[39 Pa.B. 659]
[Saturday, January 31, 2009]
Public Meeting held
December 18, 2008
Commissioners Present: James H. Cawley, Chairperson; Tyrone J. Christy, Vice Chairperson; Robert F. Powelson; Kim Pizzingrilli; Wayne E. Gardner
Petition of Laceyville Borough for a Declaratory Order that its Provision of Water Service to an Isolated Group of Customers does not Constitute the Provision of Public Utility Service Under 66 Pa.C.S. § 102; Doc. No. P-2008-2064117
By the Commission:
On September 17, 2008, Laceyville Borough (the Borough or Laceyville) filed the above-captioned petition for declaratory order. In accordance with 52 Pa. Code § 5.42, the Borough served a copy of its petition on the Office of Consumer Advocate, the Office of Trial Staff, the Office of Small Business Advocate, and on each of the 17 affected customers located outside of Laceyville's corporate boundaries. No answers were filed to Laceyville's petition.
Section 331(f) of the Public Utility Code, 66 Pa.C.S. § 331(f), provides that the Commission ''may issue a declaratory order to terminate a controversy or remove uncertainty.'' By its petition, the Borough seeks a determination that its provision of water service to the 17 customers that are physically proximate to the Borough, but not within the corporate boundaries of the Borough, is not subject to Commission jurisdiction. The Borough asserts that the service it provides to these 17 customers is not service ''to or for the public'' within the meaning of section 102 of the Public Utility Code, 66 Pa.C.S. § 102.
In its petition, the Borough notes that its water supply is located in an adjacent municipality, Braintrim Township. With the exception of the water main leading from the water supply to the Borough, all of the Borough's water mains are located within the municipal boundaries of the Borough. The Borough serves 17 residential water service connections outside the Borough's municipal boundary. These extraterritorial customers own property that is in close proximity to the Borough's water mains and are connected thereto by one and two-inch lateral service lines.
By letter dated November 18, 2008, the Borough states that while the 17 customers outside of the Borough's corporate limits receive service at the same terms as customers that reside inside Borough boundaries, the rates to customers outside of the Borough's corporate limits are substantially lower than the rates charged to Borough residents.1
Furthermore, the Borough asserts in its Petition that 15 of the 17 extraterritorial connections to the Borough's water system were made in the mid 1960s, although the exact date is unknown. The two additional extraterritorial connections along the same water main were added in 1995 in conjunction with a Laceyville Borough Municipal Authority sewer project that brought public sewer to these two residents. On this specific issue, it is clarified in the Petition that the Borough did not solicit the extraterritorial customers, rather, because of sulfur in the water table, the extraterritorial customers requested to connect to the Borough's water supply which has been treated to remove sulfur. We agree that under these circumstances, it is appropriate to issue a Declaratory Order in response to the subject petition.
In support of its petition, the Borough states that it is currently subject to the Commission's jurisdiction and complies with the Commission's reporting and tariff requirements.2 The Borough states that these requirements are unreasonably burdensome given that the Borough only serves 17 extraterritorial customers. The Borough seeks to avoid these requirements, but at the same time retain service to the existing extraterritorial customers. The Borough notes that it has existing water supply issues that resulted in the declaration of an emergency in January 2008. To this end, the Borough is currently in the process of installing a new well at considerable expense. In addition to the 17 extraterritorial customers the Borough has 145 connections within the Borough.
In its petition, the Borough alleges that all of the customers in question are located in Braintrim Township. The nearest alternative water purveyor to the 17 customers, other than the Borough, is the Wyalusing Municipal Authority, which is located approximately eight miles from the extraterritorial customers of Laceyville. To the best of the Borough's knowledge, Wyalusing is not interested in connecting the extraterritorial customers of Laceyville to its system.
In further support of its petition, the Borough states that it has not solicited any potential customers outside of its municipal limits and does not intend to solicit any in the future. In addition, the Borough has passed a resolution that provides that the Borough will apply the same rules, regulations, and rates to the customers outside as those within Borough limits. Attached to the petition is an affidavit of the President of Borough Council stating that the Borough will not repeal or sunset the aforementioned resolution without advising the Commission regarding same. These commitments were made to ensure that the 17 extraterritorial customers will not be subject to potential discrimination without the opportunity for Commission oversight.
The Borough submits that its circumstances are similar to those presented to the Commission in the matters of Lehigh Valley Cooperative Farmers v. City of Allentown, 54 Pa. P.U.C. 495 (1980) and Petition of New Albany Borough, Docket No. P-00991775, 200 Pa. PUC Lexis 34 (2000), wherein the Commission concluded that service to a number of isolated individuals outside of the municipal boundaries under special circumstances did not constitute public utility service subject to the Commission's jurisdiction. We agree.
In Lehigh Valley and New Albany Borough, the Commission reiterated that the test to determine whether a party is rendering service to the public is set forth in Borough of Ambridge v. Pa. Public Service Commission, 165 A. 47 (Pa. Super. 1933). In Ambridge, the Commission noted,We find the distinction between public and private rendition of such service put definitely on the readiness to serve all members of the public to the extent of capacity: The test is, therefore whether or not such person holds himself out, expressly or impliedly, as engaged in the business of supplying his product or service to the public, as a class, or to any limited portion of it, as contradistinguished from holding himself out as serving or ready to serve only particular individuals. The public or private character of the enterprise does not depend, however, upon the number of persons by whom it is used, but upon whether or not it is open to the use and service of all members of the public who may require it, to the extent of its capacity; and the fact that only a limited number of persons may have occasion to use it does not make it a private undertaking if the public generally has a right to such use.
See also, Petition of Chicora Borough, P-00981355 (May 22, 1998).
More recently, the Commission applied the same rationale in Joint Application of Seven Fields Development Corporation, A-220007 and A-210062F2000 (October 1, 1999). In that case, the Commission granted an application filed by a jurisdictional utility seeking to transfer its assets used in the operation of its water system to the Borough of Seven Fields. The Commission noted that the borough would be providing water service to three customers that were located outside of the borough's limits. Moreover, the Commission took note of the fact that the borough committed to continue providing water service solely to these three customers at the same terms of service as are or will be offered to customers within the boundaries of the borough. Also, as in the instant case, the Borough of Seven Fields presented an affidavit to the effect that it did not intend to offer service to the general public outside of its boundaries in the future. In the Seven Fields case, the Commission concluded that the limited nature of water service to such a defined group of customers should not realistically be subject to its jurisdiction. (Order at p.4).
Most recently, in Pilot Travel Center, LLC v. Pa. Public Utility Commission, 933 A.2d 123 (Pa. Cmwlth. 2007), appeal denied, 938 A.2d 1054 (Pa. 2007), the Commonwealth Court, in affirming the Commission's view on this issue, concluded:The test for determining whether utility services are being offered ''for the public'' is whether or not such person holds himself out, expressly or impliedly, as engaged in the business of supplying his product or service to the public, as a class, or to any limited portion of it, as distinguished from holding himself out as serving or ready to serve particular individuals. The private or public character of a business does not depend upon the number of persons who actually use the service; rather, the proper characterization rests upon whether or not the service is available to all members of the public who may require it.
933 A.2d at 128.
In applying the standards enunciated in Ambridge, Lehigh Valley, Seven Fields and Pilot Travel Center to the facts of the case sub judice, we find that the limited extraterritorial service provided by the Borough is not subject to Commission jurisdiction. The extraterritorial service being provided by the Borough is provided to a limited number of customers and is not available to the general public. Moreover, the Borough clearly states that it will continue to provide service solely to the 17 customers that it is presently serving outside of its boundaries and that it is not soliciting additional customers. In our opinion, such service does not constitute the provision of water service to or for the public.
Finally, we note our expectation that an express condition of this exemption is that the Borough apply the same rates outside as well as within Borough limits. We also note that if Laceyville Borough's certificate of public convenience is canceled, the 17 extraterritorial customers will no longer be served by a jurisdictional municipal corporation and, as such, will not have recourse to the Commission's consumer protections. Rather, their recourse will be with the local government and courts of common pleas.
Under these circumstances, no certificate of public convenience is needed by the Borough and, absent any contrary responses from concerned parties, this Commission will cancel the operating authority issued to Laceyville Borough; Therefore,
It Is Ordered:
1. That the Petition for Declaratory Order filed by Laceyville Borough on September 17, 2008, at P-2008-2064117 is hereby granted.
2. That the provision of water service by Laceyville Borough to the 17 customers located outside of the Borough's boundaries is deemed to be non-jurisdictional because it is not service ''to or for the public'' within the intendment of Section 102 of the Public Utility Code, 66 Pa.C.S. § 102.
3. That a copy of this Tentative Order shall be served upon Laceyville Borough and upon each of the 17 customers listed in Laceyville's certificate of service.
4. That the Secretary shall certify this Tentative Order and deposit it with the Legislative Reference Bureau for publication in the Pennsylvania Bulletin.
5. That Laceyville Borough is directed to cause to be published in a newspaper of general circulation in the Laceyville Borough area, notice of this Tentative Order and of the Commission's intent to cancel the Laceyville Borough certificate of public convenience at A-221750 absent adverse public comment within the 20-day time constraint established in the Pennsylvania Bulletin.
6. That if no objection to this Order is filed with the Commission within 20 days of the publication date in the Pennsylvania Bulletin, this Tentative Order shall become final, and the Commission's Secretary's Bureau shall cancel the operating authority of Laceyville Borough and mark this file as closed. The Secretary's Bureau shall also then cause Laceyville Borough to be deleted from the active lists of the Finance and Tariff Section of the Commission's Bureau of Fixed Utility Services and the Assessment Section of Administrative Services.
JAMES J. MCNULTY,
[Pa.B. Doc. No. 09-183. Filed for public inspection January 30, 2009, 9:00 a.m.]
1 At the August 5, 2008 meeting, Borough Council raised the water rate to a quarterly fee of $10.00 plus $4.00 per thousand gallons for those customers within the geographical boundaries of the Borough. Rates for extraterritorial customers remained unchanged, i.e., a flat semiannual fee of $10 plus $2.00 per thousand gallons.
2 Although Commission staff was unable to determine the date of certification, Commission records show that the Borough has been filing annual reports since 1958.
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