AT & T v. Pennsylvania Public Utility Com'n
| Citation | 709 A.2d 980 |
| Court | Commonwealth Court of Pennsylvania |
| Decision Date | 18 March 1998 |
| Parties | AT&T, Petitioner, v. PENNSYLVANIA PUBLIC UTILITY COMMISSION, Respondent. SPRINT COMMUNICATIONS COMPANY L.P., Petitioner, v. PENNSYLVANIA PUBLIC UTILITY COMMISSION, Respondent. |
Craig A. Doll, Harrisburg, for petitioner, AT&T.
Kevin J. McKeon, Harrisburg, for petitioner, Sprint Communications.
Lawrence F. Barth, Harrisburg, for respondent.
Christopher D. Loizides, Philadelphia, for intervenor, Delaware & Hudson Railway Co., Inc.
Before SMITH and PELLEGRINI, JJ., and NARICK, Senior Judge.
AT&T and Sprint Communications Company L.P. (Sprint) 1 appeal an order of the Pennsylvania Public Utility Commission (Commission) 2 denying them reimbursement of their costs for relocating fiber optic cables at five rail-highway crossings. 3
This case emanates from the need by Delaware and Hudson Railway Company, Inc. (Delaware and Hudson) to lower railroad tracks at a number of rail-highway crossings in northeastern Pennsylvania to accommodate double stack container railroad cars. Because the Pennsylvania General Assembly wanted to promote commerce within the Commonwealth by modernizing its railways, it enacted legislation to subsidize rail freight carriers to undertake a rail clearance project that would allow the railroads to double stack container cars on the rail lines. To subsidize Delaware and Hudson in the rail lowering project at three below-grade rail-highway crossings in the City of Scranton and at two below-grade rail-highway crossings in Nicholson Township, a Rail Clearance Agreement was entered into between the Commonwealth of Pennsylvania, acting through the Department of Transportation (Commonwealth), Consolidated Rail Corporation (Conrail) and Delaware and Hudson. The Commonwealth agreed to fund up to 30% of Delaware and Hudson's and Conrail's costs in completing the project, subject to a spending cap of $1,260,000 for alterations to their portion of the project which involved the track from the New York state line to Control Point Burn in the City of Allentown.
On October 6, 1993, Delaware and Hudson filed an application with the Commission requesting exemptions 4 from the 22-foot minimum overhead clearance above a railroad track as required by 52 Pa.Code § 33.121(a) 5 at three crossings in the City of Scranton 6 and at two below-grade rail-highway crossings in Nicholson Township which cross over the 3,600 foot long Nicholson Tunnel. 7 At the five crossings, fiber optic cables of either AT&T or Sprint or both which were previously installed were required to be relocated as a result of lowering the tracks. The Commission issued an interim order approving the requested exemptions and instructing Delaware and Hudson to advise the Commission when the alterations were completed so that a formal hearing could be held to determine the allocation of costs incurred among the parties as a result of the alterations. 8 However, until that time, the Commission ordered each party to bear its own costs of reconstruction and relocation.
The fiber optic cables were located in the Delaware and Hudson right-of-way as a result of agreements entered into with Guilford Transportation Industries, Inc. (Guilford) or its subsidiary, D&H. 9 Sprint and Guilford entered into a Fiber Optic Easement Agreement (Easement Agreement) 10 in 1986 that allowed Sprint to place its cables in the Delaware and Hudson right-of-way. Under the Easement Agreement, the crossings that affected Sprint's cables were along the right-of-way at the Linden Street rail-highway crossing in Scranton and in the Nicholson Tunnel. If Sprint were required by Guilford to move its cables, Guilford would reimburse its costs. 11 In 1990, AT&T entered into a similar agreement with Guilford's subsidiary, D&H. 12 Unlike Sprint, AT&T agreed to relocate its cables at its own cost and expense if D&H deemed a relocation necessary. 13
As a result of the Commission's order that each party was to bear its own costs, Sprint relocated its cables along Delaware and Hudson's right-of-way and temporarily in the Nicholson Tunnel at a total cost of $232,353.81. AT&T relocated its cables along the right-of-way and temporarily in the Nicholson Tunnel at a total cost of $136,451. AT&T and Sprint intended to share the cost for permanently relocating their cables in a shared common facility in the Nicholson Tunnel 14 at an expected total cost of $1,654,217.25.
After the alterations were completed, a hearing was held before an Administrative Law Judge (ALJ) regarding the allocation of costs incurred by Delaware and Hudson, AT&T and Sprint. AT&T and Sprint argued that the Commission did not have jurisdiction to allocate costs, but if it did, they were entitled to 100% reimbursement of their costs of relocating their cables, including those associated with relocating their cables throughout the entire length of the Nicholson Tunnel. They argued that they were forced to relocate their cables, did not benefit from the relocation, and the Commission had previously reimbursed costs in similar situations. Additionally, they argued that there were state and federal funds available, specifically, those funds given by the Commission to Delaware and Hudson to pay its costs.
The ALJ initially determined that the Commission had subject matter jurisdiction over this matter pursuant to Sections 2702 and 2704 of the Code. She then determined that the jurisdiction extended to all of the rail-highway crossings, but not over the entire 3,600 feet of the Nicholson Tunnel. Rather, it only had jurisdiction over the crossings at the points where the highways physically crossed over the tunnel. The ALJ then found that the Commission had jurisdiction over the allocation of costs, and considered various factors in deciding whether any of the parties were entitled to reimbursement of their costs, including the lack of government funds available for reimbursement. 15 While she acknowledged the Easement Agreements between AT&T and D&H and Sprint and Guilford in allocating costs, she abrogated those Easement Agreements in concluding that none of the factors, including the Easement Agreements, warranted that any of the relocation costs of either AT&T or Sprint be borne by Delaware and Hudson. 16 The ALJ recommended to the Commission that Delaware and Hudson, as well as AT&T and Sprint, were each responsible for their own costs. The Commission adopted the recommended decision of the ALJ and this appeal by AT&T and Sprint followed. 17
AT&T and Sprint contend that the Commission's order contains no rationale for denying their relocation costs and should either be remanded for further explanation or reversed. 18 Specifically, they argue that while the Commission identified five factors that it considered relevant to the issue of cost apportionment, it failed to state how any one of the factors affected its decision to deny reimbursement costs, including the Easement Agreements that were ignored in the process. 19 They also argue that although Section 508 of the Code provides the Commission with the general authority to interpret and modify contracts involving utilities, 20 Section 2704 of the Code specifically deals with contracts involving rail-highway crossings and costs should have been apportioned under that provision because they had not been "paid." However, while the Commission addressed AT&T's Easement Agreement with Delaware and Hudson, Sprint points out that the Commission never made any finding regarding its contract with Delaware and Hudson, which it argues survived bankruptcy, making Delaware and Hudson responsible for its costs. 21
The Commission has exclusive jurisdiction over matters involving rail-highway crossings. 22 Pittsburgh & Lake Erie Railroad Company v. Pennsylvania Public Utility Commission, 66 Pa.Cmwlth. 609, 445 A.2d 851 (1982). Section 2702 of the Code, 66 Pa.C.S. § 2702, governs the Commission's jurisdiction over rail-highway crossings and provides that the Commission has exclusive power to govern the construction, relocation, suspension and abolition of such crossings. 23 The Commission has also been given power under Section 508 of the Code to abrogate agreements entered into between public utilities and municipal corporations to carry out its functions under the Code.
Normally, a government agency does not have the authority to abrogate or reform contracts between private parties because that would be an ex post facto impairment of a contractual obligation that was entered into through arms-length negotiations by the parties. 24 Harristown Development Corporation v. Department of General Services, 135 Pa.Cmwlth. 177, 580 A.2d 1174 (1990). However, an exception is made to this general rule for the Commission because a public utility's location of its facilities within a public right-of-way is merely a privilege that is, by definition, revocable. No matter the terms of an agreement, because the right-of-way is held by the public body for public purposes, a utility does not have a proprietary interest in the permanent location of its facilities in the right-of-way. Bell Atlantic-Pennsylvania, Inc. v. Turnpike Commission, 703 A.2d 589 (Pa.Cmwlth.1997).
The express authority given to the Commission to abrogate agreements is found under Section 508 of the Code which provides the Commission with general power to change the terms of all agreements between public utilities and private parties whether they deal with rail-highway crossings or other issues related to public utilities. That section provides:
The commission shall have power and authority to vary, reform, or revise, upon a fair, reasonable, and equitable basis, any obligations, terms, or conditions of any contract heretofore or hereafter entered into between any public utility and any person, corporation, or municipal corporation, which embrace or concern a public right,...
To continue reading
Request your trial
-
MILLCREEK TP. v. PA. PUBLIC UTILITY COM'N
...753 A.2d 324MILLCREEK TOWNSHIP, Petitioner,. v. PENNSYLVANIA PUBLIC UTILITY COMMISSION, Respondent. Commonwealth Court of Pennsylvania. Argued February 7, 2000. Decided June 5, 2000. 753 A.2d 325 ......
- AT&T v. Pennsylvania Public Utility Com'n