Court Opinion

ID: 2797064
Source: CourtListenerOpinion
Date Created: 2015-04-28 19:06:46.792956+00
Date Added: 2024-06-11T12:45:24.593029
License: Public Domain

J-A04023-15

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

PENNSYLVANIA ELECTRIC COMPANY,                 IN THE SUPERIOR COURT OF
                                                     PENNSYLVANIA
                         Appellant

                    v.

BERWIND CORPORATION,

                         Appellee                   No. 972 WDA 2014

                 Appeal from the Order Entered May 20, 2014
              In the Court of Common Pleas of Somerset County
                    Civil Division at No(s): 1383 Civil 2009

BEFORE: BOWES, OLSON AND STRASSBURGER, JJ.*

MEMORANDUM BY OLSON, J.:                            FILED APRIL 28, 2015

     Appellant, Pennsylvania Electric Company, appeals from the order

entered on May 20, 2014, granting a motion for summary judgment filed by

Berwind Corporation (Berwind). Upon review, we affirm.

     The trial court summarized the facts of this case as follows:

        [Appellant] is a Pennsylvania public utility providing
        electrical service within the Commonwealth of Pennsylvania
        and has it principal office at 1001 Broad Street, Johnstown,
        Pennsylvania 15907.          [Berwind] is a Pennsylvania
        Corporation with its principal place of business at 3000
        Centre Square West, 1500 Market Street, Philadelphia,
        Pennsylvania 19102. [Berwind] is the owner of certain
        mineral-rich land located in Shade Township, Somerset
        County, Pennsylvania. At all pertinent times, [Berwind] has
        intended to mine the coal located on this property. In order
        to avoid having to go through with the process to condemn
        a right-of-way on [Berwind’s] property, [Appellant] and
        [Berwind] entered into a right-of-way agreement (the
        “Agreement”), which granted [Appellant] a right-of-way
        over [Berwind’s] land on which to erect and maintain a

*Retired Senior Judge assigned to the Superior Court.
J-A04023-15

       power line and related facilities. Specifically, the Agreement
       granted [Appellant] a right-of-way described as:

          a right-of-way for a power line within a width of not
          exceeding one hundred twenty (120) feet, subject to
          the exceptions and reservations hereinafter set forth,
          together with the right and privilege to construct,
          maintain, repair and operate an electric power line,
          with the necessary poles, wires, guy stubs and
          anchors for the transmission of electrical energy over
          and through the hereinafter described lands situated
          in the Township of Shade, County of Somerset and
          State of Pennsylvania.

       The Agreement specified that “the rights and privileges
       hereby granted shall continue so long as [Appellant] shall
       operate and maintain in good and safe repair the said power
       line on the herein described premises… .” Moreover, the
       Agreement specified, in pertinent part:

          [Berwind], for itself, its successors, lessees, assigns
          and grantees, hereby expressly excepts and reserves
          the rights and privilege to mine and remove, by any
          method or methods chosen by it, all of the coal and
          minerals, including the pillars, owned by it or
          hereafter acquired by it, underlying or adjoining the
          fee and/or mineral lands of [Berwind] over which the
          said power line is to be constructed and maintained;
          and also the exclusive right to use for farming
          purposes and to cross at any point the said power
          line with power lines, water lines, streets, alleys,
          tramroads, railways, above or below ground; all of
          these rights to be exercised by [Berwind], its
          successors, lessees and assigns, without let,
          hindrance or molestation, and without liability for
          damages.

       Furthermore, the Agreement stated:

          [Appellant] hereby remises and releases [Berwind],
          its successors, lessees and assigns, from any and all
          damages whatsoever which may result to the power
          line and appurtenances of [Appellant] on the
          right-of-way herein granted by reason of the mining

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            and removing of all the coal and minerals or any part
            thereof, or by reason of the exercise of any of the
            rights and privileges hereby excepted and reserved.

        The Agreement was made and entered into by the parties
        on January 10, 1977. Thereafter, [Appellant] promptly
        installed a power line, along with poles and other equipment
        necessary for the transmission of electrical energy within
        the right-of-way, and [Appellant] has since operated and
        maintained the power line in good and safe repair.

        No dispute arose between the parties until October 17,
        2007, when [Berwind’s] lessee notified [Appellant] that it
        planned to mine coal located within the right-of-way. On
        May 14, 2008, [Appellant’s] representative responded,
        writing that [Appellant] agreed to permit mining only if
        [Berwind] agreed to certain written restrictions that would
        be placed on the coal mining activities with the intention of
        protecting the power line and electrical facilities. On June
        20, 2008, [Berwind’s] representative rejected the
        restrictions and advised [Appellant] that the stated
        conditions were unacceptable as they contradicted the
        Agreement.       Sometime thereafter, [Berwind] offered
        [Appellant] the option of relocating its power line and
        facilities to another area on [Berwind’s] property at
        [Appellant’s] cost, or paying [Berwind] for the unmined coal
        within the right-of-way.        [Berwind] further advised
        [Appellant] that [it] would proceed to mine the coal even if
        the power line was damaged in the process. In May 2009,
        [Appellant] opted to move the power line to a different
        location on [Berwind’s] property, but reserved the right to
        seek damages from [Berwind].

        After obtaining approval from the Pennsylvania Public Utility
        Commission (hereinafter, the “PUC”), [Appellant] relocated
        its power line and electrical facilities, calculated in
        accordance with [Appellant’s] Tariff No. 79 (hereinafter
        “Tariff”), totaled $420,640.18.

Trial Court Opinion, 5/20/2014, at 3-5 (record citations omitted).

      The case progressed procedurally as follows:

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             [Appellant] instituted this action on December 15, 2009
         by filing a complaint for declaratory judgment. On January
         15, 2010, in response to the complaint, [Berwind] filed an
         answer and new matter to [Appellant’s] complaint for
         declaratory judgment and counterclaim for declaratory
         judgment.      On March 24, 2010, [Appellant] filed an
         amended complaint for declaratory judgment, seeking a
         declaration from [the trial court] that [Berwind was]
         obligated to reimburse [Appellant] for the cost of relocating
         its power line and electrical facilities. On April 13, 2010, in
         response to the amended complaint, [Berwind] filed its
         answer to [the] amended complaint, and counterclaim for
         declaratory judgment.        In its counterclaim, [Berwind]
         request[ed] that [the trial court] declare that [Berwind had]
         no liability to [Appellant] for costs associated with the
         relocation of [Appellant’s] power line and related facilities.

             On December 3, 2013, [Appellant] filed a motion for
         summary judgment, a brief in support [], and [a] statement
         of material facts[]. […] On January 17, 2014, [Berwind]
         filed a cross-motion for summary judgment, a brief in
         opposition to [Appellant’s] motion for summary judgment
         and in support of its cross-motion for summary judgment,
         and a response to [Appellant’s] statement of material
         facts[]. [The parties filed responses and replies.]

            On April 16, 2014, [the trial court] heard argument by
         counsel on the parties’ cross-motions for summary
         judgment. [On May 20, 2014, the trial court entered an
         order, and filed an accompanying opinion,] deny[ing]
         [Appellant’s] motion for summary judgment and grant[ing]
         [Berwind’s] cross-motion for summary judgment.

Id. at 1-3 (unnecessary capitalization and parentheticals omitted).        This

timely appeal resulted.1

____________________________________________

1
  Appellant filed a notice of appeal on June 16, 2014. On June 25, 2014, the
trial court entered an order pursuant to Pa.R.A.P. 1925(b) directing
Appellant to file a concise statement of errors complained of on appeal.
Appellant complied on July 15, 2014. Relying upon its prior opinion issued
(Footnote Continued Next Page)

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      On appeal, Appellant presents the following issues for our review:

         1. Did the lower court err in failing to find that the
            right-of-way agreement granted the right-of-way in
            [Appellant] in perpetuity so long as the electrical facilities
            were maintained and did not contain any provision
            requiring [Appellant] to relocate them or buy any coal?

         2. Did the lower court err in failing to find that Berwind, as
            the party benefitted, must pay for the relocation of
            electrical facilities if Berwind wants to strip mine the coal
            under the area needed to provide surface support for the
            electrical facilities?

         3. Did the lower court err in construing the reservation of
            right to mine and remove coal and the waiver of
            damages to allow Berwind to recklessly or intentionally
            harm the electrical facilities to strip mine coal in the area
            needed to provide surface support for the electrical
            facilities requiring [Appellant] to pay for the relocation of
            the electrical facilities or buy the coal in order to avoid
            having them intentionally destroyed by Berwind?

         4. Did the lower court err in disregarding [Appellant’s] filed
            and approved PUC Tariff in determining whether Berwind
            was responsible for payment of the relocation costs and
            in finding that Berwind was not an “applicant” when it
            demanded that [Appellant] relocate the electrical
            facilities for its benefit?

         5. If this matter is reversed, should the matter be referred
            to the PUC to determine the proper amount to be
            awarded to [Appellant] for the relocation of the electrical
            facilities?

Appellant’s Brief at 3 (some capitalization omitted).

                       _______________________
(Footnote Continued)

on May 20, 2014, the trial court entered an order, on July 23, 2014,
declining further supplementation.

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       Appellant’s first three issues are inter-related and, thus, we will

examine them together.          Appellant contends that the trial court erred by

granting summary judgment to Berwind based upon its interpretation of the

right-of-way contract at issue. More specifically, Appellant claims that “[t]he

agreement does not contain any provision whatsoever that requires

[Appellant] to relocate its facilities for any reason.” Id. at 17.     Appellant

argues that by demanding relocation or threatening destruction of its power

lines, Berwind took actions that completely denied Appellant use of the

easement.2 Id. at 18-23. Relying principally on the Pennsylvania Supreme

Court’s decision in Minard Run Oil Co. v. Pennzoil Co., 214 A.2d 234 (Pa.

1965), Appellant avers that because Berwind sought to change the status

quo, Berwind bore the relocation costs.          Id. at 24-27.   Appellant also

contends that the trial court erred by taking into account the “nominal”

consideration it paid for the easement ($12,000.00) or the potential of

Berwind instituting condemnation proceedings, in rendering its opinion. Id.

at 28-29. Finally, Appellant argues that the reservation and release

____________________________________________

2
  For this proposition, Appellant cites this Court’s decisions in Amerikohl
Mining Co., Inc. v. Peoples National Gas Co., 860 A.2d 547 (Pa. Super
2004), as well as the Pennsylvania Supreme Court’s decision in Merrill v.
Manufacturers Light and Heat Co., 185 A.2d 573 (Pa. 1962). Appellant
maintains “[t]he import of the cases involving improved lands indicate that
the courts in this Commonwealth have been reluctant to require the
relocation of the improvements at the easement holder’s expense or permit
the destruction of the improvements on the surface.” Appellant’s Brief at
23.

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provisions of the agreement “do not support the claim that [Appellant]

consented in advance to Berwind engaging in intentional or reckless conduct

that would damage or destroy the very facilities to be placed on the granted

right-of-way under the agreement.”      Id. at 31. Appellant argues that the

term damages “contemplates unintentional injury to the power lines, not the

intentional destruction of them.” Id. at 40.

     Our standard of review with respect to a trial court's decision to grant

or deny a motion for summary judgment is as follows:

         A reviewing court may disturb the order of the trial court
         only where it is established that the court committed an
         error of law or abused its discretion. As with all questions of
         law, our review is plenary.

         In evaluating the trial court's decision to enter summary
         judgment, we focus on the legal standard articulated in the
         summary judgment rule. Pa.R.C.P. 1035.2. The rule states
         that where there is no genuine issue of material fact and
         the moving party is entitled to relief as a matter of law,
         summary judgment may be entered. Where the non-moving
         party bears the burden of proof on an issue, he may not
         merely rely on his pleadings or answers in order to survive
         summary judgment. Failure of a nonmoving party to adduce
         sufficient evidence on an issue essential to his case and on
         which it bears the burden of proof establishes the
         entitlement of the moving party to judgment as a matter of
         law. Lastly, we will view the record in the light most
         favorable to the non-moving party, and all doubts as to the
         existence of a genuine issue of material fact must be
         resolved against the moving party.

Socko v. Mid-Atlantic System of CPA, Inc., 99 A.3d 928, 930 (Pa. Super.

2014).

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      “It is well established that the same rules of construction that apply to

contracts   are   applicable   in   the    construction   of   easement   grants.”

Zettlemoyer v. Transcon. Gas Pipeline Corp., 657 A.2d 920, 924 (Pa.

1995). Regarding contract interpretation, we have determined:

        The interpretation of any contract is a question of law and
        this Court's scope of review is plenary. Moreover, we need
        not defer to the conclusions of the trial court and are free to
        draw our own inferences. In interpreting a contract, the
        ultimate goal is to ascertain and give effect to the intent of
        the parties as reasonably manifested by the language of
        their written agreement. When construing agreements
        involving clear and unambiguous terms, this Court need
        only examine the writing itself to give effect to the parties'
        understanding. This Court must construe the contract only
        as written and may not modify the plain meaning under the
        guise of interpretation.

        We have explained:

            Contracts are enforceable when the parties reach a
            mutual agreement, exchange consideration, and
            have set forth the terms of their bargain with
            sufficient clarity. An agreement is sufficiently definite
            if it indicates that the parties intended to make a
            contract and if there is an appropriate basis upon
            which a court can fashion a remedy. Moreover,
            when the language of a contract is clear and
            unequivocal, courts interpret its meaning by its
            content alone, within the four corners of the
            document.

Stephan v. Waldron Elec. Heating & Cooling LLC, 100 A.3d 660, 665

(Pa. Super. 2014) (internal citations omitted).

      At issue here, the right-of-way agreement provides, in pertinent part:

              This Agreement, made in duplicate, and entered into
        this 10th day of January, A.D. 1977, by and between

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       BERWIND CORPORATION, a corporation organized and
       existing under and by virtue of the laws of the
       Commonwealth of Pennsylvania, party of the first part, and
       PENNSYLVANIA ELECTRIC COMPANY, likewise a corporation
       of Pennsylvania, party of the second part.

       WITNESSETH:

           That for and in consideration of the convenants and
       agreements hereinafter contained and on the part of
       [Appellant] to be kept, performed and observed, as well as
       for and in consideration of the sum of One Dollar ($1.00),
       and for other good and valuable considerations, receipt of
       which is hereby acknowledged, [Berwind] hereby gives and
       grants unto the party of the second part a right-of-way for a
       power line within a width of not exceeding one hundred
       twenty (120) feet, subject to the exceptions and
       reservations hereinafter set forth, together with the right
       and privilege to construct, maintain, repair and operate an
       electric power line, with the necessary poles, wires, guy
       stubs and anchors for the transmission of electrical energy
       over and through the hereinafter described lands situated in
       the Township of Shade, County of Somerset and State of
       Pennsylvania. It is distinctly understood and agreed that
       the fee simple in the land hereinafter described is not
       hereby granted, but only the rights and privileges for the
       purpose aforesaid, subject to the agreements and
       conditions herein contained.

                          *        *           *

       [Berwind], for itself, its successors, lessees, assigns and
       grantees, hereby expressly excepts and reserves the right
       and privilege to mine and remove, by any method or
       methods chosen by it, all of the coal and minerals, including
       the pillars, owned by it or hereafter acquired by it,
       underlying or adjoining the fee and/or minerals lands of
       [Berwind] over which the said power line is to be
       constructed and maintained; and also the exclusive right to
       use for farming purposes and to cross at any point the said
       power line with power lines, water lines, streets, alleys,
       tramroads, railways, above or below ground; all of these
       rights to be exercised by [Berwind], its successors, lessees

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        and assigns, without let, hindrance or molestation, and
        without liability for damages.

                           *        *            *

        SECOND [PARAGRAPH]: [Appellant] hereby remises and
        releases [Berwind], its successors, lessees, and assigns,
        from any and all damages whatsoever which may result to
        the power line and appurtenances of [Appellant] on the
        right-of-way herein granted by reason of the mining and
        removing of all the coal and minerals or any part thereof, or
        by reason of the exercise of any of the rights and privileges
        hereby excepted and reserved.

Right-of-Way Agreement, 1/10/1977, at 1-2.

     Here, the plain language of the agreement provides that Berwind, as

land owner, expressly reserved “the right and privilege to mine and remove,

by any method or methods chosen by it, all of the coal and minerals …

underlying … lands of [Berwind] over which the said power line is to be

constructed and maintained.”    Id. at 1 (emphasis added).       There is no

ambiguity regarding whether Berwind was entitled to mine all of the coal

under the right-of-way, by any method.      Moreover, Berwind was permitted

to exercise “all of these rights … without let, hindrance or molestation, and

without liability for damages.”     Id. (emphasis added).     Appellant also

agreed to “remise[] and release[] [Berwind] … from any and all damages

whatsoever which may result to the power line and appurtenances of

[Appellant] on the right-of-way … by reason of the mining and removing of

all the coal and minerals[.]”   Id. at 2.     When the provisions are read

together, it is clear that Berwind provided land to Appellant for a right-of-

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way, conditioned upon the right to mine all of the coal underneath the

easement at any time, by any method. Had Berwind mined the coal before

Appellant relocated its power lines, Berwind would have been held harmless

for any damage to the original structures.

      We reject Appellant’s argument that Berwind sought to engage in

intentional or reckless conduct that would damage or destroy the power

lines. Berwind sought to exercise its reserved right to mine all of the land

under the right-of-way.        While complete destruction was a distinct

possibility, there is nothing of record to suggest that Berwind intended to

intentionally or outright destroy the power lines.          Rather, at all times,

Berwind sought to exercise its express reservation to mine the land, with

ancillary damage to Appellant almost certain to occur.

      We reject also Appellant’s suggestion that relocation changed the

status   quo   between   the    parties,    because   the    agreement    always

contemplated mining and expressly granted Berwind the option to do so, at

its sole discretion.   There is no language to suggest that Berwind was

required to negotiate further with Appellant before mining operations under

the right-of-way began. Instead, Berwind reserved the right to remove any

and all minerals, by any method, underlying the land where the power line

was constructed and maintained.            The plain language did not place

limitations on the amount of coal mined or the method of mining.          Again,

had Berwind exercised its rights and begun mining operations under the

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agreement, without first offering Appellant the opportunity to relocate,

Berwind could have done so “without let, hindrance or molestation, and

without liability for damages.” Id. Hence, when Berwind notified Appellant

of its intentions to mine coal under the right-of-way, under the express

reservation, it then became Appellant’s decision to either bear the brunt of

potential damage or move its power lines at its own expense, because

Appellant also agreed that Berwind would be held harmless for any damages

resulting from mining operations.

     While it is true that the right-of-way agreement is silent regarding

relocation, to adopt Appellant’s reasoning would fundamentally rewrite the

agreement by holding Berwind liable for damages for exercising its rights as

clearly delineated under the agreement. The argument that relocation

expenses to avoid damages is somehow different than suffering actual

damages ignores the reality of the situation. Had Berwind proceeded with

mining operations and destroyed the power lines in the process, Appellant

would have suffered damages and Berwind would not have been liable.

Thus, Appellant would have been responsible for those damages, as well as

damages for potential hazards or interruptions in service caused by the

damage. If we were to adopt Appellant’s logic, liability would be assigned to

different parties under the same agreement, depending on how Berwind

chose to proceed in exercising its clearly established rights. Under such a

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scenario, Berwind would have been better off mining without Appellant’s

input and would not have been liable for damages.

     Likewise, we reject Appellant’s reliance on Merrill, Amerikohl, and

Minard Run as those cases are unmistakably distinguishable. In both

Merrill and Amerikohl, the courts conducted plain language interpretations

of easement agreements in relation to mining operations. However, in those

matters the contracts contained language, not implemented here, related

specifically to deep mining operations and whether there were limitations to

the manner in which coal could be mined.         More specifically, in those

matters, the right-of-way agreements contained releases from landowner

liability for the removal of coal in deep mining operations requiring surface

support, but did not relieve the landowners for damages due to strip mining.

See Merrill, 185 A.2d at 576-577 (release contained in an instrument

expressly granting pipeline right-of-way easement, relieving grantor of

liability for damage to pipeline from the removal of “surface support”

thereunder in the mining of coal, dealt with the removal of the coal and

rocky or sand strata which lay between the coal measures and did not

permit surface destruction or strip mining.); see also Amerikohl, 860 A.2d

at (easement agreement release merely granted landowner the right to mine

without being required to provide or leave support to the overlying strata,

but did not specifically mention surface mining or deep mining and only

contemplated deep mining.)

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      In Minard Run, the landowner sought to compel the pipeline

easement holder to move an established pipeline so that the landowner

could improve a roadway over it; in that case, however, there was no

contractual language providing for such future conditions.        See Minard

Run, 214 A.2d at 236 (landowner’s right to the full use of the surface of the

land was necessarily circumscribed by the granted easement and pipeline

owners had the right to insist that the easement remain as granted.)

      Here, however, as previously discussed, the express language of the

right-of-way agreement has no such restrictions.      Instead, the agreement

provided Berwind with the right to remove any and all minerals, by any

method. As the trial court noted, this case more closely resembles the facts

and issues examined in Mount Carmel R. Co. v. M.A. Hanna Co., 89 A.2d

508 (Pa. 1952).     Compare Mount Carmel, 89 A.2d at 512 (landowner

retained all coal under railroad’s right of way “with the full and free right of

digging for mining and taking away [coal], at any time or times, or in any

manner or by any method of mining without let or hinderance of the said

[railroad] and without any compensation therefor or liability of any kind or

nature whatever[;]” strip mining is an excepted manner or method of coal

mining.)(emphasis in original).

      Finally, because we find no ambiguity in the clear contract language,

there was no reason for the trial court to look outside the four corners of the

contract to effectuate the parties’ intent, i.e., consideration Appellant paid

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for the easement ($12,000.00) or the potential of Berwind instituting

condemnation proceedings.       Moreover, it should be noted that the

agreement specifies “[t]he true, full and complete value of the right-of-way

herein granted, including liens and other encumbrances, if any[,] is

$12,000.00.” Right-of-Way Agreement, 1/10/1977, at 3. In Minard Run,

our Supreme Court looked at the amount of consideration paid for the

easement and determined, “[the landowner] has been and is in the oil, gas

and timber business.    It sold the pipeline easement for the comparatively

insignificant sum of $788[.00], which in and of itself, would suggest that it

never intended to relinquish the right to use the rest of the land in a manner

profitable to its own business.” Minard Run, 214 A.2d at 235. Thus, we

question whether it was error for the trial court to consider the amount of

consideration paid.     However, because the contract language was not

ambiguous, additional reliance on parol evidence is harmless in light of our

prior determinations.

      For all of the foregoing reasons, Appellant’s first three claims are

without merit.   Appellant entered into a conditional easement agreement

that permitted Berwind to mine all of the coal under the right-of-way by any

method.   The easement agreement held Berwind not liable for damages

when exercising those rights. Appellant was given the option of relocating to

avoid damage to its power lines, which it chose to do. That cost is borne by

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Appellant.   Thus, the trial court properly entered summary judgment in

Berwind’s favor.

      Appellant’s last two remaining issues are inter-related so we will

examine them together. Appellant argues that, as a public utility, it filed

Tariff No. 79, with the Pennsylvania Public Utility Commission that requires

Berwind to pay relocation costs.      Appellant’s Brief at 43-47.     Appellant

requests that, if this Court agrees, we refer the issue to the Public Utilities

Commission, under its primary jurisdiction, for a determination of costs. Id.

at 48-50.

      The Commonwealth Court has stated:

        A tariff is a set of operating rules imposed by the State that
        a public utility must follow if it wishes to provide services to
        customers. It is a public document which sets forth the
        schedule of rates and services and rules, regulations and
        practices regarding those services. It is well settled that
        public utility tariffs must be applied consistently with their
        language. 66 Pa.C.S.A. § 1303. Public utility tariffs have the
        force and effect of law, and are binding on the customer as
        well as the utility.

PPL Elec. Utilities Corp. v. Pennsylvania Pub. Util. Comm'n, 912 A.2d

386, 402 (Pa. Cmwlth. 2006).

      Public utility tariffs are used in governing the services public utilities

provide to their customers. In this instance, relocation was not based upon

providing electrical service to a customer.    Rather, it was based upon the

clearly defined terms of the written agreement that reserved Berwind’s right

to mine under an easement granted to Appellant. Moreover, upon review of

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the record, Tariff No. 79 did not become effective until January 11, 2007,

almost 30 years after the parties entered into the right-of-way agreement.

Simply stated, Berwind cannot be bound unilaterally by the terms of Tariff

No. 79.    Thus, Appellant’s fourth assignment of error lacks merit.   Having

determined that Appellant was responsible for relocation costs, an additional

determination of costs is unnecessary.       Hence, Appellant’s fifth issue is

moot.

        Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 4/28/2015

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