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PA Bulletin, Doc. No. 97-1810

NOTICES

PENNSYLVANIA PUBLIC UTILITY COMMISSION

Investigation of Flexible Ratemaking for the Bus and Limousine Industries; Doc. No. I-00960063

Commissioners Present: John M. Quain, Chairperson; Robert K. Bloom, Vice Chairperson; John Hanger; David W. Rolka, Dissenting--Statement follows; Nora Mead Brownell, Concurring in result--Statement follows.

[27 Pa.B. 5846]

Public Meeting held
October 2, 1997

Order

   By Order entered July 23, 1996, this Commission initiated an investigation into flexible ratemaking for the bus and limousine industries. That investigation revealed that given the current state of competition in these industries, market forces are better suited than this Commission to set appropriate rates for these industries. By Order entered May 16, 1997, we directed, inter alia, that the Bureau of Transportation and Safety, in conjunction with the Law Bureau, prepare procedures allowing for the filing of flexible rates by group and party carriers (charter service, tour and sightseeing service and special excursion service) and limousine carriers. Those Bureaus have developed procedures in accordance with our directive (Appendix A). We hereby approve and adopt those procedures.

   The procedures provide that a group and party or limousine carrier may establish rates with 1 day's notice to the Commission. Changes to rates need not be supported by financial data, but must be physically filed with the Commission 1 day prior to becoming effective. Unless specifically waived by the procedures, all other Commission tariff regulations remain applicable to tariff changes.

   Finally, we emphasize that these procedures are voluntary and may be utilized by a group or party or limousine carrier if it so chooses. A carrier who wishes to utilize these procedures shall provide for the same in its tariff, which shall be deemed a request for waiver of relevant tariff regulations; Therefore, It Is Ordered That:

   1.  The Rate Filing Procedures for group and party and limousine carriers, as set forth in Appendix A, are hereby approved and adopted.

   2.  A copy of this Order shall be served on all commentators.

   3.  The Secretary shall cause a copy of this Order and Appendix A to be published in the Pennsylvania Bulletin.

By the Commission

JAMES J. MCNULTY,   
Acting Secretary

Statement of Commissioner David W. Rolka

   I cannot support Staff's recommendation to allow complete flexible pricing for the bus and limousine industries and offer the following reasons for my dissent.

   This investigation came on the heels of a unanimous vote to reject the Pennsylvania Bus Association's Petition seeking regulatory reform in various areas governing group and party service. In our Order entered June 6, 1996, in In Re: Petition of the Pennsylvania Bus Association, Docket No. P-00950983, we stated at p. 2,

   One of the Commission's primary roles is to ensure that rates charged by public utilities be just and reasonable... Contrary to the Bus Association's argument, the Commission cannot [sic] shift its responsibility to the carrier to ensure that rates are just and reasonable. Group and party carriers operate in an environment where open competition is restricted by barriers to entry. See 52 Pa. Code § 41.14. Under these circumstances, the market place is not a viable option for setting rates. No protections would be afforded the public from unscrupulous operators who have no or limited competition in their service areas. Under these circumstances, the Commission would be remiss in its statutory duty to ensure that rates be just and reasonable if it entrusted that duty to the individual carrier.

(Emphasis added). Although we denied the Bus Associa-tion's Petition outright, I supported the Chairperson's Motion to open a proceeding to explore the possibility of flexible rates in both the limousine and bus industries which would allow both industries a forum through which to produce evidence to support changing their current rate structures. The limousine industry was added to the proceeding since we approved a Final Rulemaking at L-00930090 which essentially rejected a proposed change in the rate structure for that industry as well.

   That investigation attracted the comments of only two parties representing the bus industry one party representing the limousine industry, and two opposing commentators representing the taxicab industry. Despite such sparse evidence, the Commission concluded that, given the current state of competition, market forces will do a better job than we can of determining what bus and limousine service should cost and directed Staff to prepare procedures allowing for the filing of flexible rates. See Investigation of Flexible Ratemaking for the Bus and Limousine Industries, Docket No. I-00960063 (Opinion and Order entered May 16, 1997), at p. 5. I did not support that decision. There was no basis on which we could reasonably conclude that there is sufficient competition in either market. There were 325 certificated limousine operators in Pennsylvania at that time and 225 group and party carriers. I cannot accept one limousine commentor and two group and party commentors as adequate representatives of their respective industries. While there may well be competition in the Philadelphia, Pittsburgh and Harrisburg metropolitan areas, I am not convinced that competition exists on a Statewide basis.

   I am very concerned that we presume the existence of a competitive market when we have no evidence to support the presumption. By relinquishing oversight of pricing for those carriers who ''voluntarily'' choose to adopt flexible rates, our statutory mandate to assure just and reasonable rates cannot be met. I believe this action will not promote competition but will protect incumbents, especially since nothing is being done to ease our entry requirements which, at this point in time, are viewed as barriers. It is my opinion that deregulation must proceed through the proper legislative channels and not by a mere waiver of some of our regulations.

Statement of Commissioner Nora Mead Brownell

   Before us for consideration is an Order which delineates new procedures for the implementation of flexible ratemaking for the bus and limousine industries. Based on the current state of competition in these industries, it appears that rates will be set more appropriately by market forces. Group and party carriers, charter service, tour and sightseeing service, special excursion service and limousine carriers will be allowed to file flexible rates with the Commission, effective on 1 day's notice. The Order as proposed provides that changes to rates need not be supported by financial data.

   I support the concept of competition and ratemaking flexibility; however, I would prefer the provision of some justification to support the new rates when filed. Nonetheless, the Commission has the authority to seek such justification in the event the filed tariff contains rates of questionable validity. Accordingly, I will concur.

   Furthermore, it is important that the new pricing flexibility not result in less attention to vehicular maintenance or other safety concerns. This Commission retains its full authority to address safety concerns up to and including suspension or revocation of a carrier's Certificate of Public Convenience.

Appendix A

Rate Filing Procedures for Group and Party and Limousine Carriers

   Under the Commission's Order adopted at a public meeting on April 24, 1997, the following rate filing procedures may be utilized by group and party carriers (charter service, tour and sightseeing service and special excursion service) and limousine carriers.

   1.  Changes to Existing Rates:

   a.  Any changes to existing and duly established rates for group and party carriers and limousine carriers must be filed with the Commission at least 1 day before the date upon which the change is to become effective. The filing date is the date of receipt by the Commission.

   b.  Group and party carriers and limousine carriers shall not change any existing and duly established rate unless the rate has been in operation and effect for at least 1 day.

   2.  Establishment of Initial Rates:

   a.  On newly constructed lines of road or upon the inauguration of newly certificated service, group and party carriers and limousine carriers shall file a tariff with the Commission at least 1 day before the effective date of the tariff.

   3.  Notice of Tariff Changes:

   a.  Group and party carriers and limousine carriers are not required to publicly post changes in fares, as prescribed by 52 Pa. Code § 23.61.

   4.  Data Required for Tariff Changes or New Tariffs:

   a.  Group and party carriers and limousine carriers are not required to file supporting financial justification for tariff changes or new tariffs as provided at 52 Pa. Code §§ 23.62--23.64.

[Pa.B. Doc. No. 97-1810. Filed for public inspection November 7, 1997, 9:00 a.m.]


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