Allegheny Ludlum Steel Corp. v. Pennsylvania Public Utility Com'n
| Citation | 447 A.2d 675,67 Pa.Cmwlth. 400 |
| Parties | ALLEGHENY LUDLUM STEEL CORPORATION, Petitioner, v. PENNSYLVANIA PUBLIC UTILITY COMMISSION, Respondent, West Penn Power Company, Intervenor. (Two cases) FREEDOM FORGE CORPORATION, t/d/b/a Standard Steel, Petitioner, v. PENNSYLVANIA PUBLIC UTILITY COMMISSION, Respondent, Pennsylvania Electric Company, Intervenor. |
| Decision Date | 13 July 1982 |
| Court | Commonwealth Court of Pennsylvania |
Stephen A. George, Leonard J. Marsico, Buchanan, Ingersoll, Rodewald, Kyle & Buerger, Pittsburgh, for petitioners.
Joseph J. Malatesta, Jr., Chief Counsel, James P. Melia, Daniel P. Delaney, Harrisburg, for Pennsylvania Public Utility Com'n.
Samuel B. Russell, Alan Michael Seltzer, Ryan, Russell & McConaghy, Reading, for Met-Ed. & Penelec, amicus curiae.
Alan M. Seltzer, Ryan, Russell & McConaghy, Reading, for Pennsylvania Elec. Co.
Drew J. Kovalak, Thomas K. Henderson, Greensburg, for West Penn Power Co.
Before CRUMLISH, President Judge, and ROGERS, BLATT, CRAIG and maCPHAIL, JJ.
These three consolidated actions involve the central issue of whether Section 1307 of the Public Utility Code, 1 the energy cost rate (ECR) adjustment provision, is unconstitutional on the ground that it fails to afford procedural due process.
Allegheny Ludlum Steel Corporation (Allegheny Ludlum) initiated these proceedings, addressing our original jurisdiction by filing a petition for review in the nature of a complaint for a declaratory judgment that Section 1307 is unconstitutional. 2 The Public Utility Commission (PUC) is a respondent and West Penn Power Company (West Penn) is an intervening respondent. Metropolitan Edison Company has filed a brief amicus curiae.
Allegheny Ludlum also filed a precautionary appeal in the event that the matter should be regarded as calling for an appeal from an administrative agency order. 3
In addition, we here have a precautionary appeal taken by Freedom Forge Corporation (Freedom Forge) from PUC action, which is identical to that taken by Allegheny Ludlum. 4 In that appeal, the PUC is respondent and Pennsylvania Electric Company (Penn Electric) is an intervening respondent.
The history of these actions began on November 20, 1981, when West Penn and Penn Electric (utility companies) proposed to the PUC that they be allowed to increase the ECR component of their rates 5 under the provisions of Section 1307, for bills rendered between December 29, 1981 and December 31, 1982. Allegheny Ludlum and Freedom Forge, upon learning of the proposed increase, 6 filed complaints and petitions for suspension against the utility companies with the PUC.
On December 18, 1981, the PUC, in accordance with its normal procedures, met to deliberate the proposed ECR increases and adopted a motion allowing the utility companies to increase their ECR. Although the meeting was open to the public, neither the public nor Allegheny Ludlum and Freedom Forge were allowed to address the PUC. Then, on January 4, 1982, the PUC issued a letter informing Allegheny Ludlum and Freedom Forge that initial proceedings approving the 1982 ECR proposals had been terminated and noting that their complaints before the PUC remained outstanding. 7
Earlier, on December 23, 1981, Allegheny Ludlum had filed its original jurisdiction action against the PUC with this court, accompanied by an application for stay of the PUC's action of December 18, 1981, approving West Penn's ECR. In response, the PUC has filed--and West Penn has adopted--preliminary objections which include the contention that declaratory relief was improper because Allegheny Ludlum's action was actually an appeal from a final determination of the PUC "in the guise of a petition for declaratory relief." Thereafter, Allegheny Ludlum and Freedom Forge filed their precautionary appeals, to which the PUC and the respective utility companies have responded by filing their motions to quash.
On January 20, 1982, this court granted Allegheny Ludlum's stay request and on February 18, 1982, our Supreme Court assumed plenary jurisdiction of these proceedings, vacated the stay granted by this court and gave instructions to consider and dispose of the preliminary objections, as well as to conduct an expedited hearing on the merits. 8 With respect thereto, the parties have filed a stipulation of the facts, which we hereby adopt as our findings of fact herein.
We will first consider the precautionary appeals filed by Allegheny Ludlum and Freedom Forge, which assert that the letter of January 4, 1982, informing them that the temporary rates had been approved, was a final order.
Our Supreme Court has said:
It is fundamental law in the Commonwealth that an appeal will lie only from final orders, unless otherwise expressly permitted by statute .... In ascertaining what is a 'final order,' we have looked beyond the technical effect of the adjudication to its practical ramifications .... We have variously defined a final order as one which ends the litigation, or alternatively disposes of the entire case .... Conversely phrased, an order is interlocutory and not final unless it effectively puts the litigant 'out of court.'
T.C.R. Realty, Inc. v. Cox, 472 Pa. 331, 337, 372 A.2d 721, 724 (1977) (citations omitted).
Relying on this definition, we held in Duquesne Light Co. v. Pennsylvania Public Utility Commission, 34 Pa. Commonwealth Ct. 50, 382 A.2d 991 (1978), that an order fixing temporary utility rates is interlocutory and unappealable. 9 Because the terms of Section 1307(e) provide for review of the ECR adjustment pursuant to public hearing, with provision for refunds to consumers in the event of downward revisions, the ECR scheme is genuinely analogous to temporary rates. We therefore grant the motions to quash.
Next, in considering the original jurisdiction matter before us, we can summarize the respondents' preliminary objections as follows: (1) jurisdiction for declaratory relief is unavailable because (a) the matter involves a disguised appeal from an order of the PUC; 10 and (b) this matter is within the exclusive jurisdiction of the PUC; (2) Allegheny Ludlum has failed to exhaust those administrative remedies available to it; and (3) Section 1307(e)(2) provides adequate due process safeguards to protect Allegheny Ludlum until final adjudication of the ECR proposal.
Respondents' first preliminary objection category involves Section 7541(c) of the new Declaratory Judgment Act (D.J.A.), 11 which provides that declaratory relief shall not be available with respect to any:
(2) Proceeding within the exclusive jurisdiction of a tribunal other than a court.
(3) Proceeding involving an appeal from an order of a tribunal.
Concerning the claim regarding Section 7541(c)(3), Allegheny Ludlum's petition does not address the merits of the decision reached by the PUC regarding the ECR increase; rather, Allegheny Ludlum challenges the process whereby ECR increases can occur without public participation. Thus, Allegheny Ludlum's petition cannot be classified as an appeal from the order.
Furthermore, we cannot accede to that aspect of the respondents' preliminary objections which urge us to dispose of the petition on the basis that the dispute remains within the exclusive jurisdiction of an administrative tribunal, the PUC. Declaratory judgment is the proper procedure to determine whether a statute violates the constitutional rights of those whom the statute affects. Snider v. Shapp, 45 Pa. Commonwealth Ct. 337, 405 A.2d 602 (1979). "[W]hile statutory remedies are not rendered inappropriate merely because a constitutional issue is raised, an administrative agency cannot determine the constitutionality of its own enabling legislation." Myers v. Department of Revenue, 55 Pa. Commonwealth Ct. 509, 515, 423 A.2d 1101, 1104 (1980). The rationale behind this doctrine was explained by our Supreme Court in Borough of Green Tree v. Board of Property Assessment, 459 Pa. 268, 281, 328 A.2d 819, 825 (1974):
The more clearly it appears that the question raised goes directly to the validity of the statute the less need exists for the agency involved to throw light on the issue through exercise of its specialized fact-finding function or application of its administrative expertise. Further, the less need there is for compliance with an agency's procedures as a prerequisite to informed constitutional decision making, then correspondingly greater is the embarrassment caused to litigants by requiring conformity with the statutorily-prescribed remedy.
Moreover, the D.J.A., which has substantially broadened the availability of declaratory relief, see Myers v. Department of Revenue, 55 Pa. Commonwealth Ct. 509, 423 A.2d 1101 (1980), provides that, although a court continues to have discretion to refuse declaratory relief if the controversy or uncertainty at issue would not thereby be resolved, "the existence of an alternative remedy shall not be a ground for the refusal to proceed under [the D.J.A.]." (Emphasis added.) 12 Thus, the respondents' second set of preliminary objections, regarding the necessity to exhaust administrative remedies, are without merit. 13
The remaining aspect of the preliminary objections are the demurrers, which go to the legal merits of the original jurisdiction action, i.e., the constitutional sufficiency of Section 1307 of the Public Utility Code as a matter of procedural due process. We are able to consider the issues raised in the demurrers and the merits of the action together because the parties have provided us with a stipulation of the facts, in lieu of conducting a hearing.
Our court has recognized the need for utility companies to increase rates subject to future review as long as the consumer is adequately protected:
It is well-settled that the PUC without notice or hearing may permit rates to become effective or suspend them pending decision concerning their...
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