Court Opinion

ID: 4952988
Source: CourtListenerOpinion
Date Created: 2021-09-24 13:20:36.116116+00
Date Added: 2024-06-11T08:15:28.142332
License: Public Domain

PELLEGRINI, Judge,
dissenting.
Because serving a single customer is not public utility service as defined by the Public Utility Code, I respectfully dissent from the majority’s opinion that Bessie 8 is a public utility and must apply for a certificate of public convenience and necessity.
Bessie 8 is a joint venture between Energy Pipeline Company (Pipeline), Energy Production Company (Production), Union Drilling, Inc., and New Jersey Natural Resources Company (collectively, joint venturers). The joint venture was formed in order to raise capital for the construction of a pipeline project to supply natural gas pursuant to an agreement entered into between the joint venturers and Bethlehem Steel Corporation (Bethlehem). The pipeline project, for which no certificate of convenience was applied for, was completed by February of 1985. Pursuant to contract, the natural gas production and transportation facilities of Bessie 8 were exclusively dedicated to the use of Bethlehem’s Johnstown works. Bessie 8 has no interstate pipeline connections nor sources of gas or any connection other than Pennsylvania native field production.
Prior to the joint venturer’s contract with Bethlehem, Production had engaged in wide solicitation for a pipeline customer. After the pipeline was completed and the contractual agreement entered into with Bethlehem, the President of Production allegedly, without the knowledge or permission of the other joint venturers, solicited Anchor Glass in an effort to obtain them as a pipeline customer. Anchor Glass was never obtained as a customer, nor was the pipeline ever used by a customer other than Bethlehem. Moreover, the President of Production was reprimanded and told not to engage in further solicitation.
In approximately November of 1985, Peoples Natural Gas (Peoples) filed a complaint against Bessie 8 alleging that its provision of natural gas services was in violation of Section 1101 of the Public Utility Code (Code), 66 Pa.C.S. § 1101. Admitting that they provide uncertified service to Bethlehem’s Johnstown plant, Bessie 8 contended that it did not need to obtain a certificate of public *1209convenience because it was not a public utility-
The ALJ agreed that the Bessie 8 pipeline did not constitute a public utility as defined by Section 102 of the Code. On appeal, the Public Utility Commission (PUC) held that the Bessie 8 pipeline was a public utility because, based on the actions of the joint venturers in soliciting customers both before and after the contract was entered into with Bethlehem, Bessie 8 held itself out as a utility available to the public. This appeal followed.
Acknowledging that there is no bright line rule for determining whether a utility constitutes a public or private service, the majority accepts the PUC’s rationale and likewise reaches the conclusion that the Bessie 8 pipeline constitutes a public utility. Like the PUC, the majority accepts as evidence of Bessie 8’s public nature the solicitation efforts of Production in obtaining a customer for the pipeline. It does not accept its use today as controlling. Just because the President of Production, one of four joint ventur-ers, acting on his own behalf and against orders, unsuccessfully solicited the business of a single additional customer, without more, is not enough to conclude that Bessie 8 operates as a public utility.
As an additional reason, the majority holds that the character of the service and not the number of customers served determines whether a utility is a public one under the Code. Just because Bethlehem is the sole user of the pipeline, the majority holds, is not enough to bring Bessie 8 outside the scope of a public utility. I disagree with that holding because it is at odds with the Code and the common understanding of the term. Section 102 of the Code, 66 Pa.C.S. § 102(2)(iii), defines the term “public utility” to specifically exclude “a producer of natural gas not engaged in distributing such gas directly to the public for compensation.” In Wattman v. Pa. Public Utility Commission, 142 Pa.Cmwlth. 44, 596 A.2d 1221 (1991), affirmed without opinion, 533 Pa. 304, 621 A.2d 994 (1993), we held that the nature of the actual service is the pivotal element that determines the provider’s status as public or private, and that where the general public has the right to subscribe to the service, it is public, and when it doesn’t, it is private. The exclusive contractual service by which Bessie 8 provides natural gas solely to Bethlehem is not the distribution of gas to the public.
Because Bessie 8 does not serve the public, and, as such is not a public utility, I would reverse the PUC’s decision.