Opinion ID: 1389212
Heading Depth: 1
Heading Rank: 3

Heading: PSC Jurisdiction Over the Municipality

Text: In the petition for writ of mandamus filed with this Court, the PSC requested that Fayetteville be required to (1) comply with the June 26, 2001, PSC order regarding the reconnection fee; (2) file a tariff with the PSC; and (3) comply with West Virginia Code § 8-20-10, regarding landlord liability for a tenant's delinquency. Upon oral argument, however, this Court was informed that the issue of filing a tariff had been resolved; thus, the writ presently encompasses only the issues of the ordinance requiring a reconnection fee under certain circumstances and compliance with West Virginia Code § 8-20-10. The extent of PSC authority over a municipality is central to resolution of this matter. The PSC's considerable powers concerning the establishment of rates for public utilities are developed in West Virginia Code § 24-2-3, which states, in pertinent part, as follows: The [PSC] shall have the power to enforce, originate, establish, change and promulgate tariffs, rates, joint rates, tolls and schedules for all public utilities.... And whenever the [PSC] shall, after hearing, find any existing rates ... unjust, unreasonable, insufficient or unjustly discriminatory or otherwise in violation of any of the provisions of this chapter, the [PSC] shall by an order fix reasonable rates ... to be followed in the future in lieu of those found to be unjust, unreasonable, insufficient or unjustly discriminatory or otherwise in violation of any provisions of law [.] In syllabus point one of West Virginia-Citizen Action Group v. Public Service Commission, 175 W.Va. 39, 330 S.E.2d 849 (1985), this Court explained: [t]he Public Service Commission was created by the Legislature for the purpose of exercising regulatory authority over public utilities. Its function is to require such entities to perform in a manner designed to safeguard the interests of the public and the utilities. Its primary purpose is to serve the interests of the public. Boggs v. Public Service Commission, 154 W.Va. 146, 174 S.E.2d 331 (1970). The PSC's jurisdiction is further derived from West Virginia Code § 24-2-7(a) (1979) (Repl.Vol.2001), which provides: Whenever, under the provisions of this chapter, the [PSC] shall find any regulations, measurements, practices, acts or services to be unjust, unreasonable, insufficient or unjustly discriminatory, or otherwise in violation of any provisions of this chapter, or shall find that any service is inadequate, or that any service which is demanded cannot be reasonably obtained, the [PSC] shall determine and declare, and by order fix reasonable measurements, regulations, acts, practices or services, to be furnished, imposed, observed and followed in the state in lieu of those found to be unjust, unreasonable, insufficient, or unjustly discriminatory, inadequate or otherwise in violation of this chapter, and shall make such other order respecting the same as shall be just and reasonable. The PSC's authority over rates and charges of municipalities, however, is expressly limited by the statutory scheme. Fayetteville contends that it is not controlled by the PSC scheme of regulation of rates and charges since it is a municipality, citing West Virginia Code § 24-2-3 and § 24-2-4b as support for that proposition. West Virginia Code § 24-2-3, in addition to providing more general powers of the PSC, contains a decisive caveat, as follows: Provided, That the commission may exercise such rate authority over municipal utilities only under the circumstances set forth in section four-b of this article. West Virginia Code § 24-2-4b(a) also explains the limitation regarding authority over rates and charges of municipalities, stating as follows, in relevant part: The rates and charges of ... municipally operated public utilities ... are not subject to the rate approval provisions of section four or four-a [§ 24-2-4 or § 24-2-4a] of this article, but are subject to the limited rate provisions of this section. Resolution of the issues presently before this Court must be founded upon an accurate understanding of the extent of the exemption provided by West Virginia Code § 24-2-4b. The statute merely exempts municipalities from the rate approval sections of 24-2-4 and 24-2-4a; it does not deprive the PSC of jurisdiction over the municipality or eliminate the PSC's authority to otherwise address issues of the municipally operated public utilities. The rate making functions, statutorily limited with regard to municipalities, are not identical to the adjudicatory functions. [5] In exempting municipalities from the extremely detailed rate procedures outlined in sections 24-2-4 and 24-2-4a, the statutory scheme does not remove municipalities from the authority of the PSC to exercise its general powers to require reasonable, non-discriminatory practices based primarily upon the cost of service. Specifically, West Virginia Code § 24-2-4b(b) provides that [a]ll rates and charges set by ... municipally operated public utilities ... shall be just, reasonable, applied without unjust discrimination or preference and based primarily on the costs of providing these services. The exemption upon which Fayetteville relies simply does not reach the question of what happens when a practice of a municipally operated public utility is unreasonable. Nor does it inhibit the right of a consumer to allege unreasonableness or absence of cost-based services. [6] It does not undermine the PSC's right or obligation to discharge its regulatory responsibilities. Based upon the statutory provisions regarding PSC authority, we find that the PSC did not exceed its statutory authority by exercising jurisdiction over the issues presented in Mr. Neff's complaint and the matters of statutory compliance raised by the ordinance's reference to landlord liability. Properly exercising its jurisdiction, the PSC found that Mr. Neff's sewer service had not been disconnected and that it was consequently improper for the town to charge him a reconnection fee. The PSC concluded as follows: The Commission concludes it would be an unreasonable practice for a utility and/or municipality, which provides both water and sewer service, to charge two reconnection fees when only water service is reconnected after being disconnected due to delinquent water and sewer bills since the utility and/or municipality is physically making only one reconnection. The PSC based these conclusions upon the facts of Mr. Neff's case and applicable guidelines regarding imposition of reconnection fees. See 150 CSR 7-4.8.5a.B; 150 CSR 5-4.5.3a.B. Having reviewed the PSC determination regarding imposition of reconnection fees, we find that the PSC findings are not contrary to the evidence, without evidence to support them, arbitrary, or result from a misapplication of legal principles. Likewise, we find no reason to disturb the PSC's conclusions with regard to its determination of the illegality of the ordinance holding a landlord liable for a tenant's delinquency. Fayetteville's ordinance, quoted above, attempts to hold a landlord liable for the delinquencies of the tenant, and counsel for the town has asserted that such liability is justified based upon the contractual relationship existing not only between the municipally operated public utility and the tenant, but also between the utility and the landlord. This means of establishing landlord liability was attempted by the City of Keyser and challenged in the PSC forum in 1991. The administrative law judge ruled that Keyser's ordinance conflicted with West Virginia Code § 8-20-10(c) and was void. The PSC affirmed the administrative law judge's findings, articulating that a while a landlord may choose to contract directly with the municipality if he seeks to furnish utilities as an element of the rental package, the statute is not an instrument through which municipalities can compel a landlord to contract with the municipality and to assume responsibility for the tenant's delinquencies. This Court denied Keyser's petition for appeal from that PSC decision. In the present case, premised upon the distinct language of the statute and the failed prior attempt by the City of Keyser to circumvent the intent of the statute, the PSC concluded that Fayetteville's ordinance was in violation of the statute. This Court has consistently held that [w]hen a provision of a municipal ordinance is inconsistent or in conflict with a statute enacted by the Legislature the statute prevails and the municipal ordinance is of no force and effect. Syl. Pt. 1, Vector Co. v. Board of Zoning Appeals, 155 W.Va. 362, 184 S.E.2d 301 (1971); see also Hock v. City of Morgantown, 162 W.Va. 853, 253 S.E.2d 386 (1979). Finding no indication that the PSC conclusion regarding the landlord statute was contrary to the evidence, without evidence to support it, arbitrary, or resulted from a misapplication of legal principles, we grant the requested writ of mandamus.