2019

First Quarter

No cases reported.

Second Quarter

HIKO Energy, LLC v Pennsylvania Public Utility Commission

No. 39 EAP 2017, 209 A.3d 246 (Pa. 2019), Decided June 5, 2019

This proceeding arose out of the Polar Vortex weather phenomenon in 2014. HIKO, an electric generation supplier (EGS), offered electric generation service to prospective customers at an initial rate for six months that would always be lower than the Price to Compare (PTC) rate of the electric distribution company before becoming a variable rate service. However, during the winter months of December 2013 – March 2014, HIKO charged 14,780 of its customers rates greater than the PTC during the period within which it was obligated to charge less, in violation of 52 Pa. Code § 54.4.(a), which requires that EGS prices billed must reflect the marketed prices and agreed upon prices in the disclosure statement. The presiding Administrative Law Judges (ALJs) imposed a civil penalty of $125 per overcharged invoice, for a total civil penalty of over $1.8 million, but did not revoke HIKO’s EGS license. The Commission adopted the ALJs’ decision.

HIKO sought appellate review, alleging that the civil penalty imposed by the Commission was excessive and unconstitutional. Both the Commonwealth Court and the Supreme Court of Pennsylvania found that HIKO had waived its argument that the civil penalty imposed by the Commission was excessive and unconstitutional, because it had not raised the issue before the Commission in its exceptions to the ALJs’ Initial Decision, and that the Commission’s decision was supported by substantial evidence that HIKO failed to abide by the marketed and agreed upon prices, and that the civil penalty was calculated based on evidence provided by HIKO.  Therefore, the Supreme Court affirmed the Commission’s decision.

Third Quarter

PPL Electric Utilities Corporation v. City of Lancaster and Pennsylvania Public Utility Commission

No. 55 MAP 2017 and No. 57 MAP 2017, 214 A.3d 639 (Pa. 2019), Decided August 20, 2019

The issue before the Pennsylvania Supreme Court was whether the City of Lancaster had authority to pass ordinances regulating public utilities within the Commission’s jurisdiction, including conducting inspections to determine whether utilities are in compliance with the Code, directing utilities to move their facilities within the right-of-way, and fining utilities for violations of the City’s ordinances. Also at issue was an annual right-of-way fee to be assessed against each utility with facilities in the City of Lancaster's rights-of-way.  In striking down the contested ordinances, the Supreme Court of Pennsylvania explained that the General Assembly intended for the Commission to occupy the entire field of public utility regulation, and therefore the City of Lancaster’s ordinances were preempted by the Public Utility Code’s uniform regulatory framework.

McCloskey/OCA v. PUC (FirstEnergy & Newtown Artesian Water Company)

697 CD 2018 and 1183 CD 2018, 219 A.3d 1216 (Pa. Cmwlth 2019), Decided July 11, 2019

In 2018, in response to Distribution System Improvement Charge petitions filed separately by the FirstEnergy Companies and Newtown Artesian Water Company, the PUC issued orders finding that the companies did not have to apply the tax adjustments called for by Act 40/66 Pa. C.S. § 1301.1(a) to the calculation of their DSIC rates.  In the PUC’s opinion, the Act 40 tax adjustments apply only to the calculation of a utility’s base rates.  The OCA, on the other hand, believed the tax adjustments required by Act 40 apply to the calculation of all utility rates, including DSIC rates, so they appealed to the Commonwealth Court.  (FE at 697 CD 2018; NAWC at 1183 CD 2018).  On July 11, 2019, the Commonwealth Court issued Orders reversing the PUC's FE and NAWC Orders and remanding the matters to require the companies to modify their DSIC tariffs in accordance with Act 40.  The court agreed with the OCA that utilities must factor the Section 1301.1(a) tax adjustment into both base rates and surcharge rates. 

Sunoco Pipeline L.P. v. Pennsylvania State Senator Dinniman and Public Utility Commission

No. 1169 C.D. 2018, 217 A.3d 1283 (Pa. Cmwlth. 2019), Decided September 9, 2019

This case involved the legal standing of a legislator to challenge the construction and operation of Sunoco’s Mariner East Pipeline System being constructed through the legislator’s area of residence and constituency, West Whiteland Township, Chester County.  Commonwealth Court found that the Commission erred in holding that the Senator had personal standing to file a complaint and petition for emergency interim relief to enjoin the operation and construction of natural gas pipelines.  On September 9, 2019, President Judge Leavitt issued an Opinion and Order reversing the Commission’s decision that granted Dinniman personal standing to intervene as the Court found there was no evidence that the pipeline posed a harm to the Senators property or person.  The Court found that the Senator also lacked legislative standing since his desire to protect and advocate for his constituents did not constitute a basis for legislative standing and the construction of the pipeline was not interfering with the senator’s ability to perform his legislative functions.  The matter was remanded to the Commission to dissolve an interim emergency injunction and dismiss the Complaint.

Fourth Quarter

West Penn Power Company v. Pennsylvania Public Utility Commission

No. 1291 C.D. 2018, 219 A.3d 716 (Pa. Cmwlth. 2019), 2019 Pa. Commw. Unpub. LEXIS 532, Decided October 2, 2019

The issue before the Pennsylvania Commonwealth Court was whether the Pennsylvania Public Utility Commission properly determined that West Penn Power Company’s proposed vegetation management plan for the property of Robert M. Mattu was unreasonable and, therefore, in violation of Section 1501 of the Pennsylvania Public Utility Code.

On appeal, the Commonwealth Court found that Mr. Mattu failed to present any evidence that West Penn Power Company’s proposed vegetation management treatment on his property posed a risk to his water supply which would be unreasonable and, therefore, in violation of the Pennsylvania Public Utility Code.  Thus, the Court overturned the Commission’s Order which had found that such treatment would constitute a violation of the Pennsylvania Public Utility Code.

Red Lion Municipal Authority v. Pa. Public Utility Commission

No. 186 C.D. 2019, 219 A.3d 730 (Pa. Cmwlth. 2019), 2019 Pa. Commw. Unpub. LEXIS 590, Decided October 29, 2019

In this case the Commission’s approved a public-utility municipal contract (PUMC) between The York Water Company and Dallastown-Yoe Water Authority (DYWA) in the form of an Emergency Interconnect Agreement.  In its review of the PUMC under 66 Pa. C.S. § 507, the Commission found that the PUMC was reasonable and in the public interest.  On appeal, Red Lion Municipal Authority (Red Lion) sought to defend its status as the only water provider to DYWA by having the PUMC declared invalid.  Red Lion argued that the Commission ignored evidence regarding municipal rates and water disinfection in its analysis of the PUMC and improperly denied reconsideration.

The Commonwealth Court held that 66 Pa. C.S. § 507 “merely provides a mechanism by which a public utility may seek an exception to tariff rules, and the PUC may approve a contract for service at a rate other than the tariff.”  The Court found that the Commission did not “ignore” evidence in reviewing the PUMC.  Rather, the Court determined that, as the Commission argued, “the PUC does not have jurisdiction over the services provided and rates charged by municipal authorities” because that jurisdiction is vested in the courts of common pleas.  Likewise, the Court determined that that PUC does not have jurisdiction “over water disinfection methods such as the use of chloramines versus chlorine, which is within the jurisdiction of the DEP.”  Accordingly, the Court affirmed the Commission’s determination.