Court Opinion

ID: 9704404
Source: CourtListenerOpinion
Date Created: 2023-08-26 00:34:30.135332+00
Date Added: 2024-06-11T18:22:02.112347
License: Public Domain

DISSENTING OPINION BY
Judge SMITH-RIBNER.
I respectfully dissent from the majority’s decision to affirm the order of the Public Utility Commission (Commission) because its application of the line-extension regulations at 52 Pa.Code §§ 65.21-65.23 eliminates “public need” from any consideration as an independent factor in determining when customer advances may be required for a water service line extension project. The Commission’s application of those regulations is at odds with Section 1501 of the Public Utility Code, 66 Pa.C.S. § 1501, which provides in relevant part:
Every public utility shall furnish and maintain adequate, efficient, safe, and reasonable service and facilities, and shall make all such repairs, changes, alterations, substitutions, extensions, and improvements in or to such service and facilities as shall be necessary or proper for the accommodation, convenience, and safety of its patrons, employees, and the public.... Such service and facilities shall be in conformity with the regulations and orders of the commission.
When interpreting Section 1501 and its predecessor statute,1 the appellate courts *1111have generally concluded that the costs associated with maintaining and expanding the physical facilities necessary to provide utility service must be assumed initially by the public utility.2 In circumstances in which there is no public need for improvements or extensions in service, e.g., when the proposed project involves special services or benefits only a particular customer or developer, the Commission and courts have approved the assessment of customer contributions.3 Similarly, it has been held that a public utility may not be required to bear prohibitive costs in extending service or to sustain such expenses as would materially handicap the utility in securing a fair return on its overall operations.4
In the “break-even” formula contained in 52 Pa.Code § 65.21, the Commission sets forth a rule that determines a public utility’s financial obligation for service extension in terms of costs and revenue, without separate regard for the degree of public need for the service extension. I recognize that the Commission has authority to formulate such rules and that in doing so it may within limits amend prior interpretations of statutory mandates. Elite Industries, Inc. v. Pennsylvania Public Utility Comm’n, 574 Pa. 476, 832 A.2d 428 (2003); Rohrbaugh v. Pennsylvania Public Utility Comm’n, 556 Pa. 199, 727 A.2d 1080 (1999). However, the Commission’s application of its regulations may not conflict with fundamental statutory principles, and when the Commission exceeds its statutory authority an appellate court may find an abuse of discretion. Section 501 of the Public Utility Code, 66 Pa.C.S. § 501; Rohrbaugh; Pennsylvania Electric Co. v. Pennsylvania Public Utility Comm’n, 166 Pa.Cmwlth. 413, 648 A.2d 63 (1994).
Here, the Commission’s application of its regulations categorically excludes public need as an independent factor in determining whether customer contributions may be assessed for the benefit of the Pennsylvania-American Water Company (PAWC), and in doing so the Commission contravenes the mandate of Section 1501 of the Public Utility Code that a public utility “shall make all such repairs, changes, alterations, substitutions, extensions, and improvements in or to such service and facilities as shall be necessary or proper for the accommodation, convenience, and safety of its patrons, employees, and the public.” By. entirely excluding public need from its consideration, the Commission has applied its regulations in a manner that represents an abuse .of discretion and reversible error.
This conclusion does not advance the notion that a public utility must extend service in all cases no matter what the cost or foreclose the notions that the costs of an extension project may in some cases outweigh any professed public need for increased service or that the Commission may employ its break-even analysis in esti*1112mating the investment requirements for a project. However, pursuant to Section 1501 of the Public Utility Code, the Commission must weigh public need as a factor in determining whether service should be extended without customer contributions, and that process must acknowledge in some circumstances that public need will in fact outweigh the requirements of the Commission’s regulations. In making such an assessment, the court noted in Ridley Tp. v. Pennsylvania Public Utility Comm’n, 172 Pa.Super. 472, 94 A.2d 168, 171 (1953):
Ordinarily, it is not the business of the citizen or consumer to construct any part of a utility’s system. There are, doubtless, instances where, under special circumstances, warranted by the evidence, the Commission may, in the exercise of its administrative discretion, withhold exercise of its power unless patrons offer to participate in the cost of construction. But no inflexible rule can be laid down; participation in construction costs cannot be exacted indiscriminately; and it cannot be required upon a mere showing that an extension will not immediately produce an adequate profit. (Citation omitted.)
On the record before the Court, there can be little doubt that those portions of Mt. Pleasant Township requesting service are in need of a public water system. The record contains abundant evidence of contaminated wells and of inadequate supplies of water for drinking and fire protection. The degree of public need in this case is not one of mere accommodation or convenience but one affecting public health and safety, and the Commission erred in concluding that absent customer contributions PAWC need not extend water service to the affected area. Instead, the Commission should have granted a waiver of its regulations and then determined the degree of service extension required. The Commission’s order should be vacated and the case remanded for determination of those requirements.
President Judge COLINS joins in this dissent.

. Section 401 of the Act of May 28, 1937, P.L. 1053, as amended, fonnerly 66 P.S. § 1171, repealed by Section 2 of the Act of July 1, 1978, P.L. 598.

.See Kossman v. Pennsylvania Public Utility Comm’n, 694 A.2d 1147 (Pa.Cmwlth. 1997); Huntingdon, Inc. v. Pennsylvania Public Utility Comm’n, 76 Pa.Cmwlth. 387, 464 A.2d 601 (1983); Fairview Water Co. v. Pennsylvania Public Utility Comm’n, 55 Pa.Cmwlth. 96, 422 A.2d 1209 (1980); McCormick v. Pennsylvania Public Utility Comm'n, 48 Pa.Cmwlth. 384, 409 A.2d 962 (1980); Colonial Products Co. v. Pennsylvania Public Utility Comm’n, 188 Pa.Super. 163, 146 A.2d 657 (1958); Ridley Tp. v. Pennsylvania Public Utility Comm’n, 172 Pa.Super. 472, 94 A.2d 168 (1953).

. See Kossman; Lynch v. Pennsylvania Public Utility Comm’n, 140 Pa.Cmwlth. 599, 594 A.2d 816 (1991); Colonial Products Co.; United Natural Gas Co. v. Pennsylvania Public Utility Comm’n, 153 Pa.Super. 252, 33 A.2d 752 (1943).

. See Colonial Products Co.; Ridley Tp.; Sherman v. Public Service Comm’n, 90 Pa.Super. 523, 1927 WL 4624 (1927).