2021

First Quarter

Swift & Choi Dev., LLC v. Pa. PUC

No. 1647 C.D. 2019, Decided January 29, 2021

This case involved the Commission’s denial of Swift & Choi’s Petition to Intervene in Aqua Pennsylvania Wastewater, Inc.’s (Aqua) Application to Acquire the Wastewater System of Cheltenham Township.  The Commission held that Swift & Choi failed to show that it had a right to intervene or that Swift & Choi demonstrated a direct interest in the subject matter of the proceeding.  Thus, the Commission adopted the Administrative Law Judge’s Recommended Decision to approve the sale, subject to modifications and conditions.

On appeal, Swift & Choi sought to have the Commission’s Order vacated and asked the Commonwealth Court to hold it had the right to intervene and remand the case for discovery and new evidentiary hearings on the application for sale.  Cheltenham and Aqua also filed a joint application for summary relief with the Court pursuant to Pa. R.A.P 1532(b).  The Court held that (1) Swift & Choi had not asserted in its brief that it has a right conferred by a state or federal statute; (2) Swift & Choi’s right to develop certain property is no longer clear and, therefore, the Commission’s did not abuse its discretion in determining hat Swift & Choi’s interest was too speculative to be an interest “directly affected”; and (3) the public interest was actively represented in this case and it is not clear that Swift & Choi’s participation was necessary or appropriate for the administration of the statutes at issue.  Thus, the Commonwealth Court affirmed the Commission’s Order. 

Respond Power, LLC v. Pa. PUC 

No. 260 C.D. 2020, 2021 Pa. Commw. Unpub. LEXIS 93 – Decided February 9, 2021

In this case, Respond Power, LLC, an electric generation supplier (EGS), filed Complaints challenging the application of the Commission-approved clawback provision in the Electric Generation Supplier Coordination Tariffs of Penelec and West Penn Power, electric distribution companies.  The complaints alleged that Penelec and West Penn Power were threatening to withhold Purchase of Receivables payments from Respond Power due to Respond Power’s excessively high rate of account write-offs stemming from charges during the winter of 2013-2014 (a/k/a polar vortex winter). Commission dismissed Respond Power's complaints against the Companies. On appeal, Respond Power alleged that the Commission (1) unlawfully permitted retroactive ratemaking by approving the tariffed clawback provision and (2) violated Respond Power’s due process rights. 

The Commonwealth Court held that the Commission correctly dismissed Respond Power's complaints against the Companies in part because the complaints constituted an unlawful collateral attack of a final Commission Order in violation of 66 Pa.C.S. § 316. The Court also held that the Default Service Petition, supporting testimony, and accompanying Supplier Tariff supplements clearly apprised Respond Power of the terms of the proposed Clawback Charge provision, why it was being proposed, and how it would be calculated providing adequate due process to Respond Power.  Finally, the Court held that the Commission-approved Clawback Charge in the Default Service Petition is not a rate, and therefore, the rule against retroactive ratemaking was not applicable.

Hommrich v. Commonwealth

No. 35 MAP 2020, No. 36 MAP 2020; 245 A.3d 637 (Pa. 2021), Decided February 17, 2021 by per curiam order

Mr. Hommrich filed an Amended Petition in the Commonwealth Court’s original jurisdiction challenging certain PUC net metering regulations promulgated to carry out associated provisions of the AEPS Act and seeking a declaration that the regulations are invalid and unenforceable.  The parties ultimately filed cross Applications for Summary Relief.  Hommrich argued that the PUC lacked authority to promulgate the regulations establishing criteria for net metering and that, even if the PUC has such authority, the regulations at issue violate the AEPS Act and the Commonwealth Court’s holding in Sunrise Energy, LLC v. FirstEnergy Corp., 148 A.3d 894, 901 (Pa. Cmwlth. 2016) appeal denied, 169 A.3d 1025 (Pa. 2017).  The PUC argued that Hommrich failed to prove on the pleadings that the PUC lacked authority to promulgate the regulations or that the regulations are unreasonable.  Further, the PUC asserted that it had authority to promulgate the regulations under both the AEPS Act and the Public Utility Code and argued that the regulations are a reasonable interpretation of the AEPS Act entitled to strong deference.

The Commonwealth Court issued an Opinion and Order granting in part and denying in part the cross Applications for Summary Relief.  The Court declared invalid and unenforceable the regulations at 52 Pa. Code §§ 75.12 (added reference to independent load to definition of virtual meter aggregation) and 75.13(a)(1) (requires customer-generator to have “independent load” to net meter).  Further, the Court found the definitions of “customer-generator” and “utility” in 52 Pa. Code § 75.1 to be invalid and unenforceable.  The regulations are invalid because the PUC exceeded the scope of its legislative authority in promulgating regulations that are more restrictive than the corresponding provisions of the AEPS Act.  The Court found the three remaining regulations—52 Pa. Code §§ 75.13(a)(5) (requires PUC approval for alternative energy systems with nameplate capacity of 500 kW or more to net meter); 75.16 (defines and sets rules for “large customer-generators”); and 75.17 (establishes application process for EDCs to obtain Commission approval of customer-generator status)—to be valid and enforceable. 

The Commission sought and was granted allocator to the Pennsylvania Supreme Court.  The Supreme Court affirmed the Commonwealth Court’s decision by per curiam order.

Second Quarter

Norman v. Pa. PUC 

No. 690 C.D. 2020, 2021 Pa. Commw. Unpub. LEXIS 145 – Decided March 16, 2021

In this case, Mr. Norman filed a formal complaint with the Commission alleging that PECO had improperly terminated his electric service while his prior appeal arising from a 2015 formal complaint was still pending (See Norman v. Pa. Pub. Util. Comm’n, 2018 Pa. Commw. Unpub. LEXIS 363 (Pa. Cmwlth. 2018)), would not offer him a payment arrangement, and that there were incorrect charges on his bills.  The Commission found that Mr. Norman failed to show that his service had been improperly terminated or that there were incorrect charges on his bills, but did find that he was entitled to a payment arrangement for the unpaid arrearage.  Mr. Norman appealed the disposition of his 2017 complaint.

The Court affirmed the Commission’s Order, in particular finding that since Mr. Norman had sought a stay of the Commission’s Order dismissing his 2015 complaint, and that said stay had been denied both by the Commission and by the Commonwealth Court, PECO was not barred from terminating his service for nonpayment of a delinquent account during the pendency of the 2015 appeal pursuant to Section 316 of the Code.  Further, the Court found that Mr. Norman’s 2015 complaint had been fully litigated and that the Commission’s order in that proceeding was final and unappealable, and therefore his attempts to relitigate the 2015 complaint through his 2017 complaint was improper.

Philadelphia Gas Works v. Pennsylvania Public Utility Commission. Appeal of: SBG Management Services, Colonial Garden Realty Co., L.P. and Simon Garden Realty Co., L.P.

2021 Pa. LEXIS 1910, 2021 WL 1688398, decided April 29, 2021

In an initial proceeding before the Pennsylvania Public Utility Commission (Commission), SBG Management Services, et al. – Owner of a few multi-unit residential buildings (SBG) challenged inter alia: 1) charges assessed by Philadelphia Gas Works (PGW); 2) PGW’s methodology for applying payments to SBG’s gas service accounts; and 3) the amount of interest PGW was assessing on overdue charges. As a result of the charges, methodology and interest, several of SBG’s accounts became delinquent and, consequently, PGW recorded municipal liens due to these delinquencies.

In its Order, the Commission concluded that, once a lien is docketed, although the Commission retains jurisdiction over billing and service issues, the Commission lacks jurisdiction over the underlying debt owed.  Thus, due to this lack of jurisdiction, the Commission reasoned that its regulatory tariff interest rate of 18% could not be applied by PGW to delinquent accounts for which a lien had also been docketed.  After holding that the tariff interest rate does not apply to docketed liens, the Commission directed PGW to provide bill credits, which “shall be subject to collection through the civil judicial process.”  The Commission also imposed a civil penalty for PGW’s violation of the Public Utility Code and the Commission’s regulations. 

However, on PGW’s appeal of the Commission Order, the Pennsylvania Commonwealth Court determined that, because docketing a lien does not amount to a judgment, PGW’s regulatory tariff interest rate could continue to be applied by PGW to delinquent accounts for which a lien had also been docketed. SBG appealed the Commonwealth Court Order to the Pennsylvania Supreme Court. The Pennsylvania Supreme Court agreed with the Commission’s ultimate determination that the tariff interest rate of 18% does not apply to outstanding amounts covered by a lien docketed in Philadelphia Court of Common Pleas.  In its Order, the Court concluded that, pursuant to Section 7106(b) of the Municipal Claims and Tax Lien Law, 53 P.S. § 7106(b), once the lien is recorded, the regulatory tariff rate no longer applies.  Thus, the Court reversed the Order of the Pennsylvania Commonwealth Court and upheld the Commission’s Orders.

Fox Ridge Village v. Pennsylvania Public Utility Commission

854 CD 2020, 258 A.3d, 1161 2021 Pa. Commw. Unpub. LEXIS 289, Decided June 9, 2021

This Case stemmed from a dispute between Pennsylvania American Water Company (PAWC) and the developer of Fox Ridge Village as to whether the developer breached the terms of the agreement for PAWC to provide service to Fox Ridge Village.  Because of the alleged failure of the developer to adhere to the terms of the agreement regarding construction of water facilities, PAWC to decline to provide the agreed-upon water service until such terms were met. The developer filed a complaint with the Commission. After substantial pre-hearing litigation, during which PAWC commence provision of water service to Fox Ridge Village, the developer claimed that an oral settlement had been reached with PAWC, which PAWC denied. Counsel for the developer appeared at the evidentiary hearing before a Commission Administrative Law Judge but, on the basis of the alleged oral settlement and PAWC’s commencing of service, declined to present any evidence or arguments.  Ultimately, the ALJ entered an order granting PAWC’s petition for declaratory relief, finding that PAWC complied with the relevant legal authority when it refused to accept water facilities constructed, or anticipated to be constructed, by the Developer and to provide the Development with water service, which was affirmed by the Commission. The developer filed a Petition for Review with the Commonwealth Court.

The Court affirmed the Commission’s Order The entry of a declaratory order by the PUC is within the PUC 's sound discretion, per Section 331(f) of the Code. The Court rejected the Developer’s assertion that PAWC’s commencing the provision of water service to the Development rendered the entire proceeding moot. The Court noted that the Developer’s continued litigation before the ALJ up until the date of the evidentiary hearing, and attempts to remove the matter back to the trial court, belied the Developer’s claims that there remained no controversy. The Court also noted that the issue which formed the basis for the ALJ's decision was not whether PAWC had provided water to the Development, but rather whether PAWC's initial refusal to do so was proper and complied with the applicable statutory and regulatory requirements. As such, the Court found no error by the ALJ and the PUC in their conclusion that a case or controversy remained in this matter when granting declaratory relief to PAWC.

Third Quarter

Tanya J. McCloskey, Acting Consumer Advocate (First Energy) v. Pennsylvania Public Utility Commission / Tanya K. McCloskey, Acting Consumer Advocate v. Pennsylvania Public Utility Commission (Newtown Artesian Water) 

Nos. 24/25 MAP 2020 / 26 MAP 2020, 255 A.3d 416 (Pa. 2021), Decided July 21, 2021

This case involved four subsidiaries of FirstEnergy Corporation and Newtown Artesian Water Company filing with the Commission to add Distribution System Infrastructure Charge (DSIC) riders to their existing tariffs to recoup infrastructure expenditures. In challenging these DSIC riders, the Office of Consumer Advocate (OCA) argued that the Utilities failed to account for income tax deductions and credits related to the infrastructure expenses, which the OCA argued was required by Section 1301.1(a). The OCA also argued that the DSIC calculation should incorporate the tax benefits received by the utilities, through the inclusion of ADIT, and state income tax deductions. The Commission concluded that Section 1301.1(a) did not require the calculation changes sought by the OCA. Subsequently, the OCA appealed the Commission’s decisions, which ultimately went before the Supreme Court of Pennsylvania.

The Supreme Court found (1) that Section 1301.1(a) applies to the DSIC; (2) that Section 1301.1(b) was not ambiguous simply because one portion of the statute results in increased rates while another provision of the same statute had the opposite effect; and (3) that Section 1301.1 supplements rather than conflicts with the DSIC computations currently set forth in the statute at Sections 1351 and 1357.  Therefore, the Supreme Court remanded these matters back to the Commission for the purpose of requiring the utilities to revise their tariffs and DSIC calculations in accordance with Section 1301.1(a) of the Public Utility Code.

John R. Evans, Small Business Advocate v. Pennsylvania Public Utility Commission

No. 421 CD 2020 / 422 CD 2020, 264 A.3d 833, Decided September 29, 2021

In this case, Philadelphia Gas Works (PGW) filed a petition seeking expedited review and approval of its pilot program incorporating the CAP Policy Statement Amendments into its Universal Service and Energy Conservation Plan (USECP).  The Office of Consumer Advocate (OCA) opposed expedited review and approval of any changes to PGW's existing USECP, due to the potential financial impact on PGW’s ratepayers, and requested a full and public opportunity for comment.  The Office of Small Business Advocate (OSBA) likewise noted that PGW's business customers are required to pay a portion of the costs related to CAP, and therefore would be affected by PGW’s pilot program.  By majority vote, the Commission approved PGW’s pilot program, acknowledging that increased CAP costs would likely result in a greater financial burden on some ratepayers, but concluding that the benefit provided by the Pilot Program would likely outweigh the harm caused by increased CAP costs.  The OCA and OSBA appealed. 

On appeal, the Commonwealth Court found that procedural due process protections applied because the Commission's approval of PGW's petition would affect the property interests of PGW’s residential and small business ratepayers, whose interests are represented by OCA and OSBA, respectively. The Court also found that Commission’s limited process in this case did not provide OCA or OSBA a real and meaningful opportunity to be heard on PGW's Petition, and that PGW’s upcoming USECP proceeding did not provide a meaningful post-deprivation process and remedy that cured the due process violation. Accordingly, the Court vacated the Commission’s Order and remanded matters to the Commission for further proceedings.

Fourth Quarter

Energy Transfer v. Eric Friedman / Pennsylvania Public Utility Commission v. Eric Friedman

No. 24/25 MAP 2021, 265 A.3d 421 (Pa. 2021), December 21, 2021

This case involved the Commission’s denial of a Right-to-Know Law request, on the grounds that the responsive records had been designated as confidential security information (CSI) and thus were protected from disclosure under the Public Utility Confidential Security Information Disclosure Protection Act, 35 P.S. §§ 2141.1-2141.6 (CSI Act).  Therefore, the records were exempt from disclosure under the RTKL.  Mr. Friedman sought review from the Office of Open Records (OOR), which ordered disclosure of the responsive records on the grounds that Energy Transfer had not followed the correct procedure for designating certain records as CSI.  The Commission appealed the OOR’s decision and ultimately the case was heard by the Supreme Court of Pennsylvania.

The Supreme Court held that the OOR did not have authority to reconsider the nature of the CSI-designated records or the public accessibility of those records. Having reviewed the purposes and provisions of the RTKL and the CSI Act, the Supreme Court concluded that reconciling the two statutes weighed in favor of the PUC having exclusive jurisdiction with regard to CSI.  As such, the Supreme Court held that, upon receipt of CSI-designated records and supporting affidavits, the OOR should have yielded jurisdiction of Friedman's request to the Commission.  Therefore, the Supreme Court reversed the OOR’s order.