Opinion
No. 2967 C.D. 2001.
Argued: June 10, 2002.
Filed: September 18, 2002. Order Filed: October 28, 2002.
Before: Honorable James Gardner Colins, President Judge; Honorable Dan Pellegrini, Judge; Honorable Jess S. Jiuliante, Senior Judge.
ORDER
NOW, October 28, 2002, having considered the applications for reargument filed by the Pennsylvania Public Utility Commission and the Philadelphia Suburban Water Company and the briefs filed by amici, Verizon Pennsylvania, Inc., Verizon North, Inc. and PECO Energy, the applications are granted. Our opinion and Order filed September 18, 2002, are withdrawn.
Respondent's application for relief seeking expedited treatment of its' application for reargument is granted.
The Chief Clerk is directed to list this case for argument on the next available list in Harrisburg or Philadelphia.
OPINION
Chester Water Authority (CWA) petitions for review from the December 10, 2001 order of the Pennsylvania Public Utilities Commission (PUC) that granted a motion for judgment on the pleadings filed by the Philadelphia Suburban Water Company (PSW) and granted its application for a certificate of public convenience. We affirm in part and vacate and remand in part.
PSW appears as an intervenor in this case.
On August 17, 2001, PSW filed an application for a certificate of public convenience with the PUC pursuant to Section 1102(a)(1)(i) of the Public Utility Code (Code). PSW sought a certificate authorizing it to supply water service to a new residential development known as the Cherry tract located in Thornbury Township, Delaware County.
66 Pa.C.S.A. § 1102(a)(1)(i). That section provides:
Upon the application for any public utility and the approval of such application by the [PUC], evidenced by its certificate of public convenience first had and obtained, and upon compliance with existing laws, it shall be lawful:
(1) For any public utility to begin to offer, render, furnish or supply within this Commonwealth service of a different nature or to a different territory than that authorized by:
(i) A certificate of public convenience granted under this part or under the former provisions of the act of July 26, 1913 (P.L. 1374, No. 854), known as "The Public Service Company Law," or the act of May 28, 1937 (P.L. 1053, No. 286), known as the "Public Utility Law."
On September 17, 2001, CWA filed a protest to PSW's application. In support thereof, CWA's protest contained the following relevant allegations:
See Section 5.51(a) of the PUC's regulations, 52 Pa. Code § 5.51(a), which provides that a person objecting to the approval of an application under consideration by the PUC may file a protest.
8. It is in the public interest for CWA to service the [Cherry tract] instead of PSW, particularly where CWA's water rates to the ultimate consumer, who are otherwise without a voice in these proceedings, are significantly lower than those of PSW. In addition to other costs as well, ratepayers will be forced to subsidize and pay substantially higher amounts simply because PSW services the tract instead of CWA, there being no other difference or benefit to PSW servicing the tract.
9. There is no need for PSW to service the [t]ract as CWA is already present and is ready, willing and able to provide service, at significantly lower costs and rates. In fact, as part of its infrastructure in [Thornbury Township] CWA already has a water main in the right-of-way immediately adjacent to the [t]ract, which supply line PSW would actually have to cross in order to service the [t]ract.
10. PSW has recently expanded into Thornbury Township for the very first time as to a 60-acre tract, which was the subject of CWA's Protest before the [PUC] at Docket No. A-21470F0059. The decision of the [PUC] in that case is currently on appeal before the Commonwealth Court of Pennsylvania. Any contention or finding in those proceedings that the expansion there was a limited one and part of PSW's "orderly growth" is plainly contradicted by the fact that PSW is clearly seeking to expand again at will outside its certificated area, contrary to the statutory franchise framework.
In Chester Water Auth. v. Pennsylvania Pub. Util. Comm'n, (Pa.Cmwlth., No. 1649 C.D. 2001, filed January 22, 2002), we affirmed the PUC's order granting PSW's application to amend its certificate of public convenience to provide water service to a 270-acre tract known as the Orleans/Ridley tract in Thornbury Township. On April 12, 2002, CWA filed a petition for allowance of appeal with the Supreme Court. See Chester Water Auth. v. Pennsylvania Pub. Util. Comm'n, (Pa. No. 258 MAL 2002, filed April 12, 2002).
11. CWA herein incorporates by reference its extensive arguments in the aforementioned proceeding. Apart from the fact that the decision therein may be reversed by the Commonwealth Court of Pennsylvania, the particular facts and circumstances herein necessarily stand on their own and in some ways are even more favorable to CWA than in the prior proceeding. Accordingly, the prior [PUC] decision should not preclude a hearing, careful consideration and a full determination herein. (Footnote added.)
(R.R. 20a-21a)
Thereafter, on September 24, 2001, PSW filed a motion to dismiss CWA's protest or, in the alternative, a motion for judgment on the pleadings. The PUC granted PSW's motion for judgment on the pleadings by order dated October 25, 2001. The PUC issued an amended order on October 26th, which included an analysis of the issues omitted from the previous day's order. In its order, the PUC also granted PSW's application for a certificate of public convenience.
On November 9, 2001, the PUC granted CWA's petition for reconsideration. Subsequently, on December 5, 2001, the PUC mailed to the parties an order indicating that its October 26, 2001 order was vacated and that further proceedings would follow before an administrative law judge.
By letter dated December 10, 2001, however, the PUC informed the parties that its December 5, 2001 order was issued in error and that it did not represent the PUC's official position and should be disregarded. Accordingly, the PUC issued an order dated December 10, 2001 affirming its October 26, 2001 order.
The issue before us is whether the PUC erred in granting PSW's motion for judgment on the pleadings and in granting its application for a certificate of public convenience. Our review of final orders of the PUC is limited to determining whether an error of law was committed, constitutional rights have been violated or whether the necessary findings of fact are supported by substantial evidence. Diamond Energy, Inc. v. Pennsylvania Pub. Util. Comm'n, 653 A.2d 1360 (Pa.Cmwlth. 1995).
Section 5.102(a) of the PUC's regulations provides that after the pleadings are closed, but within a time so that the hearing is not delayed, a participant may move for judgment on the pleadings. The judgment will be rendered where the pleadings, depositions, answers to interrogatories and admissions, together with affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. 52 Pa. Code § 5.102(c). If granted, the presiding officer is required to issue a recommended decision, subject to exceptions. Id.
In its order, the PUC determined that CWA's protest was insufficient to raise any genuine issues of material fact because it did not allege that there is no need for water service to the Cherry tract or that PSW is not fit to provide such service. We agree.
CWA's protest alleges that PSW is an inappropriate supplier because its water rates may be higher than those of CWA. It fails to challenge the Cherry tract's need for water service and PSW's ability to supply it. Rather, CWA implicitly acknowledges that water service is needed. In Paragraph 9 of its protest, CWA states that it is ready, willing and able to supply water to the Cherry tract. There is no allegation refuting PSW's averments that it is structurally, financially and legally able to provide such service. Consequently, CWA's protest admits that PSW is capable of sustaining its burden of proof for the grant of a certificate of public convenience.
The grant of a certificate of public convenience is based on a finding that a certificate is necessary to the public convenience, accommodation, and safety. Rheems Water Co. v. Pennsylvania Pub. Util. Comm'n, 620 A.2d 609 (Pa.Cmwlth. 1993).
Because CWA failed to raise any material facts regarding the Cherry tract's need for water service or PSW's ability to provide it, a motion for judgment on the pleadings was appropriate to dispose of the protest. Accordingly, we affirm that portion of the PUC's order granting PSW's motion for judgment on the pleadings.
We do not believe, however, that the PUC properly granted PSW's application for a certificate of public convenience without conducting a public hearing. Sections 1103(a) and (b) of the Code, 66 Pa.C.S.A. § 1103(a) and (b), which govern the procedure for obtaining a certificate of public convenience, provide:
(a) General rule. — Every application for a certificate of public convenience shall be made to the [PUC] in writing, be verified by oath or affirmation, and be in such form, and contain such information, as the [PUC] may require by its regulations. A certificate of public convenience shall be granted by order of the [PUC], only if [it] shall find or determine that the granting of such certificate is necessary or proper for the service, accommodation, convenience, or safety of the public. The [PUC], in granting such certificate, may impose such conditions as it may deem to be just and reasonable. In every case, the [PUC] shall make a finding or determination in writing, stating whether or not its approval is granted. Any holder of a certificate of public convenience, exercising the authority conferred by such certificate, shall be deemed to have waived any and all objections to the terms and conditions of such certificate.
(b) Investigations and hearings. — For the purpose of enabling the [PUC] to make such finding or determination, it shall hold such hearings, which shall be public, and, before or after hearing, it may make such inquiries, physical examinations, valuations, and investigations, and may require such plans, specifications, and estimates of cost, as it may deem necessary or proper in enabling it to reach a finding or determination. (Emphasis added.)
In the case sub judice, the PUC granted PSW's application for a certificate of public convenience based solely on PSW's application, without taking evidence establishing that PSW met the mandates of Section 1103 of the Code. We conclude that the PUC erred in doing so.
In Appeal of Kurren, 417 Pa. 623, 208 A.2d 853 (1965), the City of New Kensington failed to follow former Section 4112 of the Third Class City Code when adopting a proposed zoning ordinance. Section 4112 required, inter alia, that the city council set a time and place for a public hearing prior to adopting zoning ordinances. Although the city council had notified the public when it would consider the ordinance, it did not provide a time for the public to express its views prior to consideration.
Act of June 23, 1931, P.L. 932, as amended, formerly 53 P. S. § 39112, repealed by Section 1201 of the Act of July 31, 1968, P.L. 805. A similar provision now appears in Section 609 of the Pennsylvania Municipalities Planning Code, Act of July 31, 1968, P.L. 805, 53 P. S. § 10609.
In reviewing the language of the Third Class City Code, the Supreme Court reasoned that the legislature, aware of its mandate that public attendance be permitted at council hearings, indicated its intent that the public be given the right to present its views prior to the adoption of any ordinance. As stated in Unora v. Glen Alden Coal Co., 377 Pa. 7, 11, 104 A.2d 104, 106 (1954), a hearing is not granted "simply to provide [a litigant] with a forum for rhetorical expression. The right to be heard constitutes not only the right to talk; it includes the right on the part of the litigant to listen to what the tribunal has to say and to offer advice and counsel. The right to be heard encompasses the right also to give ear to one's adversary and to object, if necessary."
Because the City of New Kensington failed to allow the public an opportunity to be heard prior to passage of the ordinance, the Court determined that the ordinance was invalid.
Similarly, in In re Petition of the Bd. of Sch. Dirs. of the Hampton Tp. Sch. Dist., 688 A.2d 279 (Pa.Cmwlth. 1997), we determined that the Court of Common Pleas of Allegheny County abused its discretion by failing to conduct a statutorily required hearing regarding the fairness and reasonableness of the sale of school property.
In Bd. of Sch. Dirs., the Hampton Township School District entered into an agreement for the sale of school district property and petitioned the lower court for approval of the sale pursuant to Section 707(3) of the Public School Code of 1949. Section 707(3) further required that the court hold a hearing, after notice to the public, prior to acting upon a petition for approval. Attached to the petition were two affidavits from real estate appraisers attesting to the reasonableness of the sale price.
Act of March 10, 1949, P.L. 30, as amended, 24 P. S. § 7-707(3).
The lower court held a hearing on approval of the petition, which was attended by members of the public that opposed the sale. The objectors informed the lower court that it contested the sale as unfair and unreasonable and that it wished to examine the real estate appraisers who provided the affidavits. The lower court advised the parties that it would review the matter to determine whether the objectors were entitled to a public hearing. The lower court, however, ultimately granted the petition without further hearings.
On appeal in Bd. of Sch. Dirs., we were asked to consider whether the lower court's order granting a contested petition for approval of the sale without a public hearing was in error. In concluding that the lower court erred, we noted that the requirement of a public hearing "contemplates more than mere attendance by the public; it connotes a meeting which the public has the right to attend and the right to be heard." 688 at 279 (quoting Kurren, 417 Pa. at 630, 208 A.2d at 856) (emphasis in original).
Although the cases cited are based on statutes other than the one at issue, the purposes of the statutes are the same: to provide the public with an opportunity to attend and be heard. Presently, the PUC deprived the public an opportunity to present its position on the pending application for a certificate of public convenience.
Even though the PUC's regulations provide a method by which motions are to be disposed, see 52 Pa. Code §§ 5.101-5.103, they cannot negate the PUC's statutorily mandated duty to hold public hearings on applications for a certificate of public convenience and to require the applicant to submit evidence in support of the application. Therefore, we conclude that the PUC abused its discretion by granting PSW's application for a certificate of public convenience without a conducting a public hearing on the application.
See also W.J. Dillner Transfer Co. v. Pennsylvania Pub. Util. Comm'n, 142 A.2d 419, 422 (Pa.Super. 1958) ("The [PUC] may not by promulgating a general order or general regulation avoid the necessity of requiring substantial evidence to support its action in a particular case . . . it may not by such general order or general regulation adopt a policy which may be used as a substitute for evidence in a proceeding before it. . . .")
Accordingly, we vacate that portion of the PUC's order granting PSW's application for a certificate of public convenience and remand the matter to the PUC for a public hearing in accordance with Section 1103 of the Code.
ORDER
AND NOW, this 18th day of September, 2002, the December 10, 2001 order of the Pennsylvania Public Utilities Commission is AFFIRMED to the extent that it granted the motion for judgment on the pleadings filed on behalf of the Philadelphia Suburban Water Company. The Commission's order is VACATED to the extent that it granted the application for a certificate of public convenience filed by Philadelphia Suburban Water Company and REMANDED to the Commission for a public hearing pursuant to Section 1103 of the Public Utilities Code, 66 Pa.C.S.A. § 1103.
Jurisdiction relinquished.
I respectfully disagree with the majority's decision to vacate and remand in part. Once the motion for judgment on the pleadings was granted for the lack of a factual dispute, PSW's application for a certificate of public convenience should be granted without a remand to the PUC for a public hearing.
The PUC should be afforded the opportunity to dismiss general protests that lack a factual dispte. In additin, PSW should not be penalized for CWA's failure to adequately challenge PSW's request for a certificate of Public convenience. A judgment on the pleadings is authorized by Section 5.102(a) of the PUC's regulations where the pleadings show that there is no genuine issue of material fact. Section 103 of the Public Utility Code (Code) requires an applicant to demonstrate that (1) there is a public need for the proposed services, (2) the existing services are inadequate, and (3) it is fit to satisfactorily meet the need. Seaboard Tank Lines, Inc. v. Pennsylvania Public Utility Commission, 502 A.2d 762 (Pa.Cmwlth. 1985).
66 Pa.C.S.A. § 1103(a).
In its protest, CWA failed to raise any legally material issues that would prevent the PUC from denying PSW's application. CWA's protest did not allege that PSW was unfit to provide water service to the proposed tract. Additionally, the fact that CWA has a water main nearby that can provide service to the proposed tract and that CWA's rates are lower than PSW's rates does not prove that 1) there is not a need for water service to the tract, 2) the present facilities are inadequate or 3) PSW is unfit to render water services to the tract. As such, the PUC acted properly in granting PSW's request for a certificate of public convenience. A hearing is not required because CWA unsatisfactorily challenged and PSW sufficiently demonstrated a demand and need for service, the inadequacy of existing facilities, and technical, financial and legal fitness in its application. As no factual dispute exists, PSW's request should be granted without a remand.