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PA Bulletin, Doc. No. 00-507

NOTICES

Petition of New Albany 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-00991775

[30 Pa.B. 1613]

Commissioners Present: John M. Quain, Chairperson; Robert K. Bloom, Vice-Chairperson; Nora Mead Brownell; Aaron Wilson, Jr.; Terrance J. Fitzpatrick

Public Meeting held
March 2, 2000

Tentative Order

By the Commission:

   On November 24, 1999, New Albany Borough (Borough), filed the noted 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 (OCA), the Office of Trial Staff (OTS), the Office of Small Business Advocate (OSBA), and on each of the six customers affected located outside of the Borough's corporate boundaries. None of the mentioned parties filed answers to the Borough's petition.

   Section 331(f) of the Public Utility Code (code), provides that the Pennsylvania Public Utility Commission (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 six 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 six customers is not service ''to or for the public'' within the meaning of section 102 of the code.

   In its petition, the Borough notes that water mains run to a seventh property, but water service to that property was shut off several years ago because the resident there is using a private well. Single-family residences are situated on five of the properties and one is occupied by the New Albany Elementary School. The Borough states that the six customers outside of the Borough's corporate limits take service at the same rates and terms of service as customers that reside inside Borough boundaries.

   Furthermore, the Borough notes that it has been serving the six customers for a number of years; the elementary school has been a customer since its construction in 1963, two of the other customers have been served since 1948, and three since 1944. 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. The Borough states that these requirements are unreasonably burdensome given that the Borough only serves six extraterritorial customers. The Borough seeks to avoid these requirements, but at the same time retain service to the existing extraterritorial customers.

   In its petition, the Borough alleges that all of the customers in question are located in Albany Township. The nearest water purveyor to the six customers, other than the Borough, is the Towanda Municipal Authority, which is located approximately 12 miles north of the Borough. Towanda has a water source located approximately 3 miles south of the Borough. Although there is a main that runs from that water source through the Borough north to Towanda, it is a low-pressure main and customers served between the Borough and Towanda must use booster pumps. Moreover, to the best of the Borough's knowledge, Towanda is not interested in connecting the Albany Township residents 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 within the last 10 years 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 which states 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 six 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 matter of Lehigh Valley Cooperative Farmers v. City of Allentown, 54 Pa. P.U.C. 495 (1980), 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, 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).

   In applying the standards enunciated in Ambridge, Lehigh Valley, and Seven Fields to the facts of the present case, 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 six customers that it is presently serving outside of its boundaries and that it is not soliciting additional customers. 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 continue to apply the same rates outside as well as within Borough limits.

   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 the Borough;

Therefore,

It Is Ordered That:

   1.  The Petition for Declaratory Order filed by the Borough on November 24, 1999, at P-00991775 is hereby granted.

   2.  The provision of water service by the Borough to the six customers located outside of the Borough's boundaries is deemed to be nonjurisdictional because it is not service ''to or for the public'' within the intendment of section 102 of the code.

   3.  A copy of this Order shall be served upon the Borough and upon each of the six customers listed in the Borough's certificate of service.

   4.  The Secretary shall certify this Order and deposit it with the Legislative Reference Bureau for publication in the Pennsylvania Bulletin.

   5.  The Borough is directed to cause to be published in a newspaper of general circulation in the Borough area, notice of this Tentative Order and of the Commission's intent to cancel the Borough certificate of public convenience absent adverse public comment within the 20-day time constraint established in the Pennsylvania Bulletin.

   6.  If no objection to this Order is filed with the Commission within 20 days of the publication date in the Pennsylvania Bulletin, this Order shall become final, and the Commission's Secretary's Bureau shall cancel the operating authority of the Borough and mark this file as closed. The Secretary's Bureau shall also then cause the Borough to be deleted from the active lists of the Tariff and Annual Report Section of the Commission's Bureau of Fixed Utility Services and the Assessment Section of the Bureau of Audits.

JAMES J. MCNULTY,   
Secretary

[Pa.B. Doc. No. 00-507. Filed for public inspection March 17, 2000, 9:00 a.m.]


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