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Petition of the Borough of Doylestown

[43 Pa.B. 119]
[Saturday, January 5, 2013]

Public Meeting held
December 20, 2012

Commissioners Present: Robert F. Powelson, Chairperson; John F. Coleman, Jr., Vice Chairperson; Wayne E. Gardner; James H. Cawley; Pamela A. Witmer

Petition of the Borough of Doylestown for a Declaratory Order that the Provision of Water Service to Isolated Customers in Doylestown Township and Buckingham Township Does Not Constitute Provision of Public Utility Service Under 66 Pa.C.S. § 102; Doc. No. P-2012-2327809

Tentative Order

By the Commission:

 On September 28, 2012, the Borough of Doylestown (the Borough or Doylestown), filed the above-captioned petition (Petition) for a 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),¹ and the Office of Small Business Advocate (OSBA). None of the above-mentioned parties filed answers to Doylestown's petition.

 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 Borough seeks a determination that its provision of water service to eighteen extraterritorial customers does not make the water service subject to the Commission's jurisdiction. The Borough asserts that the service it provides to these eighteen 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 the Borough provides public water to all properties within its municipal boundaries. In addition, the Borough directly bills eighteen customers outside its municipal boundaries at the same rates of service as the 3,112 customers that reside inside Borough boundaries. The Borough notes that the eighteen extraterritorial customers consist of three commercial customers in Doylestown Township, eight commercial customers in Buckingham Township, and seven residential customers in Buckingham Township. Petition at 1-2.

 The Borough states that it had been complying with the Commission's reporting and tariff requirements until advised by a prior solicitor that the Borough was not subject to the Commission's jurisdiction due to the extremely limited nature of the extraterritorial service. However, the jurisdictional status of service provided to the eighteen extraterritorial customers remains uncertain. Petition at 2-3. Under these circumstances, we agree that it is appropriate to issue a Declaratory Order in response to this petition.

 The Borough avers that the tariff and reporting requirements are unreasonably burdensome for the Borough to meet and notes that the Borough is a small political subdivision with a limited staff. The Borough seeks to avoid these requirements while retaining the ability to continue providing water service to the existing extraterritorial customers. Petition at 3-4.

 In its petition, the Borough alleges that all of the eighteen extraterritorial customers are directly contiguous to the Borough. The extraterritorial customers, who make up 0.6% of the customer base, have been receiving public water from the Borough since their geographic location makes it impractical for the customers to receive water service from their respective municipalities. The last of the extraterritorial customers was connected to the Borough's public water system in 2000. To date, the Borough has never received any complaint regarding the provision of service or rates charged to any of the extraterritorial customers. Petition at 2.

 The Borough provides further support of its Petition through Resolution 2012-9, attached as Exhibit C to its Petition, whereby the Borough resolved that ''the Borough will apply the same rates, terms and conditions to all customers, both inside and outside the Borough's municipal boundaries.'' Resolution 2012-9 also provides that the Borough ''will not, unless directed by a Pennsylvania regulatory agency, permit any new customer connections beyond its municipal boundaries without prior approval of the Commission.'' Petition, Exhibit C. The August 20, 2012 Borough Resolution also states that the Borough will not repeal or sunset the commitments in the aforementioned resolution without advising the Commission in writing. The Borough made such commitments to ensure that the Borough will not provide water service to the general public, but only to Borough residents and the limited customers contiguous to the Borough for whom public water service would otherwise be prohibitively difficult. Id.

 In support of its petition, the Borough cites Lehigh Valley Cooperative Farmers v. City of Allentown, 54 PaPUC 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.

 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, Docket No. P-00981355 (May 22, 1998); and Drexelbrook Assoc. v. PaPUC, 212 A.2d 237, 240 (Pa. 1965) (service to a defined, privileged, and limited group is not public utility service).

 The Commission also applied the same rationale in Joint Application of Seven Fields Development Corporation, Docket No. A-220007 and A-210062F2000 (Oct. 1, 1999). In Seven Fields, the Commission noted that the Borough of Seven Fields committed to continue providing water service solely to three customers at the same terms of service as offered to customers within the boundaries of the borough. As in this instant case, the borough presented an affidavit demonstrating intent not to offer service to the general public outside of its boundaries in the future. Id.

 Similarly, and more recently, in Petition of Laceyville Borough, Docket No. P-2008-2064117 (2008), the Commission determined that service limited to seventeen customers outside the Laceyville Borough limits did not constitute public utility service. In Petition of Cochranton Borough for a Declaratory Order, Docket No. P-2008-2035741 (2009), the Commission determined that service limited to seventy-five customers outside the Cochranton Borough limits did not constitute public utility service. Even more recently, in Petition of the Borough of Sandy Lake, Docket No. P-2011-2224488 (2011), the Commission determined that service limited to twenty-three customers outside Sandy Lake Borough limits did not constitute public utility service. In each of these cases, service to the public was not defined by the number of customers served outside the municipal boundaries. Rather, a determination of public utility service turned on whether the municipality held itself out as ready to serve to the general public, as opposed to a limited and defined group. Doylestown's petition in this proceeding comports with these three recent proceedings, and therefore Doyles- town's petition should be resolved on a similar basis.

 In applying the standards enunciated in Seven Fields, Laceyville, Cochranton, and Sandy Lake to the facts of the present case, we tentatively find that the limited extraterritorial service provided by the Borough of Doylestown is not subject to the Commission's jurisdiction. The Borough provides extraterritorial service to a very limited number of customers who are geographically contiguous to the Borough and who would have difficulty obtaining water service elsewhere. The Borough will provide service to the eighteen extraterritorial customers at the same rates, terms, and conditions as customers within the Borough's geographic boundaries. Moreover, the Borough clearly states that it will not permit any new customer connections beyond its municipal boundaries without the prior approval of the Commission. Such service does not constitute the extraterritorial provision of water service to or for the public. We note our expectation that an express condition of this exemption is that the Borough continue to apply the same rates, terms, and conditions of water service outside and within the Borough's geographic boundaries.

 Still, we will not cancel the operating authority of the Borough of Doylestown without allowing for an additional opportunity for comment. Parties may file adverse comments with the Commission no later than twenty days after publication of this Order in the Pennsylvania Bulletin.

 Under these circumstances, and absent any contrary responses from concerned parties, no certificate of public convenience is needed by the Borough and this Commission will cancel the operating authority issued to the Borough of Doylestown; Therefore,

 It Is Ordered That:

 1. The Petition for Declaratory Order filed by the Borough of Doylestown on September 18, 2012, at Docket No. P-2012-2327809 is hereby granted tentatively, consistent with this Order.

 2. The provision of water service by the Borough of Doylestown to the eighteen customers located outside of the Borough's boundaries tentatively is deemed to be non-jurisdictional because it is not service ''to or for the public'' within the meaning of Section 102 of the Public Utility Code, 66 Pa.C.S. § 102.

 3. A copy of this Order shall be served upon the Office of Consumer Advocate, the Bureau of Investigation and Enforcement, the Office of Small Business Advocate, the Borough of Doylestown, and upon each of the Borough's eighteen extraterritorial customers.

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

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

 6. If no objection to this Order is filed with the Commission within twenty 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 of Doylestown and mark this file as closed. The Secretary's Bureau then shall remove the Borough of Doylestown from the active lists of the Tariff and Annual Report Section of the Commission's Bureau of Technical Utility Services and the Assessment Section of the Bureau of Administrative Services.

ROSEMARY CHIAVETTA, 
Secretary

[Pa.B. Doc. No. 13-35. Filed for public inspection January 4, 2013, 9:00 a.m.]

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¹ Due to recent restructuring at the Commission, OTS is now part of the Commission's Bureau of Investigation and Enforcement (hereinafter ''I&E'').

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