Court Opinion

ID: 9635791
Source: CourtListenerOpinion
Date Created: 2023-08-22 14:05:46.388483+00
Date Added: 2024-06-11T18:09:36.233222
License: Public Domain

OPINION BY
Judge COHN JUBELIRER.
Respectfully, I dissent. I believe the plain language of the statutory and regulatory provisions compel a different result.
In the present case, the parties stipulated that Spectrum Arena Limited Partnership (Spectrum) purchased its electricity from Exelon Energy (Exelon), but that the electricity it purchased from Exelon was delivered by and billed by an entirely separate entity, PECO Energy Company (PECO). The language in the Code is clear: “(c) Charges for delivery made by someone other than the vendor and billed by someone other than the vendor are not subject to tax.” 61 Pa.Code § 54.1. Applying this language to the stipulated facts, Exelon was the vendor and PECO was someone other than the vendor who delivered and billed the electricity. As such, by the plain language of Section 54.1, the charges for delivery by PECO are not subject to taxation.
I note that this conclusion is supported by the similar approach adopted by the General Assembly as to natural gas. The Natural Gas Choice and Competition Act, 66 Pa.C.S. §§ 2201-2212, like the Electricity Generation Customer Choice and Competition Act (Competition Act), 66 Pa.C.S. §§ 2801-2812, manifests the General Assembly’s intent to deregulate the respective industries. Compare 66 Pa.C.S. § 2203(3) (stating that “[t]he commission shall require natural gas distribution companies to unbundle natural gas supply services”) with 66 Pa.C.S. § 2802(14) (requiring “electric utilities to unbundle their rates and services ... to allow competitive suppliers to generate and sell electricity directly to consumers” and requiring electric utilities “to provide open access [to competitive suppliers] over their transmission and distribution systems....”) In doing so, the General Assembly utilized similar approaches, in particular, segregating the delivery function from the production function of the particular resource. In the present case, the Commonwealth acknowledged “that separately stated charges for the transportation of natural gas are not subject to [sales tax] and are not included in the purchase price of natural gas.” (Commonwealth’s Response to Spectrum’s First Set of Request for Admissions; Department of Revenue Letter Ruling (January 4, 2000) at 2 (stating that “[t]he charges for delivery of natural gas made by someone other than the vendor and billed by that entity are not subject to sales tax.”).) Neither the Commonwealth in its Brief, nor the majority in its opinion, accounts for the disparate treatment. I find these disparate treatments of similar industries, by means of similar statutory language, inexplicable.
Additionally, I find support from our Pennsylvania Supreme Court’s decision in PECO Energy Company v. Commonwealth, 591 Pa. 405, 919 A.2d 188 (2007). While the majority is correct that PECO did not address the tax neutrality provision of the Competition Act, I believe the Supreme Court’s rationale in PECO guides our analysis in the present case. In PECO, the Supreme Court reversed our Court’s decision, which found that the Competition Act “had no effect on the value of its utility realty for tax purposes.” PECO Energy Company v. Commonwealth, 828 A.2d 497, 502 (Pa.Cmwlth.2003), adopted as opinion of en banc court, 848 A.2d 1099 (2004), rev’d 591 Pa. 405, 919 A.2d 188 (2007). We reached this decision despite generally accepted accounting practices requiring that the “cost ... as shown on the books” of PECO’s realty must be written down because of the Com*1232petition Act. PECO, 591 Pa. at 411, 919 A.2d at 191 (quoting Section 3 of the Act commonly known as the Public Utility Realty Tax Act1 (PURTA), 72 P.S. § 8101-A(4)). The Supreme Court, in reversing this Court, held that the plain language of PURTA needed to be applied and that the decline in value of the realty was a legally significant consequence of the General Assembly’s enactment of the Competition Act, which could not be ignored. The Supreme Court concluded that “[i]t is not within this Court’s power to change the plain language of the statute.” PECO, 591 Pa. at 413, 919 A.2d at 193. Applying this principle to the present case, I similarly conclude that the clear language of the Competition Act and Section 54.1 cannot be ignored, and that the legal consequences of these provisions, while significant, were intended. It is not within this Court’s power to change that language.
Additionally, to the extent there is any ambiguity with the statutory language, I would find in favor of Spectrum based on the principle of interpretation that “[a] taxing statute must be construed most strongly and strictly against the government, and if there is a reasonable doubt as to its construction or application to a particular case, the doubt must be resolved in favor of the taxpayer.” McNeil-PPC, Inc. v. Commonwealth, 575 Pa. 50, 63, 834 A.2d 515, 522 (2003) (alteration in original) (quoting Skepton v. Borough of Wilson, 562 Pa. 344, 350, 755 A.2d 1267, 1270 (2000)).
For these reasons, I must respectfully dissent.
Judge SMITH-RIBNER joins in this dissenting opinion.

. Act of March 4, 1971, P.L. 6, as amended, 72 P.S. §§ 8106.1-A through 8112-A.