2024

First Quarter

Middlesex Water Company v. Pennsylvania Public Utility Commission

Docket No. 3:23 CV-483, Decided January 18, 2024, Unreported Opinion

On January 18, 2024, the U.S. District Court for the Middle District of Pennsylvania dismissed with prejudice Middlesex Water Company’s (Middlesex) complaint finding that all four elements of claim preclusion were met. First, the subject matter of the state and federal lawsuits is identical in that they both challenge the constitutionality of a provision of the PUC’s November 18, 2021, order requiring Middlesex to place $1.675 million into escrow. Second, the causes of action are the same. Middlesex’s request for just compensation in the form of damages did not transform its federal claims into separate causes of action for purposes of claim preclusion. Third, Middlesex was in privity with Twin Lakes in the prior state court proceedings because Middlesex effectively directed and controlled the action through Twin Lakes, which “adequately represented” Middlesex’s interests. Lastly, Middlesex’s capacity to sue or be sued is sufficiently identical to its capacity in the prior state court proceeding via Twin Lakes.

Buffalo & Pittsburgh Railroad, Inc. v. PUC

Docket No. 489 CD 2023, Pa. Cmwlth. Unpublished Memorandum Opinion – March 1, 2024

The Commonwealth Court upheld the Commission’s decision to direct Buffalo & Pittsburgh Railroad remove three railroad bridge structures in Knox Township, Jefferson County.  The Court found the decision that three Railroad Crossings over township roads were unsafe was supported by substantial evidence given the bridges’ conditions and the abutments’ locations even though there was no evidence of accidents involving the abutments and the roads were less travelled township roads. There was no error in considering PennDOT information regarding vehicle safety even if the material relates to state highways rather than Township roads. Further, there was no error in  considering the concept of clear zones on the narrowed roadway next to the abutments when evaluating the safety of crossings under the Commission’s jurisdiction.  The Commission has authority to correct a hazardous condition, even where there is no record evidence of any serious accidents. Thus, the lack of prior accidents does not preclude the Commission from concluding that a condition is hazardous and directing that the hazardous condition be abated.  Finally, the Court held that although the bridges may have been constructed a hundred years earlier, the test is not whether they were a safety risk when constructed 100 years ago, but rather whether the Crossings pose a safety risk now. Given changes to transportation over the last 100 years, a manual that describes dangers to modern drivers from objects in a road’s clear zone is relevant to the Crossings that continue to be used today whose abutments are in the clear zone.

Second Quarter

The Tenant Union Representative Network v. Pa. Pub. Util. Comm’n, Docket No. 10 CD 2023

Decided by Commonwealth Court April 2, 2024.

TURN appealed the Commission’s interpretation of Footnote 3 to the 2015 Settlement Agreement on PECO Energy Company’s (PECO) proposed Universal Service and Energy Conservation Plan for 2013-2015.  In pertinent part, Footnote 3 said, “If the Commission changes the energy burden ranges set forth in its Policy Statement, PECO will utilize the new maximum allowable energy burden for each poverty level [in its Customer Assistance Program].”  In TURN’s opinion, the footnote constituted an automatic, self-executing adjustment clause requiring PECO to immediately adopt 2019 revisions to the energy burden thresholds into its existing Customer Assistance Program.  However, the Commission found that the footnote did not and could not require immediate and automatic adoption of the revised energy burdens.^[1]

On April 2, 2024, the Commonwealth Court issued an opinion affirming the Commission.  The Court found that the Commission did not err in interpreting Footnote 3.  Specifically, the Court found that the Commission (1) did not fail to enforce its prior orders incorporating the footnote; (2) properly applied the principles of contract construction in interpreting Footnote 3; (3) applied the correct burdens of proof to PECO and TURN and properly determined that PECO met its burden while TURN did not; (4) properly determined that PECO had substantially complied with the terms of the 2015 Settlement Agreement; and (5) properly determined that Footnote 3 was not central to TURN’s decision to enter into the 2015 Settlement Agreement.

According to the Court, the footnote did not require immediate adoption of the revised energy burdens because the language of Footnote 3 did not expressly set a specific time for PECO to adopt the revised energy burdens, which meant that PECO only had to do so “within a reasonable time.”  Further, the Court found that TURN’s interpretation of the footnote—that it is self-executing—(1) ran counter to the principles of contract interpretation; (2) ignored the term of the 2019 Final CAP Policy Statement Order directing utilities to file addendums to their USECPs for Commission approval before implementing the revised energy burdens; (3) would circumvent the Commission’s normal CAP review and approval process; and (4) would deprive other stakeholders of due process. As such, the Court rejected TURN’s interpretation of Footnote 3 and found that the Commission did not err in determining that Footnote 3 did not constitute an automatic, self-executing adjustment clause.

[1] Tenant Union Representative Network v. PECO Energy Company, Docket No. C-2020-3021557 (Order entered December 8, 2022).

Third Quarter

Repsol Oil and Gas, U.S.A., Inc. v. PUC, 613 CD 2022

Decided July 23, 2024

Repsol Oil and Gas filed a petition for declaratory and injunctive relief at the Commonwealth Court argued that it is not the liable producer for 2022 Impact and Spud Fees because Rockdale owned, operated and held permits for wells the entirety of 2021. In an Opinion not Reported, the Commonwealth Court agreed with the Commission’s argument that Repsol must first seek redress before the Commission, finding that all administrative remedies had not been exhausted at the PA PUC.  Thus, the Commonwealth Court dismissed Repsol’s Petition.

Hughes v. Pa. Pub. Util. Comm’n, No. 827 C.D. 2020, 322 A.3d 982 (Pa. Cmwlth. 2024)

Decided August 1, 2024

On August 1, 2024, in a reported decision, the Commonwealth Court affirmed the Commission’s Order regarding PPL Electric Utilities Corporation’s (PPL) installation of a smart meter pursuant to Act 129 of 2008 (Act 129).  In its Order, the Commission dismissed the Hughes’ Complaint for failure to prove a violation of Section 1501 of the Public Utility Code, 66 Pa.C.S. § 1501. 

On appeal, the Hughes claimed that: (1) Act 129 violates their constitutional rights arising under the Fourth Amendment of the United States (U.S.) Constitution and Article I, Section 8 of the Pennsylvania Constitution against unreasonable searches and seizures; (2) the Commission applied an erroneous burden of proof by requiring the Hughes to establish a violation of Section 1501 of the Code; and (3) the Commission’s determination is not supported by substantial evidence.  The matter was submitted on briefs.

Regarding the first issue, the Commonwealth Court noted that Pennsylvania Supreme Court’s Opinion in Povacz, et al. v. Pa. Pub. Util. Comm’n, 280 A.3d 975 (Pa. 2022) (Povacz II), established that Act 129 mandates smart meters for all customers and does not contain and opt-out provision, and denied allocatur as to any constitutional issues.  The Commonwealth Court also explained that the Fourth Amendment’s protection against unlawful searches and seizures applies only to government actors.  The Commonwealth Court held that PPL does not act as an agent of the government in furnishing utility services.  Regarding the second issue, the Commonwealth Court noted that, in Povacz II, the Pennsylvania Supreme Court held that a customer alleging a violation of Section 1501 must establish a “conclusive causal connection” between radio frequency exposure from a smart meter and the claimed health effects by a preponderance of the evidence.  The Commonwealth Court held that the Commission did not err in applying this burden of proof.  Finally, regarding the third issue, the Commonwealth Court explained that the Commission found that PPL’s evidence from a medical expert and professor of electrical engineering outweighed the Hughes’ lay testimony regarding the potential harm from smart meters.  The Commonwealth Court held that the Commission’s findings are supported by substantial evidence.  

Thus, the Commonwealth Court affirmed the Commission’s Order.  The Commonwealth Court also subsequently denied the Hughes’ Petition for Reconsideration on October 1, 2024.  The Hughes filed a Petition for Allowance of Appeal with the Pennsylvania Supreme Court on October 30, 2024, which remains pending as of March 2025.

Center Township, Butler County and Summit Township, Butler County v. Pa. Pub. Util. Comm’n, Nos. 1459 C.D. 2023 and 1460 C.D. 2023, 2024 WL 4296876 (Pa. Cmwlth. 2024)

Decided September 26, 2024

On September 26, 2024, in an unreported decision, the Commonwealth Court dismissed the consolidated Petitions for Review filed by Center Township, Butler County and Summer Township, Butler County (collectively, the Townships) seeking to reverse the Commission’s Order regarding Pennsylvania-American Water Company’s (PAWC) Application to acquire  the Butler Area Sewer Authority’s (BASA) wastewater collection and treatment system.  In its Order, the Commission approved PAWC’s Application and granted the parties’ Joint Petition for Settlement without modification.  The Commission also granted a Motion to Strike the Township’s Reply Exceptions filed by PAWC and BASA, the City of Butler, and the Township of Butler (collectively,  Butler Parties) on the basis that the Townships waived their arguments by not raising them at an earlier stage.  

On appeal, the Townships claimed that the Commission erred in approving PAWC’s Application in light of the Opinion issued in Cicero v. Pa. Pub. Util. Comm’n, 300 A.3d 1106 (Pa. Cmwlth. 2023) (Cicero) and that the Commission erred by striking the Township’s Reply Exceptions.  PAWC filed an Application to Dismiss the Petitions for Review and the Butler Parties filed a Motion to Quash the Appeals for Lack of Issue Preservation.  The matter was submitted on briefs.

The Commonwealth Court stated that issues not preserved by the filing of exceptions or raised before the administrative agency cannot generally be considered on appeal.  Citing Hess v. Pa. Pub. Util. Comm’n, 107 A.3d 246 (Pa. Cmwlth. 2014), the Commonwealth Court explained that it has upheld the Commission’s rejection of a party’s attempt to inject a new argument at the exceptions stage of a proceeding.  With regard to Cicero, the Commonwealth Court pointed out that, after Cicero was decided: (1) the Townships voted not to oppose the settlement and to take no further action in their Protests; (2) the Joint Petition was submitted; (3) the Townships opted not to file written objections to the settlement; and (4) ALJ Guhl closed the record and issued the Recommended Decision.  Since Cicero was decided prior to these actions, the Commonwealth Court found that Cicero was not a change in circumstances justifying the Townships’ attempt to revive their expressly abandoned Protests.  Additionally, the Commonwealth Court noted that the Townships had the opportunity to raise arguments in opposition to the settlement in briefs and in written objections to the settlement, but did not object until after the record closed and the ALJ issued the Recommended Decision.  In fact, the Townships voted not to contest the settlement and went a step further by also voting to take no further action with respect to their Protests. 

Therefore, the Commonwealth Court held that the Townships failed to properly preserve their issues for appellate review and granted PAWC’s Application to Dismiss the Townships’ Petitions for Review.  In light of its holding, the Commonwealth Court did not address PAWC and the Butler Parties’ alternative arguments and dismissed the Butler Parties’ Motion to Quash as moot. The Commonwealth Court also did not reach the merits of the appeal. 

Fourth Quarter

Conyngham Twp. v. Pa. Pub. Util. Comm’n, Docket No. 113 C.D. 2024, 325 A.3d 885  (Pa. Cmwlth. 2024)

Decided October 4, 2024

On October 4, 2024, in a reported decision, the Commonwealth Court vacated and remanded the Commission’s November 1, 2023 Order regarding Conyngham Township’s (Township) Complaint alleging that the Sanitary Sewer Authority of the Borough of Shickshinny (SSABS) was providing wastewater treatment and disposal public utility service in the Township, which is beyond the SSABS’s jurisdictional limits, without a Commission-issued Certificate of Public Convenience (Certificate). In its Order, the Commission concluded that under the Municipality Authorities Act of 1945 (MAA), 53 Pa.C.S. §§ 5601, et seq., the Commission lacks jurisdiction over questions regarding the rates and services of municipal authorities like the SSABS.

On February 9, 2024, the Township filed a Petition for Review of the Commission’s Order with Commonwealth Court.  On appeal, the Township asserted that the Commission erred by concluding that it lacks jurisdiction over the Township’s Complaint regarding SSABS’s provision of service without a Certificate.  The Township argued municipal authorities operating outside of their corporate limits are required to obtain a Certificate from the Commission and claimed that the MAA does not remove municipal authorities from Commission jurisdiction. On September 9, 2024, the parties argued the appeal before a three-judge Panel. 

In its Opinion, the Commonwealth Court stated that Section 5607(d)(9) of the MAA, 53 Pa.C.S. § 5607(d)(9) did not grant the Courts of Common Please blanket jurisdiction over municipal authorities, but limited such jurisdiction to “questions involving rates or service.”  The Commonwealth Court noted that the primary consideration in obtaining a Certificate is whether it is “necessary or proper” under Section 1103(a) of the Public Utility Code, 66 Pa.C.S.§ 1103(a), and that this issue does not involve rates or service.  The Commonwealth Court concluded that the Commission had jurisdiction to consider the Township’s Complaint challenging the SSABS’s operation without a Certificate. 

Thus, the Commonwealth Court vacated the Commission’s Order and remanded the matter to the Commission for further proceedings.  On October 18, 2024, the Commission and the SSABS each filed separate Petitions for Reargument.  The Commonwealth Court denied the Petitions on November 21, 2024.  On December 23, 2024, the Commission filed a Petition for Allowance of Appeal with the Pennsylvania Supreme Court, which remains pending as of March 2025.

Richard C. Culbertson v. Pa. Pub. Util. Comm’n, No. 90 C.D. 2023

September 30, 2024 Opinion and Order of the Commonwealth Court

On September 30, 2024, the Commonwealth Court issued an unreported Memorandum Opinion and Order affirming the December 8, 2022 Order of the Pennsylvania Public Utility Commission. The Court found that Richard Culbertson failed to establish that the Commission violated his constitutional rights, erred as a matter of law or procedure, or made findings not supported by substantial evidence in the record. The Court acknowledged that Mr. Culbertson presented multiple issues in his Petition for Review and brief which the Court summarized in three overarching questions: (1) whether the Commission conducted a legally adequate investigation into Columbia’s proposed rate increase; (2) whether the Commission’s settlement process deprived Culbertson of due process; and (3) whether the rates contained in the Commission-approved “black box” settlements are just, reasonable, and in furtherance of the public interest.  The Court found in favor of the Commission on these three issues.