2025

First Quarter

Middlesex Water Company v. Pennsylvania Public Utility Commission, et al., United States Court of Appeals for the Third Circuit, No. 24-1186

On January 9, 2025, the U.S. Court of Appeals for the Third Circuit issued an opinion affirming the January 18, 2024 memorandum opinion of the U.S. District Court for the Middle District of Pennsylvania, which dismissed the federal law claims of Middlesex Water Company challenging the Commission’s November 18, 2021 Opinion & Order in Petition of Twin Lakes Utilities, Inc. for a Commission Order Authorizing the Acquisition of Twin Lakes Utilities, Inc. by a Capable Public Utility Pursuant to 66 Pa. C.S. § 529, Docket Nos. P-2020-3020914, et al. (November 2021 Order).  

The Third Circuit found that the District Court correctly determined that Middlesex’s claims were barred by the doctrine of res judicata. Specifically, the Third Circuit found that Middlesex’s claims were precluded by the prior adjudication of Twin Lakes’ claims before the Pennsylvania state courts. The Third Circuit found that the thing sued upon and the cause of action were identical – Middlesex’s objections to the Commission’s escrow condition. The Third Circuit found that Middlesex was in privity with Twin Lakes because the parties were in a sufficiently close relationship wherein Middlesex controlled Twin Lakes and Twin Lakes raised arguments and objected to the escrow condition on behalf of Middlesex. The Third Circuit did not reach issue preclusion or the merits of Middlesex’s constitutional challenges to the escrow condition.

Burhans-Crouse Funeral Home v. Pa. Pub. Util. Cmm’n, 500 CD 2024

Decided  March 5, 2025.

On March 5, 2025, a Commonwealth Court panel issued a unanimous Memorandum Opinion and Order affirming the Commission’s April 4, 2024 Order.  Through this Order, the Commission approved Columbia Gas of Pennsylvania, Inc.’s Application for approval to abandon natural gas service to Burhans-Crouse Funeral Home.  Specifically, the Court affirmed the April 2024 Order after finding that (1) the Commission properly determined that Columbia Gas’s decisions with respect to its evaluation of potential options for replacing the gas main serving Burhans-Crouse was a matter of the company’s managerial discretion; (2) the Commission properly applied the Duncannon and Victor Gas factors for abandonment of gas service and found that the factors supported abandonment of service to Burhans-Crouse; and (3) the Commission’s decision to approve abandonment was supported by substantial evidence.

The Court focused its analysis on the four Duncannon factors for abandonment of utility service.  First, the Court agreed with the Commission that the evidence established that the loss to Columbia Gas from replacing the main—which would cost approximately $300,000 and result in an annual revenue deficiency of $31,688—was significant.  In addition, the Court agreed that the evidence established that (2) the loss to Columbia Gas outweighed the hardship to the public from discontinuance of service; (3) there was no prospect for additional users on the section of the main serving Burhans-Crouse that could reduce the annual revenue deficiency to an extent that would justify replacement of the line; and (4) electricity was an available alternate energy source (as proven by the estimate for converting the funeral home to electricity obtained by Burhans-Crouse itself).  Accordingly, the Court agreed with the Commission that the Duncannon factors weighed in favor of abandonment.

Second Quarter

Charles and Laura Johnson v. Pa. Pub. Util. Comm’n, 192 C.D. 2024, Decided on April 15, 2025 - application for reargument denied June 16, 2025. 

On April 15, 2025, in an unreported decision, the Commonwealth Court reversed a PUC order dated December 21, 2023 that had determined the PUC had jurisdiction to consider Duquesne Light’s duties in proving notice to the Johnsons and the public regarding possible locations of its planned electrical transmission line.  Also, the Court vacated the PUC’s second order transferring the case to the trial court as there was nothing to transfer.    

Third Quarter

Philadelphia Industrial and Commercial Gas Users Group (PICGUG) v. Pa. Pub. Util. Comm’n, 128 C.D. 2024, Decided on August 1, 2025.

On August 1, 2025, in an unreported decision, the Commonwealth Court vacated and remanded the Commission’s January 18, 2024 Order regarding Philadelphia Gas Works’ (PGW) base rate case.  The Commonwealth Court found that the Commission's reasons for approval of PGW's proposed cost allocation method were inadequately explained. Specifically, the Commonwealth Court questioned the way PGW is treating Rate Interruptible Transportation (Rate IT) customers under its Class Cost of Service Study (CCOSS). 

The Commonwealth Court remanded the mater to the Commission for further explanation and clarification regarding: (1) Whether treating PICGUG as technically “Firm” for purposes of rate allocation while, at the same time, requiring it to adhere to the obligations of interruptible customers under PGW’s Tariff violates the Tariff; (2) How, under a cost causation analysis, Rate IT customers caused PGW’s distribution mains-related costs to be incurred; (3) Whether the Commission applied a new retrospective benefits or “value of service” principle to conclude that interruptible customers should pay for the benefits that they ultimately received from a utility service for purposes of rate allocation, and if so, whether that principle is consistent with cost causation principles or whether it is a new ratemaking principle that should replace or supplement cost causation as the operative ratemaking rationale in this unique situation; and (4) Whether employing a benefits principle can be squared with the Commission’s duty to impose only “just and reasonable” rates considering the interruptible nature of rate IT customers and their investment in systems to allow for interruptions in the event that

PGW does call for a curtailment.

David A. Romanoski v. Pa. Pub. Util. Comm’n, 663 C.D. 2024, Decided on August 7, 2025.

On August 7, 2025, in an unreported decision, the Commonwealth Court affirmed the Pennsylvania Public Utility Commission's Order, upholding the Commission's dismissal of the complaint due to lack of subject matter jurisdiction.  The Commonwealth Court agreed that once the railroad-highway crossing was abolished, the Commission lost jurisdiction of the wall at issue. 

Transource Pennsylvania, LLC v. Defrank, No. 24-1045, --- F.4th ----, (3d Cir. 2025), Decided September 5, 2025.

On September 5, 2025 the U.S. Court of Appeals for the Third Circuit issued an opinion affirming the December 6, 2023, memorandum opinion of the U.S. District Court for the Middle District of Pennsylvania, which held that the Commission’s Order was invalid under the Supremacy Clause of the United States Constitution.

According to the Court, the Commission’s Order denying Transource’s application violated the Supremacy Clause because it obstructed federal objectives and conflicted with FERC’s mandate to ensure just, reasonable, and non-discriminatory rates and practices, promote regional interconnection, and reduce regional congestion.  The Court deemed that the PUC’s reasons for denying the siting applications amounted to second-guessing PJM’s FERC-approved benefit-cost methodology in determining which projects should be built.

Because the Court found that the Commission Order was invalid under the Supremacy Clause, it did not address the alleged dormant Commerce Clause issues. 

Interstate Gas Supply, Inc. v. Pa. Pub. Util. Comm’n, No. 10 MAP 2024, --- A.3d ---- (Pa. 2025), Decided on September 25, 2025. 

On September 25, 2025, the Supreme Court of Pennsylvania issued an Opinion affirming the Commonwealth Court’s April 28, 2023 Order, which affirmed the Commission’s April 14, 2022, Opinion and Order. 

The Supreme Court held that an Electric Distribution Company (EDC) has no duty to provide on-bill billing for non-commodity goods and services under Section 1502 of the Public Utility Code (Code) or Sections 2807(c) and 2804(6) of the Electricity Generation Customer Choice and Competition Act (Competition Act).  The Court concluded that an EDC's use of on-bill billing for non-commodity goods and services does not constitute "service" as defined by Section 102 of the Code.  The Court also determined that non-commodity goods and services do not constitute "electric services," and the billing thereof does not constitute "transmission and distribution service" as contemplated by the relevant sections of the Code and Competition Act. 

Therefore, EDCs are not required to provide on-bill billing services for non-commodity goods and services, and their exclusive use of such billing for their own non-commodity offerings does not constitute a violation of Pennsylvania's Public Utility Code or regulations.

Fourth Quarter

NazAarah Sabree, Small Business Advocate v. Pa. Pub. Util. Comm’n,  1307 C.D. 2022, --- A.3d ---- (Pa. Cmwlth. 2025), Decided on November 17, 2025. 

On November 17, 2025, the Commonwealth Court vacated the PUC’s October 27, 2022 Order (which denied reconsideration of its May 16, 2022 Order) and remanded the matter to the PUC for further proceedings.  The Court held that the Commission erred as a matter of law in approving Aqua Pennsylvania, Inc.’s methodology for allocating the water rate increase and the Act 11 wastewater subsidy. 

The Court identified errors in the Commission's approach, claiming it violated established ratemaking principles.  First, the Court held that the Commission violated principles established by Lloyd v. Pennsylvania Public Utility Commission, 904 A.2d 1010 (Pa. Cmwlth. 2006) by viewing the cost of providing service to Aqua Water customers and the Act 11 wastewater subsidy as inclusive when setting water rates.  This approach allowed the principles of gradualism underlying Act 11 to override the cost of providing water service as the primary ratemaking concern.  The Court held that as a consequence of including the wastewater subsidy in water rates, the Commission masked the actual cost of providing water service to Aqua Water customers.  This created a situation where over 91% of Aqua's water customers, who do not have Aqua wastewater service, would effectively be paying for two wastewater requirements: (1) the Act 11 wastewater subsidy approved in this case and (2) their own wastewater service to a separate utility provider.

Next, the Court ruled that the Commission's method for allocating the Act 11 wastewater subsidy violated established ratemaking principles because it allocated the subsidy to Aqua's combined water and wastewater customer base regardless of the differences in wastewater usage among customer classifications.  The court emphasized that while different customer classifications may be charged different rates, those rates must be primarily based on the cost of providing service for each specific classification.