2016 Summaries of PUC Court Decisions

 

First Quarter

 

FERC v. Electric Power Supply Ass’n., et al.

Nos. 14-840 and 14-841 (Filed January 25, 2016), 136 S. Ct. 760 (U.S. 2016)

The Supreme Court of the United States (Supreme Court) reversed the decision of the United States Court of Appeals for the District of Colombia Circuit (Court of Appeals), which vacated a rule established by the Federal Energy Regulatory Commission (FERC) regulating “demand response” practices.

Under the Federal Power Act (FPA), FERC has the authority to regulate the wholesale electricity market, while states have the authority to regulate the retail sale of electricity.  “Demand response” is the practice by which wholesale market operators pay consumers to refrain from using power at specified times.  FERC issued Order No. 745, which established a rule, 18 C.F.R. § 35.28(g)(1)(v), that requires wholesale market operators to pay the same price to demand response providers for conserving energy as to electricity generators for producing energy.  The rule includes a “net benefits test” to ensure that the compensation requirement only applies to demand response bids and supply bids that will result in savings to wholesale market purchasers.

The Court of Appeals vacated the rule.  The Court of Appeals held that FERC lacked the authority to establish the rule because the rule attempts to regulate the retail sale of electricity, which is reserved to the states.  The Court of Appeals also held that the rule is arbitrary and capricious under the Administrative Procedure Act (APA) because FERC did not adequately justify its reasons for establishing the rule.

The Supreme Court reversed the decision of the Court of Appeals. The Court concluded that FERC has the authority to establish the rule because the FPA grants FERC the authority to ensure that wholesale market rates are “just and reasonable.”  The Court also concluded that the rule does not interfere with the authority of the states to regulate the retail rates.  The Court noted that wholesale market transactions naturally impact the retail sale of electricity.  However, the rule exclusively governs wholesale market rates, not retail rates.  Further, the Court concluded that the rule is not arbitrary and capricious because FERC considered and weighed multiple factors in establishing the rule and sufficiently explained its decision.

 

Lea Augustin, et al. v. City of Philadelphia

No. 14-CV-4238 (Filed March 17, 2016), 2016 U.S. Dist. LEXIS 35142 (E.D. Pa. 2016)

The United States District Court for the Eastern District of Pennsylvania granted Plaintiff’s motion for partial summary judgment and held that Philadelphia Gas Works’ (PGW) procedure for imposing lien’s violated Plaintiff’s due process rights under the Constitution.

PGW is a gas utility owned by the City of Philadelphia (City).  Plaintiff’s, property owners and landlords, filed a
42 U.S.C. § 1983 claim and sought to enjoin PGW from imposing liens on their properties for utility bill payments owed by tenants.  Plaintiff’s argued that PGW violated their procedural due process rights in by imposing the liens a short period of time after Plaintiff’s received notice. 

The Court noted that the Supreme Court of the United States (Supreme Court) has held that property rights impaired by liens warrant due process protection.  The Court explained that the Supreme Court has not set forth specific rules for determining whether an administrative procedure provides adequate due process.  Therefore, the Court stated that it is appropriate to weigh the private interests affected, the risk of erroneous deprivation though the procedure used, and the government’s interests.

The Court stated that PGW imposed the liens as authorized under 66 Pa. C.S. § 1414(a).  The Court explained that PGW’s procedure for imposing liens is largely automated.  First, PGW sends a pre-lien notice that sets forth the time by which payment must be received.  If payment is not received, PGW imposes a lien and sends a post-lien notice.  Notices are often mailed to the property address rather than to the landlord’s registered mailing address.  “Blockers” on an account can delay, sometimes for years, a notice from being sent when the account name and service address do not match the name of the property owners or the address of the property owners on record with the Philadelphia Office of Property Assessments.  If there is a delay, the debt continues to accumulate because PGW does not cease to provide gas service.  Generally, a property owner is not informed when a tenant does not pay gas bills, unless the owner is authorized to receive this information.  If a property owner inquires about a lien, PGW does not disclose to the owner which tenant incurred the debt due to privacy concerns.

The Court agreed with Plaintiffs that PGW’s process for imposing liens did not provide adequate due process.  The Court noted that the private interests affected were the property owners’ interests in a title free and clear of municipal liens, while the government’s interests were PGW’s interest in compensation for unpaid gas bills.  The Court stated that, although Pennsylvania law provides post-lien remedies, the pre-lien procedure utilized by PGW was inadequate. Further, the Court noted that PGW’s practice of allowing large debts to accumulate is not in accordance with 52 Pa. code § 56.1 requiring the prevention of unmanageable debts. The Court held that PGW’s procedures for imposing liens violated Plaintiff’s due process rights and granted Plaintiff’s motion for partial summary judgement. 

 

Second Quarter
 

Vermeychuk v. Pa. PUC

No. 143 C.D. 2016 (Filed April 8, 2016)

In an unreported opinion, the Commonwealth Court of Pennsylvania granted the Commission’s motion to dismiss the appeal of Denial Vermeychuk.  On November 5, 2015, the Commission dismissed Mr. Vermeychuk’s complaint against PECO Energy Company (PECO).  Subsequently, on January 27, 2016, Mr. Vermeychuck, a practicing attorney, filed a petition for review nunc pro tunc.  The Commission argued that the petition for review was untimely.  The Court stated that the Supreme Court permits nunc pro tunc appeals when the appellant proves the following three elements: (1) the notice of appeal was filed late as a result of non-negligent circumstances, (2) the appellant filed the notice shortly after the expiration date, and (3) the appellee was not prejudiced by the delay.  The Court found that no breakdown in operations that would justify a nunc pro tunc appeal occurred.  No evidence of non-negligent circumstances existed and the appeal was filed 36 days after Mr. Vermeychuk learned of the Commission’s decision.  As the first and second elements were not met, the Court did not examine the third element.

 

Pa. Independent Petroleum Producers Assoc. v. Commonwealth

No. 219 M.D. 2016 (Filed April 15, 2016)

In an unreported opinion, the Commonwealth Court of Pennsylvania denied Pennsylvania Independent Petroleum Producers Association’s (PIPP) petition for expedited summary relief.  In its petition, PIPP requested declaratory, injunctive, and mandamus relief against the Department of Environmental Protection (DEP), the Environmental Quality Board (EQB), and the Independent Regulatory Review Commission (IRRC) with regard to final form regulations concerning oil and gas wells.  PIPP alleged that the final form regulations violated Section 1741.1-E(a) of the Fiscal Code, 72 P.S. § 1741.1-E(a), because the regulations contained separate provisions for conventional and unconventional wells.  The Court held that, because the final form regulations are not final regulations, PIPP’s claims are not ripe for judicial determination.

 

Goffer v. Pa. PUC

No. AP 2016-0546 (Filed April 18, 2016)

In a final determination, the Pennsylvania Office of Open Records (OOR) denied the Right-to-Know Law (RTKL) request of Michael Goffer.  On February 26, 2016, Mr. Goffer submitted a request to the Commission for documents relating to a December 4, 2014 gas explosion in Dunmore, Pennsylvania. The Commission denied the request stating that it was conducting an active investigation of the explosion.  On March 18, 2016, Mr. Goffer challenged the Commission’s denial before the OOR.  In response, the Commission submitted its position statement and an affidavit certifying that the Commission was conducting an active investigation.  The OOR concluded that, since the Commission offered evidence, by affidavit, showing that no action has been taken in the ongoing investigation, the Commission met its burden of proof.  Therefore, the records were exempt under Section 708(b)(17) of the RTKL, 65 P.S. § 67.708(b)(17). 

 

Capital City Cab Service, et al. v. Pa. PUC

Nos. 240 C.D. 2015, 238 C.D. 2015, 253 C.D. 2015 (Filed April 19, 2016), 138 A.3d 119 (Pa. Cmwlth 2016)

The Commonwealth Court of Pennsylvania affirmed the Commission’s order granting conditional approval of Raiser-PA, LLC’s (Raiser) transportation network company (TNC) service and the Commission’s order denying Executive Transportation Company, Inc.’s (Executive) petition for reconsideration.

Raiser submitted an application to the Commission for experimental TNC operation.  On September 25, 2014, the Administrative Law Judges (ALJs) found that the Commission had jurisdiction, but that Raiser did not meet its burden of proof.  As such, the ALJs denied Raiser’s application. Upon review, on November 13, 2014, the Commission conditionally granted Raiser’s application setting forth ongoing operating and compliance terms aimed at balancing market flexibility with public safety.  On December 5, 2014, the Commission determined that Raiser had sustained is burden of proving a public demand or need for the proposed service and that it possesses the requisite technical and financial fitness and propensity to operate safely and legally. The Commission then provided that Raiser would be granted a certificate of public convenience upon filing and Commission approval of a compliance plan consistent with its order.  Lastly, the Commission found that its jurisdiction over common carriers is not limited to those in possession of vehicles.  On December 22, 2014, Executive filed a petition for reconsideration, which the Commission denied on January 29, 2015.  Executive’s appeal before the Commonwealth Court was consolidated with appeals by other taxi cab companies in the area that Raiser proposed to serve. Petitioners argued that the Commission abused its discretion.  Petitioners alleged that Raiser was not an experimental service and that, because Raiser did not have custody of any vehicles, the Commission did not have jurisdiction to grant its application.

The Court found that the Commission’s approval was consistent with other recent TNC approvals.  The determination is properly reserved to the Commission’s discretion and the record reflected a reasonable, factually support decision.  Although Raiser’s service does not fit into an existing category, the Commission is entitled to considerable deference.  The Public Utility Code does not require that a carrier have custody of any vehicles and, therefore, does not exclude the type of service offered by Raiser.  As such, the Commission appropriately exercised its jurisdiction.  In addition, substantial evidence existed to support the Commission’s determinations regarding need for the proposed service, Raiser’s technical and financial fitness, Raiser’s current propensity to operate lawfully, adequate insurance coverage and an appropriate compliance plan to ensure driver integrity and vehicle safety.   

 

Hughes v. Talen Energy Mktg., LLC

No. 14-614, 14-632 (Filed April 19, 2016), 136 S. Ct. 1288 (2016)

The Supreme Court of the United States affirmed the Fourth Circuit Court’s decision that Maryland’s load servicing entity (LSE) program is preempted as it conflicted with the Federal Energy Regulatory Commission’s (FERC) policies.

Under the Federal Power Act (FPA), the FERC has exclusive jurisdiction over wholesale electricity in the interstate market, while states regulate retail electricity.  In Maryland, LSEs purchase electricity from power generators in order to deliver it to retail customers.  PJM Interconnection (PJM) operates a capacity auction in which it identifies the need for new generation and forms long-term contracts with bidders in order to meet capacity. The FERC regulates the capacity auction to ensure just and reasonable prices.  Due to concerns regarding incentive for new in-state generation, Maryland established a program in which it selected CPV Maryland, LLC (CPV) to build a power plant and required LSEs to enter into a 20-year contract specifying the rate that CPV received for wholesale transactions via a so-called contract for differences in which the generator would be guaranteed a certain price regarding of the wholesale market clearing price.  Subsequently, competitors of the CPV initiated an action claiming that Maryland’s contract for differences program was impermissible as it interfered with the FERC’s regulatory authority to set just and reasonable wholesale rates. The Fourth Circuit Court held that the program was preempted.

The Supreme Court concluded that Maryland’s program significantly conflicted with the FERC’s exclusive regulation of wholesale energy and capacity prices under the Federal Power Act (FPA).  The Court reasoned that Congress intended that the FERC comprehensively occupy the regulatory field with regard to wholesale electricity.  The Maryland program presents an obstacle to the purposes and objective of Congress because it sets an interstate wholesale rate, contravening the FPA’s division of authority between state and federal regulators.  Therefore, the Maryland program is preempted.  The court noted, however, that its holding was limited to rejection of Maryland’s contract for differences program.  The court did not rule on the permissibility of “other measures” that states might use to encourage the development of in-state generation, such as, tax incentives, land grants, direct subsidies, construction of state-owned generation facilities, or re-regulation of the energy sector.

 

Executive Transportation Co. v. Pa. PUC

No. 252 C.D. 2015 (Filed April 22, 2016), 138 A.3d 145 (Pa. Cmwlth. 2016)

The Commonwealth Court of Pennsylvania affirmed the Commission’s January 29, 2015 order denying Executive Transportation Company, Inc.’s (Executive) petition for reconsideration. The decision in the instant matter mirrors the decision in its companion case, Capital City Cab Service, et al. v. Pa. Public Utility Commission, 138 A.3d 119 (Pa. Cmwlth 2016). 

Raiser submitted an application to the Commission for experimental transportation network carrier (TNC) operation.  On September 25, 2014, the Administrative Law Judges (ALJs) found that the Commission had jurisdiction, but that Raiser did not meet its burden of proof.  As such, the ALJs denied Raiser’s application. Upon review, on November 13, 2014, the Commission conditionally granted Raiser’s application setting forth ongoing operating and compliance terms aimed at balancing market flexibility with public safety.  On December 5, 2014, the Commission found that its jurisdiction over common carriers is not limited to those in possession of vehicles.  On December 22, 2014, Executive filed a petition for reconsideration, which the Commission denied on January 29, 2015.  On appeal, Executive argued that the Commission’s determination regarding vehicle ownership was inconsistent with Section 1501 of the Public Utility Code, 66 Pa.C.S. § 1501, which it interpreted as requiring common carriers to assume custody, control, and supervision of the vehicles it operates.  Executive argued that Raiser is a broker rather than a common carrier.

The Court found that Commission did not abuse its discretion in denying reconsideration.  Executive raised the same arguments before the Administrative Law Judge (ALJ) and the Commission.  It did not raise any new or novel previously unaddressed by the Commission and, therefore, it did not meet the standard for reconsideration set by Duick v. Pa. Gas and Water Co., Docket No. C-R0597001 (entered December 17, 1982).

 

Pa. PUC v. Seder/Kraus

Nos. 52 MAP 2015, 53 MAP 2015 (Filed May 25, 2016), 139 A.3d 165 (Pa. 2016)

The Supreme Court of Pennsylvania reversed the Commonwealth Court’s order and reinstated the final determination of the Office of Open Records (OOR). 

On October 29, 2011, a snowstorm in PPL Electric Utilities Corporation’s (PPL) service territory caused an outage and, in November 2011, the Commission received an anonymous tip letter from a PPL employee stating that PPL violated its priority-ranking policy in restoring power.  The Bureau of Investigation and Enforcement (BIE) investigated the matter and PPL entered into a settlement agreement.  Under the terms of the agreement, PPL did not admit wrongdoing, but agreed to pay a civil penalty.  The parties agreed to treat the tip letter as confidential.  The Commissioners approved the agreement and subsequently, the settlement documents were made public.  The tip letter and the majority of BIE’s investigative documents were not released.  Petitioner Scott Kraus of the Morning Call made a Right-to-Know Law (RTKL) request for all documents relating to the settlement and the tip letter.  Petitioner Andrew Seder of the Times Leader also made a RTKL request for the tip letter. 

The Commission declined the RTKL requests stating that the documents were exempt from disclosure under Subsection 335(d) of the Public Utility Code, 66 Pa.C.S. § 335(d).  Mr. Kraus and Mr. Seder filed separate appeals with the OOR, which the OOR granted in its final determination.  The OOR ordered that the documents be disclosed with redaction.  The Commission appealed to Commonwealth Court, where the matters were consolidated.  The Commission argued that the term “commission” in Subsection 335(d) meant the Commissioners and, because the Commissioners did not rely on the investigatory documents or the tip letter in their decision, it need not be disclosed.  The Commonwealth Court agreed and Petitioners appealed to the Supreme Court.

The Supreme Court held that Subsection 335(d) clearly and unambiguously obligates the disclosure of the tip letter and the investigative file.  The adoption of the Commission’s interpretation of Subsection 335(d) creates inconsistency in the statutory provision and leads to an unreasonable result.  In addition, Subsection 335(d) is a public disclosure law and the General Assembly’s intent in enacting such a law is to promote transparency. The OOR acted properly by ordering the disclosure of the documents with redaction.

 

Third Quarter


In re Condemnation of Sunoco Pipeline, L.P.

Nos. 1979 C.D. 2015, 1980 C.D. 2015, 1981 C.D. 2015 (Filed July 14, 2016), 143 A.3d 1000 
(Pa. Cmwlth. 2016) appeal denied 2016 Pa. LEXIS 2981

The Commonwealth Court affirmed the order of the Cumberland County Court of Common Pleas that overruled the preliminary objections of the condemnees with regard to declarations of taking filed by Sunoco Pipeline, L.P. (Sunoco).

Sunoco sought to condemn the condemnees’ property or establish an easement on the condemnees’ property for the purpose of the development of the Mariner East 2 pipeline (Mariner East 2).  The condemnees filed preliminary objections alleging that Sunoco’s declarations of taking violated the doctrine of collateral estoppel, the Mariner East 2 was not subject to Commission regulation, the Mariner East 2 did not provide Commission regulated service, and no public needs was present. On September 29, 2015, the trial court overruled the condemnees’ preliminary objections. Subsequently, condemnees appealed and the trial court issued an opinion in support of its order.

The Court found that collateral estoppel was not a bar to the case, that the Mariner East is both an interstate and intrastate pipeline, and that the Commission authorized an expansion of Mariner East 1 service for Mariner East 2 service.  In particular, the court held (1) that the Commission has state-wide authority over public utilities, (2) that the certificate of public convenience (CPC) issued by the Commission is prima facia evidence that the Commission has determined that there is a public need for the service, and (3) that the CPC holder has the power of eminent domain.  The courts of common pleas have no jurisdiction to re-visit these determinations.  The court also held that the collateral attacks on “public utility” status in the courts of common pleas would be contrary to Section 763 of the Judicial Code which places review of Commission decision within the jurisdiction of the Commonwealth Court.  Therefore, the Court held that the trial court did not err in overruling the condemnees’ preliminary objections.

 

Funk  v. Wolf

No. 467 M.D. 2015 (Filed July 26, 2016), 144 A.3d 228 (Pa. Cmwlth. 2016) appeal denied 2017 Pa. LEXIS 670

The Commonwealth Court sustained the Respondents preliminary objections with regard to mandamus and dismissed the Petitioners’ petition for review seeking mandamus relief and declaratory relief.

Petitioners alleged that the failure of the Commission and executive branch Respondents to implement a regulatory plan for the emission of carbon dioxide and other greenhouse gases infringed upon the Constitutional rights of the people and violated the duty to act as trustees of public natural resources.  Petitioners sought to compel the development of such a plan and supported their position with facts related to climate change.  Respondents filed preliminary objections challenging the Court’s jurisdiction, asserting that Petitioner’s lack standing, and arguing that Petitioner’s cannot obtain mandamus as the Petition does not allege facts that satisfy the elements of mandamus.

The Court denied Respondents’ preliminary objections with regard to jurisdiction and standing, but sustained Respondents’ objections as to mandamus.  The Court reasoned that Petitioners failed to demonstrate any legislation or regulation that mandates Respondents’ establishment of a carbon dioxide and greenhouse gas emission plan.  Therefore, Petitioners do not have a clear right to mandamus relief.  Further, declaratory relief would have no legal significance other than to support mandamus making it futile as the Court already determined the Petitioners do not have right to mandamus relief.

 

Lyft, Inc. v. Pa. PUC

Nos. 843 C.D. 2015, 974 C.D. 2015 (Filed August 31, 2016), 145 A.3d 1235 (Pa. Cmwlth. 2016)

The Commonwealth Court of Pennsylvania affirmed the Commission’s orders regarding the proprietary status of Lyft, Inc.’s (Lyft) trip data and dismissed the Pittsburgh Post-Gazette’s (PG) cross-appeal regarding intervention. 

Lyft filed applications to provide experimental service as a transportation network carrier (TNC).  In a separate proceeding, the Bureau of Investigation and Enforcement (BIE) filed a complaint alleging that Lyft violated the Public Utility Code and requesting that Lyft cease and desist operations.  As to the applications, the Administrative Law Judges (ALJs) issued an interim order requesting Lyft’s trip data.  Lyft filed a petition for protective order claiming that the trip data was protected due to its proprietary nature.  The ALJs denied Lyft’s petition.  In a September 3, 2014 hearing, Kim Lyons of the PG was removed during Lyft’s testimony regarding the trip data.  Subsequently, the PG sought to intervene in the proceedings to ensure public access to the record.  The Commission determined that Lyft’s trip data was not proprietary, but denied the PG’s request to intervene.  Lyft filed an appeal regarding the trip data and the PG filed a cross-appeal regarding its ability to intervene in the proceedings.

The Court concluded that Commission’s decision was supported by substantial evidence.  The definition of “trade secret” in the Commission’s regulations differs from the Right-to-Know Law and the Uniform Trade Secrets Act.  The Commission is entitled to deference in the application of its regulations and it is clear that the Commission considered the factors contained in its regulations when performing the balancing test.  Lyft failed to satisfy its burden to prove that substantial harm would result from the disclosure of the trip data and that the harm would outweigh the public’s interest in open access to information.  Further, the Commission did not abuse its discretion in denying the PG’s petition to intervene.  The PG admitted that it received the relief requested as the trip data was ultimately disclosed.

 

Robinson Township, et al. v. Commonwealth

Nos. 104 MAP 2014, 105 MAP 2014 (Filed September 28, 2016), 147 A.3d 536 (Pa. 2016)

The Supreme Court of Pennsylvania affirmed in part and reversed in part the Commonwealth Court’s order.

In February 2012, the General Assembly enacted Act 13 pertaining to oil and gas industry regulation and uniformity to local zoning for such operations.  Section 3218.1 provides that, upon being informed of a spill and conducting an investigation, the Department of Environmental Protection (DEP) must notify a public drinking water facility affected that it may be affected.  Section 3222.1 provides that fracking providers, vendors, and operators must disclose chemical use within 60 days of the conclusion of all fracking activities.  Under 3222.1(b)(10)-(11), in order for health care professionals to obtain chemical information, they must execute a confidentiality agreement, and health professionals have a limited opportunity to request information orally in the event of  a medical emergency.  Section 3241 provides that a corporation transporting, selling, or storing natural gas manufactured in the Commonwealth has a right to appropriate an interest in property located in a storage area for the injection, storage, and removal of gas.  Section 3304 provides for the uniformity of local zoning in regard to the reasonable development, location and conditions for oil and gas operations.  Lastly, Sections 3305 to 3509 relate to local ordinances and the ability of the Commission to review local ordinances for compliance with the Municipalities Planning Code, Chapter 32 (relating to oil and gas operations) and Section 3304 (relating to uniformity of local zoning ordinances).

Upon review, the Pennsylvania Supreme Court held as follows on the contested issues: 

Severability of Enforcement Provisions – Sections 3305-3309 are not severable from Sections 3304 and Sections 3303, which the Court previously held unconstitutional in Robinson II, nor severable from Section 3302, as modified by the Commonwealth Court in Robinson III, through its striking of the last sentence of that section.  The Court enjoins application and enforcement of Sections 3305 through 3309.  The Commonwealth Court’s order is affirmed with respect to this question. 

Single Subject Rule – Act 13 does not violate the single subject rule of Article III, Section 3 of the PA Constitution with its inclusion of Sections 3222.1(b)(10) and 3222.1(b)(11), since those provisions are germane to the overall subject of Act 13, regulation of the oil and gas industry in Pennsylvania.  The order of the Commonwealth Court is affirmed with respect to this question.

Health Professionals Access to Chemical Data – Sections 3222.1(b)(10) and 3222.1(b)(11) which limit health professionals’ access to, and use of, information regarding chemicals used in the hydraulic fracturing process, which has been designated confidential and proprietary information or trade secrets by a vendor, service provider, or well operator, violate the prohibitions in Article III, Section 32 of the PA Constitution against the enactment of “special laws,” and application and enforcement of those sections are enjoined.  The order of the Commonwealth Court is reversed in relevant part.

Notice of Spill to Private Well Owners – Section 3218.1, which requires notice by the DEP in the event of a spill of chemicals or waste associated with the fracking process to public water facilities, but not to owners of private wells, violates the prohibition in Article III, Section 32 of the PA Constitution against the enactment of “special laws,” and application and enforcement of this section is enjoined.  The order of the Commonwealth Court is reversed in relevant part.  This portion of the Court's mandate is stayed for 180 days to allow the General Assembly time to craft remedial legislation.

 

Fourth Quarter
 

Sunrise Energy, LLC v. FirstEnergy Corp.

No. 1282 C.D. 2015 (Filed October 14, 2016), 148 A.3d 894 (Pa. Cmwlth. 2016), No. 25 WAL 2017 (awaiting allocatur)

The Commonwealth Court of Pennsylvania affirmed the June 1, 2015 order of the Washington County Court of Common Pleas and remanded the matter for further proceedings. 

The Alternative Energy Portfolio Standards Act (AEPS Act) required utilities to purchase the electricity generated by a customer-generator at retail price.  Sunrise Energy, LLC (Sunrise), which operates a solar power facility, and West Penn Power (West Penn), an electric distribution company (EDC), entered into an agreement in which West Penn would purchase excess electricity generated by Sunrise.  West Penn terminated the agreement and subsequently, Sunrise filed suit in the Washington County Court of Common Pleas alleging violations of the AEPS Act.  West Penn filed preliminary objections asserting that the Commission has exclusive jurisdiction to determine whether Sunrise Energy qualifies as a “customer generator” under the AEPS Act.  The trial court rejected West Penn’s argument that the Commission had primary jurisdiction in this area and, instead, concluded that the court of common pleas was competent to address the dispute.

Upon review, the Commonwealth Court found that trial court had the ability to competently construe the terms of the AEPS Act and to properly overrule West Penn’s preliminary objections.  The court reasoned that because the legislature did not give explicit statutory enforcement authority to the Commission to adjudicate disputes arising under the AEPS Act, the Commission does not have exclusive primary jurisdiction to adjudicate whether Sunrise Energy qualifies as a customer generator.  Also, in dicta, the court opined that because the AEPS Act is not part of the Public Utility Code and because the AEPS Act only authorizes the Commission to develop “technical and net metering rules,” as opposed to regulations, the Commission has no jurisdiction to decide eligibility for net metering by a customer generator since such eligibility has been fully established by the legislature.