commonwealth Court denied Shryock Bros., Inc.’s (Shryock) motions to quash, finding that the PUC’s jurisdiction order and reconsideration order are final, appealable orders. Shryock owns property in between Uwchlan Township (Township) and Upper Uwchlan Township. Two of Shryock’s properties are served by sewage systems operated by the Township. In 1973, Shryock was granted the right to discharge up to 1,000 gallons of sewage per day in the system, in return for giving the Township an easement for a sewage line. In 2005, Shryock asked the Township for additional capacity and its request was denied. Shryock then filed a complaint with the PUC seeking a declaratory order that the Township is a public utility under the PUC’s jurisdiction, an order requiring the Township to extend its sewer service to Shryock and an order requiring the Township to refund rates paid by extraterritorial customers, since those rates were not approved by the PUC.

The Township acknowledged that it provided service outside its borders. Shryock then filed a motion for partial summary judgment seeking a declaratory order that the Township is a public utility under the jurisdiction of the PUC. The Township filed preliminary objections arguing that the Uwchlan Township Municipal Authority and the Department of Conservation and Natural Resources (DCNR) were not joined as indispensible parties. The Township also filed a cross-motion for summary judgment on the issue of the PUC’s jurisdiction. The ALJ denied the preliminary objections and ordered that DCNR be served with copies of the filings in the case. Six months later, the Department of Environmental Protection (DEP) filed a petition to intervene. The ALJ granted the petition, but subject to the procedural posture of the case at that time.

The ALJ also granted Shryock’s motion for partial summary judgment and issued a declaratory order, finding that the Township provided extraterritorial public utility service and ordering the Township to file a certificate of public convenience. The Township and Shryock filed exceptions. The PUC issued a jurisdiction order, which cited its authority under 66 Pa. C.S. § 331(f) to issue a declaratory order, affirmed the ALJ’s initial decision and remanded the case to the ALJ for a determination on the remaining issues.

The Township filed a petition for review challenging the jurisdiction order. The Township also filed a motion for reconsideration to reopen the record, as well as a motion to amend the PUC’s opinion and order. The PUC denied both the motion to reconsider and the motion to amend. The Township then filed a petition for review challenging the reconsideration order. DEP filed a petition for review challenging both the jurisdiction and reconsideration orders. Shryock filed motions to quash each petition for review, in which the PUC joined.

On appeal, Shryock argues that the jurisdiction order and the reconsideration order are not final, appealable orders. The Court disagreed. With regard to the jurisdiction order, the Court concluded that the PUC, in effect, had bifurcated the issues presented in the complaint and had decided that the Township was a de facto utility; the PUC’s order mandated that the Township file a certificate within 60 days of “the entry of the Final Order on this matter.” Further, the PUC admitted that it would give the jurisdiction order preclusive effect. Because the Township is bound to comply with the PUC’s regulations, the Court found that the jurisdiction order was a final order. In the alternative, the Court held that the jurisdiction order was an interlocutory order appealable as of right because the jurisdiction order decided a substantial issue that will evade the Court’s review if not appealed. Because the jurisdiction order is an appealable order, the Court also found that the reconsideration order is an appealable order.

Shryock also argues that the PUC’s decision became final as to DEP because DEP did not file exceptions to the initial decision and, therefore, waived its right to object to the initial decision or the PUC’s affirmance of the initial decision. The Court found that DEP did not waive its right to appeal because it had filed with the PUC a response adopting the Township’s petition for reconsideration.

MilleniaNet Corp. v. Pa. PUC

No. 990 C.D. 2008 (Pa. Cmwlth. 2009)(filed April 30, 2009).
In an unreported memorandum opinion, the Commonwealth Court affirmed the PUC’s order, which concluded that the PUC did not have jurisdiction to resolve issues related to the quality of services purchased from an FCC-governed tariff. MilleniaNet, an internet service provider (ISP), purchased service and facilities from Verizon PA to provide internet connectivity for its customers. MilleniaNet alleged that Verizon PA failed to provide adequate service, engaged in unreasonable billing practices and issued excessive and unjustified bills. The ALJ sustained some of MilleniaNet’s allegations, denied other allegations and imposed penalties on Verizon PA. Verizon PA filed exceptions to the ALJ’s initial decision. The PUC granted some of Verizon PA’s exceptions, modified the ALJ’s decision and concluded that the PUC has no jurisdiction over disputes concerning the billing and adequacy of interstate services because the services were provided pursuant to an FCC-approved tariff.

On appeal, MilleniaNet argued that the PUC has the authority and responsibility to regulate internet services between two Pennsylvania based service companies providing services to Pennsylvania residents. The Commonwealth Court disagreed and noted that the Pennsylvania General Assembly and Congress did not extend the PUC’s authority to regulate internet services. Although the FCC does not have jurisdiction over intrastate communication services, the FCC treats ISP calls as interstate. 47 U.S.C. § 152(b). Further, the Court deferred to the PUC’s interpretation of 47 U.S.C. §§ 201(a),(b) and 251(b),(c), which authorizes the FCC to oversee the adequacy and reasonableness of local exchange carriers’ services and billing practices. The Court held that the PUC correctly determined that it lacks jurisdiction in this matter; the FCC has jurisdiction over the rates and quality of the services and billing due to Verizon PA’s FCC-approved tariff.

Norfolk Southern Railway Corp. v. Pa. PUC

971 A.2d 545 (Pa. Cmwlth. 2009)(filed April 30, 2009).
The Commonwealth Court affirmed the PUC’s order, which determined the allocation of future maintenance costs of a retaining wall located in a railroad-highway crossing on Herr Street. At the conclusion of an investigation, the PUC determined that the retaining wall, which lies primarily within Norfolk Southern’s right-of-way, was deteriorating. A hearing was held before an ALJ in which representatives from PennDOT, the City of Harrisburg and Norfolk Southern attended. The parties entered into a settlement agreement. Norfolk Southern agreed to assume responsibility for future maintenance of retaining walls within its right-of-way, PennDOT agreed to maintain the roadway of Herr Street at the crossing and the City agreed to maintain the sidewalks, curbs and street lighting, and to remove snow, ice and trash. The ALJ was left to determine who should pay for the repair and maintenance of the retaining walls located outside of Norfolk Southern’s right-of-way. The ALJ recommended that PennDOT and the City each reimburse Norfolk Southern for 50% of the current repair costs of the wall and that Norfolk Southern assume responsibility for maintaining the retaining walls outside of its right-of-way, with the City reimbursing Norfolk Southern for 10% of future maintenance costs. The ALJ reasoned that dividing the maintenance responsibility was not practical and would lead to disputes because the property boundaries were not clear. The PUC denied Norfolk Southern’s exceptions and adopted the ALJ’s recommended decision.

On appeal, Norfolk Southern argued that the PUC’s decision to assign it responsibility for maintaining retaining walls located outside of its right-of-way was erroneous because Norfolk Southern derives no benefit from that portion of the walls. In the alternative, if the Court affirmed the PUC’s decision, Norfolk Southern argued that PennDOT should pay 10% of the future maintenance costs of the wall. The Court reviewed the factors considered in allocating costs (See Wheeling & Lake Erie Railway Co. v. Pa. PUC, 778 A.2d 785, 793 (Pa. Cmwlth. 2001) and concluded that the PUC's allocation of future maintenance responsibilities to Norfolk Southern achieved a fair and workable result. Each party would bear some responsibility for repairing and maintaining the different components of the crossing, including not just the retaining walls but also the roadway, curbs, sidewalks and street lighting.

Donald Fix, t/a Don Farr Moving Co. v. Pa. PUC

No. 1516 C.D. 2008 (Pa. Cmwlth. 2009)(filed May 22, 2009).
In an unreported memorandum, the Commonwealth Court affirmed the PUC’s order denying Don Farr Moving Company’s (Fix) petition for reconsideration. After a complaint initiated by the Bureau of Transportation and Safety (BTS) alleging that Fix had performed a household goods move for an individual whose furniture was damaged, BTS and Fix reached a settlement agreement assessing Fix a $100.00 civil penalty for failing to promptly address the damage claim. The PUC approved the settlement agreement, but placed an additional requirement barring Fix from entering into future settlement negotiations with staff, based on Fix’s poor compliance history with PUC rules and regulations. Fix filed a petition for reconsideration from this order, which the PUC denied because it did not present any new and novel arguments and, thus, did not met the criteria to grant a petition for reconsideration. Fix then filed a petition for review in the Commonwealth Court.

The Commission’s standards in granting a petition for reconsideration are limited to whether a petitioner has presented new evidence, changed circumstances or unconsidered law. The Court’s scope of review of the Commission’s decision to deny reconsideration is limited to fraud, bad faith or abuse of discretion. The Court concluded that the PUC’s decision to deny reconsideration was not an abuse of discretion because it was based upon Fix’s failure to claim new facts or legal arguments.

Judge Kelley dissented and asserted that the PUC abused its discretion by failing to grant reconsideration, since the clause that barred Fix from entering into future settlement agreements was a previously unconsidered argument.

Verizon Telephone Co. v. Federal Communications Comm’n

No. 08-1012 (D.C. Cir. 2009)(filed June 19, 2009).
The U.S. Court of Appeals for the District of Columbia granted Verizon Telephone Companies’ (Verizon) petition for forbearance and remanded the case to the Federal Communications Commission (FCC) for further consideration. To foster greater competition within each local service area, the FCC has been given broad power to require an incumbent local exchange carrier (ILEC) to provide its competitors (CLECs) with non-discriminatory access to elements of the ILEC’s network on an unbundled basis. 47 U.S.C. § 251(c)(3). An ILEC may petition for forbearance from this requirement. The FCC may grant forbearance if it determines: (1) that enforcement of the requirement is not needed to ensure that rates are just, reasonable and non-discriminatory; (2) that the regulation is not necessary to protect consumers; and (3) that a grant of forbearance is consistent with the public interest. 47 U.S.C. § 160(a).

On September 6, 2006, Verizon filed a petition for forbearance from its unbundling obligations under 47 U.S.C.S. § 251(c)(3) in six metropolitan statistical areas (MSA): Boston, New York, Philadelphia, Pittsburgh, Providence and Virginia Beach. In an order issued on December 5, 2007, the FCC denied Verizon’s petition and held that there was insufficient evidence of facilities-based competition to satisfy each element of 47 USCS § 160(a). The FCC relied on evidence showing that Verizon had a large share of the retail market in each of the six MSAs and that Verizon’s competitors relied on Verizon’s own facilities.

Verizon appealed from the FCC’s order. Verizon argued that FCC relied on a newly minted bright-line market share test to determine if the retail market in the subject areas was sufficiently competitive to warrant forbearance. The PUC filed a joint brief with other intervenors in support of the FCC’s order.

The Court found that although no particular mode of market analysis was required by 47 USC § 160(a), the FCC exclusively relied on a market share test, which departed from FCC precedent without reasonable explanation. The FCC had previously considered both actual and potential competition in assessing whether a marketplace was sufficiently competitive to warrant forbearance. See In the Matter of Petition of Qwest Corp. for Forbearance Pursuant to 47 U.S.C. § 160(c) in the Omaha Metropolitan Statistical Area, 20 F.C.C.R. 19,415 (2005) and In the Matter of Petition of ACS of Anchorage, Inc. Pursuant to Section 10 of the Communications Act of 1934, As Amended, for Forbearance from Sections 251(c)(3) and 252(d)(1) in the Anchorage Study Area, 22 F.C.C.R. 1958 (2007). The Court concluded that it was arbitrary and capricious for the FCC to apply a new bright-line market share test without a satisfactory explanation on the FCC’s departure from precedent. The Court remanded the case so that the FCC can articulate a satisfactory explanation for its action.

The Court rejected Verizon’s argument that the FCC must act within 30 days from the issuance of the remand. The Court found that Section 160(c) required no restrictive time frame upon remand.

Third Quarter

Jackie Stefanowicz v. Pa. PUC James Cawley, Commissioner

No. 511 M.D. 2008 (Pa. Cmwlth. 2009) (filed July 28, 2009).
In an unreported memorandum opinion, the Commonwealth Court dismissed Stefanowicz’s petition for lack of jurisdiction and dismissed the preliminary objections filed by the Commission as being moot.

Stefanowicz filed a complaint with the PUC alleging that Pennsylvania American Water Company (PAWC) caused damage to her residence by delaying its response to a water main break. A hearing was held before an ALJ, who advised Stefanowicz that the ALJ lacked authority to impose monetary damages and suggested that she proceed in another court. The Commission issued a decision in favor of PAWC and Stefanowicz did not appeal it.

Stefanowicz then filed a petition in the Court’s original jurisdiction. The Commission filed preliminary objections to dismiss the petition and Stefanowicz responded by asserting that the Commission erred in failing to correct the ALJ’s decision and denied her a fair hearing. The Court treated Stefanowicz’s petition an untimely appeal and concluded that it lacked jurisdiction under 42 Pa. C.S. § 763(a)(1) because Stefanowicz’s complaint required a review of the final decision of the Commission.

Fourth Quarter

Mercury Trucking, Inc. v. Pa. PUC

No. 248 M.D. 2007 (Pa. Cmwlth. 2009)(Filed November 16, 2009).
This matter was decided under the Commonwealth Court’s original jurisdiction pursuant to Mercury Trucking, Inc. v. Pa. PUC, 923 A.2d 1244 (Pa. Cmwlth. 2007), where this Court concluded that challenges to the Commission’s assessments must be brought as an action at law according to 66 Pa. C.S. § 510(d).

In an unreported memorandum opinion, the Court ordered the Commission to refund the overpayment made by Mercury Trucking, Inc. (Mercury) of its assessment for the fiscal year July 1, 2005 through June 30, 2006. Mercury’s assessment was based on estimated, as opposed to actual, operating revenues for the 2004 calendar year pursuant to 66 Pa. C.S. §510(b), because Mercury had failed to report its 2004 operating revenues by the March 31, 2005 deadline. Mercury paid the assessment and filed an objection, asserting that the assessment was erroneous and excessive.

The Commission did not dispute that an overpayment was made. However, the Commission argued that 66 Pa. C.S. 510(b) precludes Mercury from challenging its assessment since it failed to timely file its revenue report. The Court disagreed and held that a public utility has the right to challenge its revenue assessment under Section 510(d) of the Code. Because the Commission stipulated that Mercury overpaid, the Court ordered that Mercury be reimbursed.

Ohioview Infrastructure, Inc. and Groveton Housing Partnership, LP v. Pa. PUC

984 A.2d 1043 (Pa. Cmwlth. 2009)(filed November 23, 2009).
The Commonwealth Court affirmed the PUC’s order that dismissed the complaints of Ohioview Infrastructure, Inc. and Groveton Housing Partnership, LP (Developers), which sought a refund from Duquesne Light Company (Duquesne) of the cost of installing underground utilities. The Developers removed existing overhead distribution lines and paid Duquesne for underground electrical facilities to serve its housing developments.

The Court found that the Commission did not err in its interpretation of Duquesne’s tariff that Duquesne was not obligated to refund the Developers because extending the existing distribution lines was not necessary to provide service. The Commission’s finding that the developments could have been served by the existing overhead facilities was supported by substantial evidence. The Court concluded that the Developers failed to meet their burden of proof, since they focused on the needs of their project instead of demonstrating that an extension of Duquesne’s existing lines was required to provide service.

Colin C. Boatin v. Pa. PUC

No. 1173 C.D. 2009 (Pa. Cmwlth. 2009)(filed December 2, 2009).
In an unreported memorandum opinion, the Commonwealth Court affirmed the Commission’s order that dismissed Colin C. Boatin (Boatin’s) complaint. Boatin’s complaint alleged that his telephone service with Verizon North, Inc. (Verizon) caused the deaths of his brother, theft of his identity, wiretapping of his line and the destruction of his credit rating. Verizon filed an answer and new matter denying the allegations. Verizon also filed preliminary objections, noting that the complaint failed to state a request for relief and asserting that the PUC lacked subject matter jurisdiction over the non-utility related claims.

The Commission denied Boatin’s exceptions and adopted the ALJ’s initial decision, which found that the PUC lacked subject matter jurisdiction over the non-utility claims raised in Boatin’s complaint. The Commission also found that there was no matter in controversy as Boatin had already terminated his telephone service and did not owe a balance on his Verizon account.

On appeal, the Court concluded that Boatin’s brief did not adequately develop any legal issues that it may review and, therefore, Boatin waived the issues he sought to present. The Court further noted that even assuming that Boatin’s brief was adequate for appellate review, the Commission properly dismissed his complaint because it did not have jurisdiction over Boatin’s claims.

Buffalo Valley Telephone Co., Conestoga Telephone and Telegraph Co., and Denver and Ephrata Telephone and Telegraph Co. v. Pa. PUC, No. 847 C.D. 2008; Irwin A. Popowsky v. Pa. PUC

No. 940 C.D. 2008 (Pa. Cmwlth. 2009)(filed December 15, 2009).
The Commonwealth Court affirmed the Commission’s Order that denied Petitioners’ proposed increase to switched access charges. In their annual chapter 30 Price Stability Index filing, Petitioners, three small local exchange carriers, sought to increase noncompetitive rates for switched access services charged to long-distance telephone companies, such as Verizon. After a hearing, the ALJ issued a recommended decision allowing the increase, since it did not violate a Commission regulation or order. Verizon, who pays the switched access charges, filed exceptions and the OCA and OSBA filed reply exceptions.

The Commission rejected the recommended decision and directed Petitioners to increase rates charged to their end-user customers, not the rates charged to other carriers, if they wished to raise revenues. Additionally, the Commission waived an $18 residential rate cap with respect to Denver and Ephrata Telephone (D&E), so as to allow it to increase revenue.

On appeal, the Court noted that the case presented a matter of statutory interpretation and gave the Commission deference with regard to matters under its expertise. The Court concluded that Act 183, 66 Pa. C.S. § 3015, preserved the Commission’s authority to oversee and regulate rates for noncompetitive services and to ensure that any increase was just and reasonable under 66 Pa. C.S. § 1301. Additionally, the Court found that substantial evidence supported the Commission’s conclusion that Petitioners’ switched access rate increases exceeded costs. The Court further determined that the Commission did not err in disallowing Petitioners from using the Pennsylvania Universal Service Fund to subsidize rate increases above rate caps. The Court also concluded that the Commission’s granting of a waiver to D&E of the $18 residential rate cap was supported by substantial evidence and was not clearly erroneous because the cap did not constitute an annual rate change limitation and was not a substantive change of a prior order pursuant to 66 Pa. C.S. § 703(g).

Keystone Cab Service, Inc. v. Pa. PUC; Capital City Cab Service, Inc. v. Pa. PUC

Nos. 141 C.D. 2009 & 161 C.D. 2009 (Pa. Cmwlth. 2009)(filed December 31, 2009).
In an unreported memorandum opinion, the Commonwealth Court reversed the Commission’s dismissal of Keystone Cab Service, Inc.’s (Keystone) and Capital City Cab Service, Inc.’s (Capital City) protests to RISK-CO-ZANN Foods Corporation’s application for a certificate of public convenience, and remanded the case back to the Commission. The Commission adopted the ALJ’s Initial Decision, which determined that Keystone and Capital City did not present prima facie evidence of their standing to protest because they failed to attach copies of their operating authority, pursuant to 52 Pa. Code § 3.381(c)(1)(i)(A)(V).

The Court held that the Commission may not reject a protest for not complying with the regulation unless the applicant raises that issue in preliminary objections. The Court further held that after service of preliminary objections, protestants may amend their protests under the Commission’s regulation at 52 Pa. Code § 5.101(h).

Capital City Cab Service, Inc. v. Pa. PUC

No. 516 C.D. 2009 (Pa. Cmwlth. 2009)(filed December 31, 2009).
In an unreported memorandum opinion, the Commonwealth Court reversed the PUC’s dismissal of Capital City Cab Service, Inc.’s (Capital City) protest to New Yellow Cab LLC’s application for a certificate of public convenience, and remanded the case back to the Commission. The Commission adopted the ALJ’s Initial Decision, which determined that Capital City did not present prima facie evidence of its standing to protest because it failed to attach a copy of its operating authority, pursuant to 52 Pa. Code § 3.381(c)(1)(i)(A)(V).

The Court held that the Commission may not reject a protest for not complying with the regulation unless the applicant raises that issue in preliminary objections. The Court further held that after service of preliminary objections, the protestant may amend its protest under the Commission’s regulation at 52 Pa. Code § 5.101(h). Additionally, the Court concluded that the Commission erred in upholding the ALJ’s sua sponte dismissal of Capital City’s protest because it involved the issue of standing.