NOTICES

Petition of the Township of Mahoning for a Declaratory Order that the Provision of Water and Wastewater Service to Isolated Customers Adjoining its Boundaries Does Not Constitute the Provision of Public Utility Service Under 66 Pa.C.S. § 102

[47 Pa.B. 4236]
[Saturday, July 29, 2017]

Public Meeting held
July 12, 2017

Commissioners Present: Gladys M. Brown, Chairperson; Andrew G. Place, Vice Chairperson; John F. Coleman, Jr.; Robert F. Powelson; David W. Sweet

Petition of the Township of Mahoning for a Declaratory Order that the Provision of Water and Wastewater Service to Isolated Customers Adjoining its Boundaries Does Not Constitute the Provision of Public Utility Service Under 66 Pa.C.S. § 102; P-2017-2588977

Order

By the Commission:

 On January 31, 2017, the Township of Mahoning (the Township or Mahoning), filed the above-captioned petition (Petition) for a declaratory order. In accordance with 52 Pa. Code § 5.42, the Township served a copy of its Petition on the Office of Consumer Advocate (OCA), the Bureau of Investigation and Enforcement (I&E), the Office of Small Business Advocate (OSBA) and each of the 33 customers located outside of the Township's limits. On March 2, 2017, the OCA filed an Answer to Township's Petition. On April 24, 2017, the Township filed a Supplement to Petition in Response to the Answer of the OCA.

Background

 Section 331(f) of the Public Utility Code provides that the Commission ''may issue a declaratory order to terminate a controversy or remove uncertainty.'' 66 Pa.C.S. § 331(f). In its Petition, the Township seeks a determination that the provision of water and wastewater service by the Township to 33 extraterritorial customers does not make the service subject to the Commission's jurisdiction. The Township asserts that the service to these ''limited'' 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 Township avers that it filed the instant Petition because of Mahoning's desire to provide water distribution services and wastewater collection services (hereinafter collectively referred to as the ''Services'') to certain extraterritorial customers. The services that the Township proposed to provide to the extraterritorial customers historically were provided by the Mahoning Township Authority, a Pennsylvania Municipal Authority existing under the Municipality Authority Act, 53 Pa.C.S. §§ 5601—5623. On September 6, 2016, the Township, which created the Authority, initiated proceedings to dissolve the Authority and to take over the Authority's functions.

 The Township further explained that the Authority opposed the dissolution and initiated litigation in the Court of Common Pleas of Columbia County, at Docket No. 392-2016, in an attempt to block the Township's effort. At the time that the Township filed the Petition, the litigation was ongoing.

 On February 2, 2017, the Authority's special counsel sent a letter to the Court discontinuing its action and informing the Township that the Authority's Board of Directors had performed its last functions and would turn over all of the Authority's assets, including the water distribution system and the wastewater collection system (hereinafter collectively referred to as the ''Systems'') to the Township immediately. As of February 2, 2017, the Township has operated the Systems.

 According to the Petition, the extraterritorial customers in question consist of twenty-six (26) users in Cooper Township and seven (7) users in Valley Township. The Township is not aware of any other public or private water distribution or wastewater collection systems operating in either of those Townships. The closest alternative system that could be utilized by the extraterritorial customers is the Danville Municipal Authority, which already provides water and wastewater treatment services to the Township's extraterritorial customers.¹

 In its Answer, the OCA submits that the Petition should be denied or alternatively, referred to the Office of Administrative Law Judge for hearings to develop additional facts that are not presented in the Petition. In support, the OCA states that the extraterritorial customers are entitled to the protections afforded by the Public Utility Code and Commission regulations. The OCA also states that there is no ''defined, group'' of customers being served outside of Mahoning Township because the Township discusses in its Petition the possibility of adding two additional customers in the future.² Finally, the OCA asserts that the Township does not commit to maintain the same level of customer protections for the extraterritorial customers, or otherwise indicate that it has any formalized procedures for handling termination, billing, payments and complaints.

 In response to the OCA Answer, Mahoning filed a Supplemental Petition providing additional details and protections for extraterritorial customers. As stated previously, Services are currently provided by the Township to 33 extraterritorial customers in Valley and Cooper Townships. The only water or wastewater system in close proximity to these extraterritorial customers in Cooper and Valley Townships is the Danville Municipal Authority; however, it would be necessary either to construct new transmission lines one or more miles in length, or to purchase transmission services from Mahoning Township in order for transmission of the water and wastewater through Mahoning's existing lines.

 Finally, the Township, by virtue of Resolution No. 1 and Resolution No. 4, adopted on January 16, 2017 and April 17, 2017, respectively, specifically prescribed: (1) that the customers in Cooper and Valley Townships shall be subject to the same terms and rates as those customers within the Mahoning Township; (2) that Mahoning Township will restrict extraterritorial service to the 33 customers located in Cooper and Valley Townships; and (3) that any customer residing in Cooper and Valley Townships will be afforded the same due process rights as Mahoning Township customers. Supplemental Petition, Exhibit 6.

 Mahoning has requested by this Petition a declaration that the Township 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 extraterritorial customers continue to receive Services under terms that are acceptable to the Commission and the customers.

Discussion

 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.

 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); Petition of Laceyville Borough, Docket No. P-2008-2064117 (2008); Petition of Cochranton Borough, Docket No. P-2008-2035741 (2009) and Petition of the City of Titusville, Docket No. P-2013-2376600 (2014), wherein the Commission concluded that service to a limited 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, Laceyville Borough, Cochranton Borough, and Titusville, 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).

 Subsequently, 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 committed 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 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, Cochranton, Titusville and Pilot Travel Center to the facts of the case sub judice, we find that the limited extraterritorial service is not subject to Commission jurisdiction. The extraterritorial service provided by Mahoning is provided to a limited number of customers and is not available to the general public. Moreover, by virtue of the aforementioned Resolution No. 1 and Resolution No. 4, the Township has committed that it will continue to provide Services to the 33 extraterritorial customers in Cooper and Valley Townships and that it is not soliciting additional customers outside of the Township. Thus, Mahoning 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 Mahoning's Petition, the Services by Mahoning to the 33 extraterritorial customers who are located in close proximity to the Township's water mains does not constitute the provision of service to or for the public. Mahoning's request to provide potential Services in the future to the two undeveloped lots that are in the same subdivision currently serviced by the Township does not alter our conclusion.

 Finally, while we appreciate the concerns of the OCA that are raised in its Answer, OCA does not identify any contested facts that are material to the resolution of the issue presented. We note that an express condition of this exemption from Commission regulation is that the Township apply the same rates outside as well as within the Township limits and that the Township does not add any additional customers beyond those referenced in this Petition; Therefore,

 It Is Ordered That:

 1. The Petition for Declaratory Order filed by the Township of Mahoning on January 31, 2017, at Docket No. P-2017-2588977 is hereby granted.

 2. The provision of Services by the Township of Mahoning to the 33 customers located outside of the Township 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 Order shall be served upon the Township of Mahoning, Cooper Township and Valley Township, the Danville Municipal Authority and each of the individuals and offices listed in Mahoning'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 Township of Mahoning is directed to cause to be published in a newspaper of general circulation in the Township of Mahoning area notice of this Order.

ROSEMARY CHIAVETTA, 
Secretary

[Pa.B. Doc. No. 17-1286. Filed for public inspection July 28, 2017, 9:00 a.m.]

_______

¹  The Township purchases the water that it distributes through the water distribution system from the Danville Municipal Authority, which is responsible for the treatment of the water before providing it. Similarly, the Township transmits the wastewater that it collects in its wastewater collection system to the Danville Municipal Authority, which is responsible for the treatment of the wastewater that it receives from the Township.

²  There are two unsold lots in the same subdivision as the extraterritorial customers in Valley Township.

---

No part of the information on this site may be reproduced for profit or sold for profit.

This material has been drawn directly from the official Pennsylvania Bulletin full text database. Due to the limitations of HTML or differences in display capabilities of different browsers, this version may differ slightly from the official printed version.

---