NOTICES
Tentative Order
[39 Pa.B. 2765]
[Saturday, May 30, 2009]Public Meeting held
May 14, 2009Commissioners Present: James H. Cawley, Chairperson; Tyrone J. Christy, Vice Chairperson; Kim Pizzingrilli; Wayne E. Gardner; Robert F. Powelson
Petition of Cochranton Borough For A Declaratory Order; Doc. No. P-2008-2035741
Tentative Order By the Commission:
On April 11, 2008, Cochranton Borough (the ''Borough'' or ''Cochranton'') 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 each of the 75 affected customers located outside of Cochranton's corporate boundaries. Cochranton also served a copy of the petition on the Boards of Supervisors of the two townships in which the 75 affected customers reside, namely, Fairfield and Wayne Townships. No answers were filed to Cochranton'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 75 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 75 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 states that it has a total of 582 customers. The Borough has 1,148 residents concentrated in a 1.2 square mile area, and 507 customers within the Borough.1 The Borough also states that it is surrounded on two sides by Fairfield and Wayne Townships. The Borough provides water service to 71 customers in Fairfield Township, which is overwhelmingly rural and agricultural, and four customers in Wayne Township, which is also overwhelmingly rural and agricultural. Of the four customers in Wayne Township, two are businesses (a restaurant and a machine shop), one is a permanent residence, and one is a seasonal cottage. Of the 71 customers in Fairfield Township, three are non-residential (two churches and one Laundromat/car wash). The remaining 68 are residences, with 53 being permanent dwellings and the remaining 15 being seasonal cottages.
According to the Borough, the Fairfield Township customers are all in close proximity to the Borough's two water mains that run from its two wells, across French Creek and into the Borough. The Wayne Township customers are similarly close to the Borough's water mains. The two customers on the east of the Borough are close to a water main running from the present water tank; and the two customers on the south of the Borough are at the end of a water main that terminates at the Borough line. As to these 75 customers, Cochranton explains that beginning more than 50 years ago, customers living in close proximity to the water mains were permitted to connect to the Borough's system in lieu of drilling individual private wells. However, within the last 25 years, only two connections have been made, the last connection occurring in 2007.2 Since that time, there have been no additional connections outside of the Borough's corporate limits.
By letters dated September 24, 2008 and April 23, 2009, the Borough indicated that while the 75 customers outside of the Borough's corporate limits generally receive service at the same terms as customers residing inside Borough boundaries, the rates to customers outside of the Borough's corporate limits are slightly lower than the rates charged to Borough residents.3
Finally, the Borough has stated that the Borough does not, and never has held itself out as engaged in the business of supplying water to the public. As stated previously, the customers in Fairfield and Wayne Townships were permitted to connect to the Borough mains because the customers were in close proximity to existing Borough water mains, and expressed a desire to save the cost of drilling their own wells. Moreover, the Borough has never built or extended a water line or water main in order to serve or obtain more customers in Fairfield or Wayne Townships.
The Borough has requested by this petition a declaration that Cochranton is not subject to the Commission's jurisdiction so that it may save the cost and time burdens of tariff and reporting requirements, while simultaneously ensuring that these nonresident customers continue to receive water service under terms that are acceptable to the Commission and the customers.
Based upon our consideration of these facts and circumstances, the Commission finds that it is appropriate to issue a Declaratory Order in response to the subject petition.
Initially, it should be emphasized that the Borough has passed a resolution, dated April 7, 2008, that provides that the Borough will apply the same rules, regulations, and rates to the customers outside as those within Borough limits.4 Additionally, attached to the petition is an affidavit of the President of Borough Council stating that the Borough will not repeal or modify the aforementioned resolution without providing advance notice to the Commission. These commitments were made to ensure that the 75 extraterritorial customers will not be subject to potential discrimination without the opportunity for Commission oversight.
In the Commission's judgment, the circumstances here 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), Petition of New Albany Borough, Docket No. P-00991775, 200 Pa. PUC Lexis 34 (2000) and Petition of Laceyville Borough, Docket No. P-2008-2064117 (2008), 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.
In Lehigh Valley, New Albany Borough and Laceyville 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, Laceyville Borough 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 75 customers that it is presently serving outside of its boundaries and that it is not soliciting additional customers nor will it provide service to any additional extraterritorial customers in the future. Indeed, Cochranton, by way of this petition, has assured the Commission that it has no intention of ever offering water service to any customers that are located outside of the Borough corporate limits.5 Moreover, the Borough is not holding itself out as providing service to the public. See Bethlehem Steel Corp. v. Pa. Public Utility Commission, 713 A.2d 1110 (Pa. 1998). Based upon the facts as stated in the Borough's petition, the service by the Borough to the 75 customers in Fairfield and Wayne Townships that are located in close proximity to the Borough's mains does not constitute the provision of water service to or for the public.
Finally, we note that an express condition of this exemption is that the Borough apply the same rates outside as well as within the Borough corporate limits and that the Borough does not add any additional customers outside of the Borough corporate limits. Absent any contrary responses from concerned parties, the Commission herein concludes that the extraterritorial service provided by the Cochranton Borough is not subject to the jurisdiction of this Commission; Therefore,
It Is Ordered That:
1. The Petition for Declaratory Order filed by Cochranton Borough on April 11, 2008, at P-2008-2035741 is hereby granted.
2. The provision of water service by Cochranton Borough to the 75 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. A copy of this Tentative Order shall be served upon Cochranton Borough and each of the individuals and offices listed in Cochranton's certificate of service.
4. The Secretary shall certify this Tentative Order and deposit it with the Legislative Reference Bureau for publication in the Pennsylvania Bulletin.
5. Cochranton Borough is directed to cause to be published in a newspaper of general circulation in the Cochranton Borough area notice of this Tentative Order.
6. That if no objection to this Tentative Order is filed with the Commission within 20 days of the publication date in the Pennsylvania Bulletin, this Tentative Order shall become final.
JAMES J. MCNULTY,
Secretary
[Pa.B. Doc. No. 09-1007. Filed for public inspection May 29, 2009, 9:00 a.m.] _______
1 Cochranton is a borough in Crawford County, PA. The Borough was founded in 1800 and incorporated in 1855.
2 In its petition, the Borough states that some Fairfield individuals connected without notifying the Borough in advance, and one Fairfield customer actually connected and took water for nearly 2 years without informing the Borough.
3 Borough residents pay $78.70 for the first 7,000 gallons. The 75 customers outside of the Borough pay $64.25 for the first 7,000 gallons. Thereafter, the rates are the same, regardless of where the customer is located.
4 By the letter dated April 23, 2009, Cochranton confirmed that the resolution remains in full force and effect.
5 At various points around the Borough's boundaries, there is a large amount of vacant land that could be developed for housing or commercial use. If that occurs, the Borough has indicated that will not allow any connections to its mains. Similarly, there are occupied structures situated close to, but beyond, the Borough boundaries that are not, but could be connected. They are served by their own well. Again, the Borough has indicated that they will not allow these individuals to connect to the Borough mains. Petition at 4.
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